Townsville defies COVID-19 odds to record property price rises

Townsville has beat the Sunshine Coast as one of the top property market performers during the September quarter, defying all COVID-19 odds. SEE HOW MUCH YOUR SUBURB IS WORTH >>

Townsville was one of Queensland’s top property market performers during the September quarter, defying all COVID-19 odds to record 3.1 per cent growth in house values.

The latest REIQ Quarterly Market Monitor found that Townsville recorded the second highest growth in the state, coming in just behind Noosa with 3.6 per cent but ahead of the Sunshine Coast with 1.8 per cent.

MORE NEWS: Serial house flippers have reno ‘Midas touch’

Townsville’s top 10 most popular properties of 2020 revealed

Do you have what it takes to turn this hovel into a haven?

Picture: Evan Morgan

“The Townsville median house price for September increased an impressive 3.1 per cent to $338,000 with the volume of sales increasing over the year as well,” the report found.

“While the region’s unit market has yet to experience the same uptick in market conditions, buyers are snapping up vacant land parcels to upgrade to new homes.

“Investors are also taking an interest in the Townsville market more generally as well, no doubt attracted to its diverse economy but also a rental vacancy rate of just 0.7 per cent.”

Rents in Townsville are on the rise as demand outstrips supply, with a recent report by Propertyology predicting that some parts of Australia could see their “biggest increase in rents … in living memory” over coming years.

The REIQ report said the Townsville market, like much of regional Queensland, “hasn’t been one to write home about” over the past decade.

But sellers were seeing prices clawing back.

Townsville suburbs have seen an increase in performance, with plenty of suburbs selling many homes.

“The region’s housing market was the second-best performer over the September quarter … the annual volume of house sales was also up by about 10 per cent compared to the same period last year,” the report said.

REIQ Townsville zone chair Ben Kingsberry said market conditions had continued to be robust over the quarter, and continued to hold strong as the year came to a close.

He said local buyer activity was having the biggest impact on the market, as were new residents moving to the city for defence jobs or university placements next year.

“First homebuyer activity continued to be strong, however, most first-timers remained keen on established properties rather than new homes, even with various government grants available.,” Mr Kingsberry said.

“The region’s strong rental market as well as affordable property prices was also starting to attract investors back into the market.”

REIQ zone chair Ben Kingsberry

North Ward led the charge, recording a median house value increase of 36.5 per cent in the 12 months to September.

Ray White’s Julie Mahoney, who sells in many of Townsville’s sought-after suburbs, said COVID-19 had forced many people to re-evaluate their lives.

“Just after 2009 we lost a lot of people to the big cities, the engineers, tradies, professionals,” she said. “And a lot of our young people.

“Covid has forced a lot of those same people to reflect and get back to their roots, back to basics, and many are coming home.

“And they are looking for lifestyle, proximity to schools, they want views, they want space.

“Equally, a lot of today’s young people have opted not to move to the big cities which is a great thing for Townsville.”

North Ward is within easy reach of The Strand. Picture: Evan Morgan

Other top performers over the year were Hermit Park (+15.3%) and Mount Louisa (+12.1%).

Unit values remained flat over the September quarter but were up 2.2 per cent over the year, according to the report.

But unit values in North Ward also bucked the trend, rising 4.3 per cent over the quarter and 11.5 per cent over the year.

Unit values in Townsville’s CBD also staged a comeback, recording a 15.1 per cent rise over 12 months, while units in Kirwan recorded 22.8 per cent growth over the year on the back of 22 sales.

Ray White sales principal Julie Mahoney said many buyers were just coming home. Picture: Evan Morgan

At Nelly Bay on Magnetic Island, median unit values soared 100.3 per cent over 12 months with 39 sales.

Explore Property agent Giovanni Spinella said there were some interstate buyers relocating to the city but the vast majority were locals upgrading into the more aspirational suburbs.

“We are also seeing the first signs of out-of-town investors which is great,” he said.

“A lot of them are just doing the numbers and often buying without even coming to Townsville.”

In terms of vacant land, there has been significant buyer activity but it has yet to flow through to median price data in the September quarter, according to REIQ.

“However, its clear that land is popular with buyers, no doubt partly due to the HomeBuilder scheme,” the report said, noting land sales were up about 20 per cent over the 12 months to September.

Mr Kingsberry said it was upgraders who were driving the robust land market conditions, with many keen to build a new home.

And the rental market is also beginning to attract new investors, with record low vacancy rates and rising rents an attractive mix.

In Townsville, median weekly rents have increased by 3.1 per cent for houses and 3.7 per cent for units over the 12 months to September.

“Townsville continues to record some of the best gross rental yields of all major regions across the state,” the report said.

“The gross rental yield for houses is 5.1 per cent and for units its an impressive 6.4 per cent.”

Originally published as Townsville defies COVID-19 odds to record property price rises