Colliers property report highlights Townsville’s challenges and bright future

Townsville’s property market has remained strong over the past year, despite challenging economic headwinds, according to a new report. Read the analysis.

Colliers Townsville Managing Director Peter Wheeler has discussed a new property report highlighting Townsville's bright future.

A new property report has revealed that Townsville’s property market remained strong over the last year, despite the challenging economic headwinds across Australia and internationally.

Released this week by Colliers Townsville, the Townsville Market Snapshot research and forecast report took a deep dive into how the city’s property sectors performed during 2023 and painted a bright future about the city’s “envious outlook” and pipeline of proposed activity.

Like the rest of Australia, North Queensland has grappled with higher interest rates, escalating costs, and global uncertainty.

These impacts were most acutely felt by small businesses, leading to a drop in business confidence and softening ofthe leasing market.

Townsville's business confidence change index between 2019 and 2024. Picture: PVW Partners.

Despite this, prices held firm in some sectors and continued to rise in others, with the city recording over $240m in sales – well above its pre-Covid activity.

Retail property continued its price growth trajectory and the commercial sector achieved its highest recent quarterly median price in the September Quarter ($1.34m).

Combined with low supply and an “absence of significant properties coming onto the market”, Townsville’s commercial property market was subdued last year, with transactions and volumes well down from the post-pandemic peaks, especially in the small tenancy leasing market.

Hampered by limited availability, there was a strong take up of large Townsville CBD office leases from national firms, with the middle of the market performing strongly, recording nine sales above $1m.

Commercial property quarterly total sales value and media price. Picture: Colliers Townsville.

Townsville is grappling with prohibitive costs and capacity in the construction industry, which is likely to continue through 2024, reducing the ability of the market to increase property supply.

Colliers Townsville Managing Director Peter Wheeler was pleased to see the local market still doing “quite well”, albeit a bit patchier than previously.

Colliers Managing Director Peter Wheeler has discussed Townsville’s property market challenges. Picture: Shae Beplate.

“Even though there have been challenges, prices have held up. Some market segments like retail have even seen further growth,” Mr Wheeler said.

“Some businesses are doing it tough at the moment, they’re at the coalface of these economic issues facing an escalating cost and complexity of doing business and lower consumer spending. We’re definitely starting to see that play out in the region.”

Townsville's building approvals in 2022 and 2023. Picture: Colliers Townsville.

He highlighted North Queensland’s enviable position for a regional economy, with its host of major projects in the pipeline, like the under-construction Copperstring transmission line, which will enable substantial regional investment.

“The plans for Townsville are still impressive – a bigger Defence presence, new mining and minerals opportunities, and major investment in energy,” he said.

“This is really keeping us on the map for investors and national companies that see the growth that’s coming and want to be part of it.”

Townsville's 2023 commercial property sales by sector. Picture: Colliers Townsville.

Major Projects Update

• Townsville University Hospital expansion – Queensland Government – $530M – Construction commenced March.

• Somers and Harvey residential estate – Urbex – $136M – Stage 1 released March for 850-lot development, to be completed by 2040.

• Sugarcane-to-jet fuel refinery – Airline consortium – $600M – Site chosen, with final investment decision expected mid-2024.

• Townsville Energy Chemicals Hub – Queensland Pacific Metals – $1B – project postponed due to commodity market conditions.

• Paradise South Phosphate Mine – North West Phosphate – $300M – Mining leases granted.

Industrial property quarterly total sales value and media price. Picture: Colliers Townsville.

Originally published as Colliers property report highlights Townsville’s challenges and bright future