Property Point 14 November

What have Alice Springs, Launceston, Davenport, Burnie, Melbourne and Port Macquarie got I common?
They’re the only cities in Australia where the property markets are declining, although Port Macquarie is approaching the bottom of the market.

The revelation is featured in the latest “property clock” from property valuers Herron Todd White and gives an interesting insight into the state of play in Australian real estate markets, including Mackay.

The HTW property clock shows whether the country’s property markets are rising or falling depending on where they sit on the clock face.

The top of the clock is 12 o’clock and that’s for cities at the peak of the market,  2 o’clock is for a market starting to decline, 3 o’clock is a declining market, 6 o’clock is bottom of the market, 8 o’clock is a market starting a recovery,  9 o’clock  is a rising market and 10 o’clock is a market approaching its peak.

It’s pretty lonely for those six cities sitting on the right-hand side of the clock in declining markets because pretty much the rest of the country is in a rising market.

There are a handful of cities, such as Bundaberg, Dubbo and Toowoomba, that are at the peak of their markets and  four other places, including Byron Bay and NSW Southern Highlands, that are at the bottom of their markets. But everywhere else is in a rising market.

Interestingly, The Whitsundays are among four places, including Gladstone, that are said to be approaching the peak of their markets.

The rest of the country is squashed in at 9 o’clock on the clock, in a rising market. Sydney, Brisbane, Gold Coast, Perth and Adelaide are there. So are Cairns, Townsville and Rockhampton. And so is Mackay.

The government’s new benefits for first home buyers will put them into a better position to buy a property but you can bet this will create greater demand and help push prices up further, particularly in the typical bracket for that cohort of buyers.

Mackay’s median price is now well and truly above $600,000. That figure will generally get you a very basic three-bedroom, one bathroom house and there is an enormous demand in that price range.

Investors from southern markets are still buying in Mackay, driven by yields of 5 per cent and above thanks to our high rental prices. That $600,000 property would be expected to get at or above $650 a week, so it’s a great return on investment.

But Mackay people, wanting to buy a house to live in rather than an investment, are fighting for their opportunities.

As the latest Herron Todd White monthly report points out, southern investors are not interested in a property that needs some maintenance because they are not here to do it and want something they can set and forget.

This presents a great opportunity for  local people wanting to get into the market. You might have to do some painting and maintenance on that cottage but you won’t be competing with southern investors and you will probably get it for under $600,000.

I wrote a column in March 2023 where I encouraged young people and others wanting to break into the market to buy a unit. I said at that time that I had just sold a unit in East Mackay for $174,000 and that someone with a 10 per cent deposit could buy a property like that and have a mortgage that would be lower than rent.

Those prices have gone now but you can still buy a unit, depending on the suburb and features, in the $300,000s. I believe units in  the low $300,000s still represent an opportunity for young people because it gets them in the market, the mortgage will still be less than rent and you’d expect growing competition for properties in that price range.

Meanwhile that property clock is ticking.

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