A new report suggests the Townsville property market has begun its recovery after several negative years, noting the city’s “resilience” during the COVID-19 crisis.
The Herron Todd White Month in Review Report for August has both the Townsville house and unit markets at the “start of recovery”.
“The resilience of the Townsville residential market post COVID-19 continues to astound us with increasing sentiment and a noticeable increase in vacant land sales and new home construction following the $25,000 Homebuilder grant,” the report said.
“The investor market for house flippers continues to see good activity, particularly in established suburbs such as Railway Estate, Currajong and Gulliver.
“The entry level price for this type of investment is in the low $200,000s range.”
The report also pointed to reports from local agents of an increase in inquiries from traditional investors from interstate, and of buyers’ agents representing buyers from out of town becoming more active in the market.
Further, the report said the number of properties advertised for rent on realestate.com.au within the greater Townsville region had reduced considerably, from about 850 in mid-April to about 450 in mid-July.
The Real Estate Institute of Queensland this week revealed the Townsville rental vacancy rate had shrunk to its lowest on record, tightening to just 1.7 per cent. That’s down from 2.9 per cent in March, and the record high of 7.1 per cent in September 2016.
“Overall there are many suburbs throughout Townsville with solid yield investing options available, particularly if not seeking short to medium term capital growth,” the report said.
“As yields vary based on demand and supply in the rental market, it is important when buying an investment property to consider property that will appeal to a wide range of potential renters.”
The latest REA Market Trends report for August shows Charters Towers has the highest indicative rental yield in the region, with a whopping 13.2 per cent return.
Its rental vacancy rate has shrunk from 5 per cent in the March quarter to just 1.5 per cent in the June quarter.
In Townsville, Garbutt units are reaping the highest rental yields, with 11.31 per cent, while for houses, the top suburb is Rasmussen, with 7.92 per cent.
Michele Hyde of RE/MAX Excellence is marketing a three-bedroom unit in Belgian Gardens, one of the top performing suburbs for rental yields, for $399,950.
Ms Hyde said the local unit market, and Townsville as a whole, was showing some positive signs of recovery.
“Land sales have taken off,” she said. “We had a few blocks that were sitting for a while and now people are really taking advantage of the government funding (to build a new home),” she said.
“A lot of people are now finding it is cheaper to buy than rent.”
TOP 10 SUBURBS FOR RENTAL YIELDS (units)
Hermit Park 10.4%
Belgian Gardens 7.98%
West End 6.44%
South Townsville 6.12%
TOP 10 SUBURBS FOR RENTAL YIELDS (houses)
(Source: REA Market Trends report, August)