Property Point 18 july

It’s official: Mackay property prices have grown faster than any other capital or regional city in Australia in the past 12 months.

Median house prices in Mackay have gone up by $100,000 in the past 12 months, according to a report by realestate.com.au using statistics provided by property market researcher PropTrack.

And the median house price in Mackay is now $635,000.

The data, which came out this month, confirms what Mackay people have been feeling in what has been a very hot market.

Mackay prices have gone up by 18.7 per cent over the past 12 months, more than anywhere else in the nation. It is worth noting that the increase in the past 12 months follows significant increases in the years leading up to the last 12 months.

It wasn’t that long ago that the median house price in Mackay was $340,000.

The big price increases in the past 12 months have mainly been in Queensland, reflecting a trend noted in this column last week that people from southern capitals are looking to Queensland as a more affordable place to live.

Other regional centres in Queensland to have significant house price increases over the past 12 months include Townsville (up 17.4 per cent), Rockhampton (13.2 per cent), Gladstone (16.5 per cent), Toowoomba (11.6 per cent) and Cairns (10 per cent).

The results mean that Mackay’s median house price of $635,000 puts it above Townsville ($625,000), Rockhampton ($543,000), Gladstone ($597,000) and Bundaberg ($609,000).

We are behind Cairns, which sits at $716,000 and Toowoomba ($699,000), although we are now ahead of other significant regional centres around the country, including Albury ($627,000), Wagga ($613,000), Bendigo ($584,000), Ballarat ($552,000), Launceston ($541,000) and Tamworth ($537,000).

The thing about statistics such as these house-price figures is that they do one thing very well: tell you what happened. Unfortunately, there is one thing they don’t do: tell you what is going to happen.

Those of us in the industry, and plenty of buyers trying to get into the market, knew that prices had gone up in the past 12 months and a 15–20 per cent increase would have been my guess. But it is interesting and worthwhile to get a statistical confirmation of an anecdotal experience.

The question now is: What happens next? That’s where it gets difficult.

There are plenty of things to consider: have Mackay prices reached a point where investors and owner-occupiers no longer see value and start looking elsewhere or is there more price growth coming up?

This is where I tell you that I don’t have all the answers. Lots of theories. Plenty of talk. If you want crystal ball certainty you are in the wrong place. If you’re in the mood for conjecture, read on.

The performance of our coal sector will always play a role in our housing market and international demand for steel is the main driver in that.

Rental yield is also a key driver in real estate prices and that is what southern investors are most interested in. Mackay has had an under-supply of houses for some time now.

Supply and demand, both in rentals and sales markets, is the key determinant.

There is a movement from southern states to the southeast corner of Queensland, including from retirees. But with the latest figures showing a median house price of $1m for Brisbane, $1.3m for the Gold Coast and $1.16m for the Sunshine Coast, I feel a fair portion of southerners heading north will see the southeast corner as unaffordable and will look further north to places like Mackay for properties that are hundreds of thousands of dollars cheaper.

There are lots of factors in play and any one of them could change market sentiment, but it is fair to say there is still strong activity among buyers at this new price point and that’s from locals and southern investors.

Stay tuned.

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