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Better year a head in property game…
Townsville Bulletin 05/01/2011
A TIGHTENING rental market and a wealth of major projects has valuer Ross Turner looking to a better year for the property industry in 2011.
While the managing director of the Townsville office of property consultants Herron Todd White believed property values may not move much either way, he said a tightening rental market could prompt a recovery in sales volumes decimated by the global financial crisis and rising interest rates.
He said rents could rise and more people could be pushed into buying homes either first home buyers, investors or both.
“I don’t think there is a lot of evidence to support suggestions that the market could go backwards,” he said. “While the market is not great now there are some positive fundamentals which could influence volumes. One of them is a tightening rental market. We just say watch this space closely because some opportunities may arise.”
The property industry has had two disastrous years since the 2008 sharemarket crash although in Townsville 2010 was probably worse than the preceding year when at least deals negotiated in the later half of 2008 filtered through in activity finalised in 2009.
In the commercial market, Herron Todd White estimated sales volumes more than halved from around $170 million in 2009 to about $80 million in 2010.
Likewise sales in the residential market were down from a peak of around 300 a month in mid-2009 to around 220 a month in late 2010.
Mr Turner said he could see the commercial market maintaining its level of activity or slowly improving in 2011.
In the residential market, he said values may not necessarily improve but that volumes could recover.
The support for this view was because of Townsville’s tightening residential rental market which, as of November, had been measured with vacancy rates at just 2.6 per cent for houses and 2.7 per cent for units.
A year earlier the rates were 3 per cent for houses and 5 per cent for units.
“At this time of year a lot of people move in and out, so the market does get a bit softer, but generally the rental market has been tightening,” Mr Turner said.
He said rents could increase, pushing first home buyers back and investors back into the market.
Mr Turner said new residential unit developments suitable to the current market would begin to be marketed in 2011 at prices which were more competitive to the premium unit developments of pre-2008.
He said major projects currently under way coupled with the stimulus provided by the relocation of the 3rd Battalion to Townsville in 2011 were occurring at the right time to provide recovery in the economy.
Major projects under way included Stockland’s $180 million expansion of its Aitkenvale shopping centre, the $110 million Townsville Marine Precinct at Townsville port, the $56 million Flinders Mall redevelopment, the $190 million port access corridor, the $110 million Douglas arterial duplication and the $170 million Cleveland youth detention centre expansion.
Other projects to watch included expansion at Lavarack Barracks and Townsville Hospital, the $75 million ocean terminal at Townsville port and the proposed $1.5 billion Copper String transmission line project.