New data shows property values fell slightly in some parts of regional Queensland in April but rose in others amid a sharp drop in sales due to the COVID-19 pandemic.
Figures compiled by property analytics firm CoreLogic show falls of 0.4 per cent in Cairns and Toowoomba, 0.7 per cent in the Darling Downs-Maranoa, and 0.1 per cent in Wide Bay.
But on average, property values rose 0.2 per cent across regional Queensland and 0.3 per cent in Brisbane and nationally for the month.
Real Estate Institute of Queensland’s Far North Queensland representative Tom Quaid said he did not expect to see any significant reduction in Cairns property prices in the short term, but the number of sales had halved over the past six weeks.
“Ordinarily we would have expected to see April and May as being some of our busiest months in the Cairns property market,” he said.
“Then we had COVID-19 come in, we had our restrictions start to come through including the banning of open homes. We just had restaurants and bars close, we had mass unemployment starting to come through.
But he said Queensland’s success in reducing COVID-19 cases, the introduction of stimulus measures such as the JobKeeper wage subsidy, and low interest rates had helped consumer sentiment.
“There are still people in the market. For those properties that are on the market we are still seeing transactions occur, just at a lower rate,” he said.
“Now that we’ve got a bit more confidence going on we would expect to see people return to the market.
“Certainly not in the numbers we would see in a normal year, but I think we’ll still see business moving forward over these next few months at least.”
Rents could fall
CoreLogic also warned rents could go down due to a rise in vacancies driven by job losses, a lack of tourists, migrants and international students, and Airbnb properties flooding into the rental market.
It expected inner-city Sydney and Melbourne would be hardest hit with rental listings increasing by more than 30 per cent between March 22 to April 26.
The Gold Coast had the highest increase in listings in Queensland at 12.5 per cent over the period.
It also identified regions in Australia that were more vulnerable to COVID-19-related job losses, namely those with high proportion of workers in accommodation, food, arts and recreation sectors.
The Gold and Sunshine Coasts were among the most at risk with 13-15 per cent of workers in affected industries, compared to 2-5 per cent in Toowoomba and outback Queensland which were among the least vulnerable.
Longreach real estate agent Matthew Strong said he had two properties vacated by tenants who had recently lost jobs, but rent was generally affordable and able to be covered by government subsidies.
“We’re not seeing or haven’t seen as yet [many] tenants needing rents to be reduced under the new COVID-19 situation,” he said.
“We’ve been through drought. Owners and tenants are resilient and we’ve been working through tough times for some time.
Woodgate real estate agent Michelle Cocking said while holiday rentals had taken a hit in the Wide Bay hamlet, many landlords had successfully converted them to longer term accommodation for essential workers.
“Permanent rentals are still going really strong, if not the strongest we’ve seen this year,” she said.
“Holiday rental properties have gone into a semi-permanent situation where we’ve got a four to a 12-week type booking.
“The income for those landlords is still coming in, just in a different way.”
Commercial property market expected to take hit
Uni SA property lecturer Peter Koulizos said residential property prices may experience a “short and sharp” drop but would start recovering even before the end of the year.
“Generally speaking, property values will drop by 5-10 per cent on average. Rents on average will drop a little bit more than that,” he said.
“There is no need to panic. If this thing was going to last much longer than six months then, alright, we might be worried. But for now, stay calm, don’t panic.”
But he expected the commercial property market would be hit harder by the pandemic due to some businesses closing and others deciding to reduce office space.
Mr Koulizos said the continued rise of online shopping could also reduce the need for shopfronts.
Except for groceries from the supermarket — where it looks like Australians have an obsession, where they still want to go out to buy their groceries — they’re happy to buy almost anything else online,” he said.
“So there will be less need for retail bricks-and-mortar but more need for warehousing.”
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