Sydney and Melbourne’s residential property markets may have taken a sharp dive but it’s a different story in the north west Queensland towns of Julia Creek, Richmond and Hughenden.
That’s according to Herron Todd White north Queensland director, Roger Hill, responding to RiskWise research that said outback Queensland property prices were sustaining a long period of weakness that correlated with high unemployment rates and extremely small population growth.
RiskWise Property Research CEO, Doron Peleg, said this was clearly demonstrated in outback Queensland where the unemployment rate was more than double that of the average unemployment rate in Australia for September of 5 per cent, and population growth during a 10-year period was a mere 1.7 per cent compared to 18.3 per cent nationally.
The average dwelling price also dropped -11.1 per cent, compared to the whole of Australia at -3.5 per cent, Mr Peleg said.
In contrast, Mr Hill said that despite ongoing drought, the demand for rentals were far exceeding supply in all three towns, which were at or near full employment.
“Do not be fooled by distance and postcodes,” he said. “With infrastructure projects being constructed, new industries arriving and agricultural industry development, ongoing tenancy demand is positive.”
Rental returns around 10 to 20 per cent gross were being achieved for affordable residential investments, according to Mr Hill, and he said that had been the status quo for the last three to five years.
He put it down to the construction of solar farms, a wind farm and a lake near Hughenden, while in Richmond, although not for the same projects, tenants have similar issues of finding somewhere to live.
Vacancy rates there are near zero and rental rates of $180 to $220 per week are being paid.
In Hughenden, which bore the brunt of rail company Aurizon’s job cuts from 2014 to 2016, median values have maintained a stable range from $80,000 to $100,000.
“Typically, the entry level property is a miner’s cottage at say $40,000 to $50,000 and a good home along the Flinders River sold for $200,000 earlier this year,” Mr Hill said.
Sale volumes have recovered to 2009-13 levels but at this stage, the recovery hasn’t resulted in an increase in values.
Julia Creek, while smaller, has many instances of local renovators buying a house in the $40/$60,000 price range, refurbishing and selling for $150,000 to $315,000.
“The future for all three towns looks good, thanks to numerous infrastructure projects,” Mr Hill said.
- Hann Highway and Torrens-Creek to Aramac Roads linking Melbourne to Cairns;
- Julia Creek – hospital expansions, a new bridge along the Punchbowl Road. Private reconstruction of Gannon’s Hotel, a new café is being built, and a tyre business commenced trading last year;
- Airports upgraded in each town;
- Richmond – nurses quarters, roads and a bridge over the Flinders River at Maxwelton;
- Hughenden – two solar farms, a wind farm and a lake under construction.
- Recent construction of a polythene pipe factory in Hughenden.
- Flinders River agriculture evolving to include irrigated crops, horticulture and perhaps an abattoir;
- Resources sector subdued for some years, exploration activity picking up and projects are in the pipeline.
“While the southern Australian city property markets are softening, northern Queensland residential property markets are far from being done and dusted,” Mr Hill concluded.