Townsville’s real estate is on the brink of a significant upturn, driven by a combination of rising demand and a shortage in supply, signalling a bullish future for the region’s property values.
The property landscape in Townsville is expected to undergo a significant transformation, with experts predicting a sharp increase in prices due to a growing population and a lack of new housing developments.
Craig Stack (pictured above), Knight Frank senior partner Townsville and Mackay, highlighted the pressure on the existing housing market as demand continues to outstrip supply, setting the stage for notable price increases, News Corp Australia Network reported.
“We think the median sale price for existing homes will grow very strongly over the next two years,” Stack said.
“In fact, the growth in Townsville’s median house price may become one of the strongest in Australia due to the demand-supply imbalance, with demand to grow exponentially as people move to the region to work on major projects commencing in 2024.”
With an anticipated influx of 23,000 residents by 2031, Townsville faces the challenge of accommodating this growth with an estimated requirement of 9,200 additional properties. This demand, coupled with a slowdown in new constructions, exacerbates the housing shortage, contributing to the bullish outlook for property prices.
The disparity between the cost of new constructions and the value of established homes is widening. The significant rise in construction costs, which have surged by more than 25% over two years, contrasts with a more modest 15% increase in the value of existing homes, making the latter a more attractive option for buyers.
“Median prices have grown by 5% to 7% in each of the past three years, but growth rates may be up around 10% next year, especially if interest rates retreat,” Stack said.
“Price rises for existing homes may bring prices more closely in line with the cost of building a new home, which in turn would lead to more new homes being built in the future – and this could see price growth moderate in several years’ time.”
The rental sector in Townsville is also feeling the squeeze, with both unit and house rents climbing by 10% annually over the past two years. This trend is set to continue into 2024, fuelled by the demand for employee accommodation against a backdrop of extremely low vacancy rates, currently reported at just 1%, News Corp Australia Network reported.
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