Real estate in Queensland, February 2005

An overview of the Queensland market, originally published in the Sun Herald in February 2005

Queensland’s property market seems to be holding on, despite bumpy market conditions in the southern states.
While some South East Queensland prices took a small dive during the tumultuous Spring selling season of 2004, property analysts like Michael Matusik are predicting more growth in the property market for 2005.
“Assuming there is only one interest rate rise around Easter, then we expect prices to continue to increase for established houses in Queensland, probably by around 10 to 12 per cent,” the managing director of Matusik Property Insights says.
Real Estate Institute of Queensland chairman Peter McGrath says the lifestyle appeal of sunny Queensland means there is more steam in the market, simply because southerners and overseas migrants will continue to move there.
While migration to Queensland fell back during 2004, it is still extremely healthy with Mr Matusik saying 72,000 people a year will move to South East Queensland this year.
“I think it’s an absolute understatement for people to say Queensland’s population will increase by a million people in the next 20 years – it’s going to be bigger a lot sooner than that,” he says.
“That creates enormous demand for property, with something like a need for 25,000 new dwellings every year.”

THE BRIGHT SPOTS

Matusik says established houses, especially those in the inner suburbs of Brisbane, are the best bet for 2004.
“We have incredible problems with infrastructure that are going to take 10 years to fix and that will force people to choose an older house that is closer to the city rather than a new house further out,” he says.
“All of the suburbs within a three to six kilometre radius of the CBD that have railway stations and shopping centres will be the ones to watch – your Paddingtons, your Bardons, your Windsors and your Coorparoos.”
CPM Research managing director John Wakefield says the general Queensland property market varies from region to region, but it has better opportunities than the NSW residential market.
“Queensland always has opportunities and compared to Sydney – where the entire market is soft and things are only good if they aren’t completely bad – there are some genuine bright spots,” he says.
He suggests the area between the Gold Coast and Brisbane will benefit from long term improvements to rail and road infrastructure.
“I think that area has major long term potential and while prices are probably high at the moment, I don’t think anyone investing in Queensland is really expecting to make a fast buck,” he says.

THE WARNINGS

Some analysts are not expecting 2005 to be so bright for Queensland, with Home Price Guide’s research director Louis Christopher saying there could be more price falls in South East Queensland this year.
“I think the area has a track record of lagging Sydney and Melbourne prices by about a year, and I think given that what’s happened in the southern states there will be across the board price falls,” he says.
Macquarie Bank’s head of property research Rod Cornish agrees that Queensland’s market is not as rosy as it was during 2003 and 2004, but concedes there could be more growth in 2005 because the underlying employment and population figures are good.
Despite the dimmer view, both analysts say there are some sections of the property market that potential investors and sea-changers should pay attention to.
Mr Christopher suggests buying as close to the beach as you can afford, and looking to the fringe areas of the Gold Coast.
“I would say the areas south of Coolangatta which are a bit more affordable are your best bets,” he says.
Christopher also thinks the coastal towns in Far North Queensland are most immune to any market downturn.
“Barring the big places like Cairns and Townsville, a number of those smaller towns have house prices that did not get out of hand and in any downturn, they will probably hold up OK,” he says.
Matusik agrees, saying Far North Queensland is “at 11 0’clock on the cycle” and has more room for growth.

THE STATISTICS

Area     median house price 1999          median house price 2004          5-year change   projection for 2005
Brisbane           $147,000         $310,000         111%   -2% to 0%
Gold Coast       $186,000         $400,000         115%   -1% to 2%
Sunshine Coast $160,000         $385,000         141%               -1% to 2%
Cairns $147,500         $310,000         111%   -2% to 0%
Townsville        $130,000         $213,000         64%     2% to 5%

* Statistics compiled by Home Price Guide


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An overview of the Queensland market, originally published in the Sun Herald in February 2005 Queensland’s property market seems to be holding on, despite bumpy market conditions in the southern states. While some South East Queensland prices took a small dive during the tumultuous Spring selling season of 2004, property analysts like Michael Matusik are predicting more growth in the property market for 2005. “Assuming there is only one interest rate rise around Easter, then we expect prices to continue to increase for established houses in Queensland, probably by around 10 to 12 per cent,” the managing director of Matusik Property Insights says. Real Estate Institute of Queensland chairman Peter McGrath says the lifestyle appeal of sunny Queensland means there is more steam in the market, simply because southerners and overseas migrants will continue to move there. While migration to Queensland fell back during 2004, it is still extremely healthy with Mr Matusik saying 72,000 people a year will move to South East Queensland this year. “I think it’s an absolute understatement for people to say Queensland’s population will increase by a million people in the next 20 years – it’s going to be bigger a lot sooner than that,” he says. “That creates enormous demand for property, with something like a need for 25,000 new dwellings every year.” THE BRIGHT SPOTS Matusik says established houses, especially those in the inner suburbs of Brisbane, are the best bet for 2004. “We have incredible problems with infrastructure that are going to take 10 years to fix and that will force people to choose an older house that is closer to the city rather than a new house further out,” he says. “All of the suburbs within a three to six kilometre radius of the CBD that have railway stations and shopping centres will be the ones to watch – your Paddingtons, your Bardons, your Windsors and your Coorparoos.” CPM Research managing director John Wakefield says the general Queensland property market varies from region to region, but it has better opportunities than the NSW residential market. “Queensland always has opportunities and compared to Sydney – where the entire market is soft and things are only good if they aren’t completely bad – there are some genuine bright spots,” he says. He suggests the area between the Gold Coast and Brisbane will benefit from long term improvements to rail and road infrastructure. “I think that area has major long term potential and while prices are probably high at the moment, I don’t think anyone investing in Queensland is really expecting to make a fast buck,” he says. THE WARNINGS Some analysts are not expecting 2005 to be so bright for Queensland, with Home Price Guide’s research director Louis Christopher saying there could be more price falls in South East Queensland this year. “I think the area has a track record of lagging Sydney and Melbourne prices by about a year, and I think given that what’s happened in the southern states there will be across the board price falls,” he says. Macquarie Bank’s head of property research Rod Cornish agrees that Queensland’s market is not as rosy as it was during 2003 and 2004, but concedes there could be more growth in 2005 because the underlying employment and population figures are good. Despite the dimmer view, both analysts say there are some sections of the property market that potential investors and sea-changers should pay attention to. Mr Christopher suggests buying as close to the beach as you can afford, and looking to the fringe areas of the Gold Coast. “I would say the areas south of Coolangatta which are a bit more affordable are your best bets,” he says. Christopher also thinks the coastal towns in Far North Queensland are most immune to any market downturn. “Barring the big places like Cairns and Townsville, a number of those smaller towns have house prices that did not get out of hand and in any downturn, they will probably hold up OK,” he says. Matusik agrees, saying Far North Queensland is “at 11 0’clock on the cycle” and has more room for growth. THE STATISTICS Area median house price 1999 median house price 2004 5-year change projection for 2005 Brisbane $147,000 $310,000 111% -2% to 0% Gold Coast $186,000 $400,000 115% -1% to 2% Sunshine Coast $160,000 $385,000 141% -1% to 2% Cairns $147,500 $310,000 111% -2% to 0% Townsville $130,000 $213,000 64% 2% to 5% * Statistics compiled by Home Price Guide