Property Point

The latest figures on the Mackay real estate market provide a story about opportunity, a handy snapshot of the local economy and a reminder that the principle of demand and supply tells us a lot about how any given market is going.

The Real Estate Institute of Queensland has released figures showing the median sale price for units in the Mackay area increased by 8 per cent over the past 12 months to $280,000, which tells me that while there is strong growth there are still great opportunities to pick up affordable properties.

There are plenty of units selling in the $200,000-$250,000 price range, which represents an opportunity for young people looking to break into the market as well as singles and couples who don’t need a big property.

What we have is strong price growth for units of 8 per cent for the year but prices that, at this point in time, are ridiculously cheap compared to the current Australian situation.

How much longer will you be able to buy a unit in Mackay for under $250,000? I don’t know but they are usually renting out for $360-$400 a week so, on that basis, they appear cheap to me at the moment.

So buyers can see affordable opportunities and owners and investors are getting solid growth.

The REIQ’s figures, based on CoreLogic data, show house prices have increased by 3.5 per cent in Mackay in the past 12 months, to a median price of $440,000. Again, solid growth but affordable prices in the national context.

There appear to be a few factors in play here; we obviously have plenty of business activity, job availability and a strong economy that is creating confidence and a demand for real estate.

But the old concept of demand and supply is also playing a role.

The total number of unit listings in the past 12 months is down by 6 per cent to 573 and the number of houses listed for sale dropped from 3746 to 3109 compared to the previous 12 months … that’s a 17 per cent reduction in houses listed for sale.

So supply is down while demand remains strong thanks to Mackay’s strong economy, job availability and other factors such as the great lifestyle in our region. The demand and supply dynamic remains the key factor in price movement.

The other factor is investors. I have sold a number of properties to investors in the past few months and there are some key considerations they take into account when deciding to buy here.

Affordability: it is much cheaper here than most southern markets.

Rental yield: they are achieving a net rental yield of 6 per cent and above, which is also much better than down south.

Rental vacancies and job vacancies: Rental vacancies are under 1 per cent so demand is huge among tenants and there are thousands of jobs available.

Strong economy: Well-informed investors understand the power of our economy and have confidence in opportunities for businesses in our region that employ the investors’ tenants.

So, if you are thinking about selling, call me for a chat.

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