The Townsville property market has remained strong through the start of 2023, however the fallout from additional interest rate hikes may yet impact the real estate scene, according to a recent market analysis.
The latest Herron Todd White Month in Review, released before news of the latest interest rate increase, found both the unit and house markets in Townsville were on the rise.
Local Herron Todd White valuer Hayden Lynam said the homebuyer market in the Townsville region was performing well despite the overall state of the greater economy.
“The increase in interest rates, inflation and deteriorating economic conditions are yet to result in a major downturn in property prices for homebuyers locally, however as these conditions continue to play out in the short term, the impact may be felt across the local market in the near future,” he said.
Earlier this month, the RBA delivered a shock blow to borrowers when it lifted rates by 0.25 percentage points to 3.85 per cent – its highest level since April 2012.
That move after the RBA paused rates last month following 10 consecutive increases between May 2022 and March 2023.
The hit to borrowers was widely slammed by finance experts, with new data released by the Finance Brokers Association of Australia (FBAA) revealing Australians were cancelling holidays, selling assets, taking on additional work and cutting back on spending in record numbers so they could stay financially afloat.
Prior to this announcement, Mr Lynam said in Townsville owner occupier activity remained strong as historically low vacancy rates and strong rental market rates still existed within the region.
“There remains a strong mixture of homebuyers throughout the Townsville market with first homebuyers, buyers who have been forced out of the rental pool, existing homeowners seeking upgrades, retirees and interstate movers all remaining active participants in the market,” he said.
Mr Lynam said low stock levels were having an impact on the market, with demand still high even as supply remains limited.
“These conditions have led to shorter selling periods for dwellings on the market than in years past, particularly for properties priced well in the current market,” he said.
“Well-presented properties in good condition continue to see good levels of demand.”
According to REA data the median time on market for a house in the Townsville region is 31 days.
Mr Lynam said construction costs continued to put a dampener on the new house market, which caused increased activity in the established housing market.
“New unit construction also remains limited due to increasing costs while sales volumes of established units remain steady,” he said.
“There appears to be a strong upward trend in pricing for properties in the inner city, fringe city and rural residential markets in particular.”
Article source: www.realestate.com.au