PropTrack: Housing demand in Mackay, Isaac, Whitsundays defies rising interest rates

Housing demand prices in the Mackay, Isaac and Whitsunday regions is fuelling rising prices in defiance of rising interest rates — for now. Read the latest on the market.

Among the gum trees at Greenmount. Housing prices are continuing to grow. Picture: contributed

Cheaper housing in the Mackay, Isaac and the Whitsunday regions is driving strong demand in defiance of rising interest rates, according to a PropTrack market report.

The report found that house prices grew 7.28 per cent over the past year; in the latest quarter alone, prices rose by 1.8 per cent.

The median price for units in the Mackay/Isaac/Whitsunday region rose 4.62 per cent year-on-year while house values rose 7.58 per cent year-on-year.

Since the start of the pandemic, Mackay, Isaac and Whitsunday prices had risen 24.62 per cent, said report author and senior economist Eleanor Creagh.

“Demand for more affordable regions and larger homes has provided support, resulting in regional areas faring better than capital city areas in 2022,” she said.

Mackay housing prices continue to show strong growth. Photo: Melanie Plane

“Affordability is a key driver. As rates have risen, people’s borrowing power reduced and demand for more affordable regions and larger homes provided support, resulting in comparatively affordable regional areas faring better.”

She also pointed out that Queensland was still the most popular destination for interstate migrants.

“In addition, conditions remain tougher for regional buyers with the number of properties listed for sale still well below pre-pandemic levels,” she said.

“This means regional buyers have less choice and less negotiating power, another reason why regional areas are exhibiting a lesser pace of price falls relative to the capital cities.

Mackay’s affordable housing prices is attracting strong demand and driving prices up, says a new report. Picture: contributed

“More expensive regions – particularly those that were in high demand in the pandemic – have seen home prices falling fastest as higher interest rates are affecting higher-priced regions most.”

But she said while affordable regions like Mackay, Isaac and the Whitsundays were benefiting, there were warning signs ahead.

“The combination of interest rates moving sharply higher, rising mortgage rates and expectations of continued price falls, has weighed on buyer demand and is clearly contributing to slowing activity,” Ms Creagh said.

“As mortgage affordability worsens with interest rates continuing to rise, this will weigh on demand and property prices in the period ahead.

“It’s likely that the regions where supply remains limited will still see stronger competition and exhibit a lesser pace of price falls as a result.”