The
real estate sector, housing industry and property investors alike have
anticipated a drop in the cash rate as the economy adjusts to increased prices
in products and services impacting the property industry as a whole and
moderate growth in revenues.
Townsville’s
economy has a broad base of industry and government; defense, mining,
engineering and agriculture which has supported modest growth in rental
accommodation prices driven by increased holding costs and the injection of the
3rd army battalion to the City early in 2012. Vacancy rates that were published by Herron Todd White in October 2012 have shown an increase in vacancy
rates to over 2 percent.
Rapid
Realty’s monitoring of prices and volumes suggests that housing prices have
been steady across North Queensland with volatile fluctuations from street to street. Similar or
slightly lower transaction volumes have occurred in 2012 compared to 2011.
The
combination of higher vacancy rates in the rental market, which may reach 3
percent by 2013, together with very affordable house prices that many
commentators are saying is bottoming, means that we may have arrived at the most
favourable buying conditions for investors in the current property market cycle.
Positive
economic news out of Asia and the recovery of USA housing prices and volumes
could stimulate more positive news from global markets, and stem the tide of
negativity that has dogged markets in our region since the start of the Global
Financial Crisis (GFC).
State budget corrections and the emerging "policy cliff in Canberra" where the federal government is seemingly persisting with a budget surplus is further risk to the confidence factor in property markets.
North Queensland is not insulated from these macro-economic factors by all means, but the local economy has demonstrated positive resilience in the past.
The
RBA decision today to reduce the cash rate is further incentive for buyers and
investors to enter or expand their exposure to the property market in North
Queensland.
Trusting the banks to pass on the full .25 percentage point reduction is an uncertain instrument in the current global financial economy for which the RBA or government policy must acknowledge and treat to assist in the recovery of the property markets in the North Queensland.
For
more research or to share your own comments about the RBA decision and property
in North Queensland, visit one of our discussion forums at:
Rapid
Realty Townsville
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