Consyl Publishing & Publicity Ltd

Consyl Publishing & Publicity Ltd

Home > Our Publications > Australian Outlook> 2007 > November

Affordability is still falling

Alternatives now sought

DECLINING housing affordability is prompting more and more people to consider alternative ways of entering the property market.
With median prices often between 20 to 60 per cent less than houses, it is little wonder that units and townhouses are becoming increasingly popular with buyers.
And as these properties are usually located in prime locations - such as the inner city or on the beach - they also offer a lifestyle attractive to many people.
The latest Real Estate Institute of Queensland (REIQ) median unit and townhouse price data reveals the unit and townhouse section of the market is continuing to appeal to buyers across the State.
And just as many areas of Queensland recorded double digit median house price growth in the 12 months to the end of June this year, over the same period this often more affordable segment of the market also fared very well.
"Declining housing affordability means more and more aspiring first home buyers have to think outside the square of traditional home ownership just to get a foothold in the property market. They are buying a unit or townhouse, buying with a friend or sibling, or taking in housemates to help pay off the mortgage," REIQ chairman Peter McGrath said.
"Queensland is leading the way in the country's population boom. More than 160,000 people migrated here from interstate in the five years to the end of June 2007 and the Sunshine State continues to record the highest population growth rate - net overseas migration and natural increase - of all states and territories.
"This sustained population growth, coupled with a very solid economy, ensures the state's residential unit and townhouse market is likely to continue to perform very well."
Mr McGrath said with median house prices now above $400,000, many first home buyers in Brisbane, and the Gold and Sunshine coasts, are increasingly being priced out of the market. One of their best options is buy a unit or townhouse instead, he said.
In the 12 months to the end of June 2007, the median unit and townhouse price in Brisbane increased by 10.2 per cent to $325,000, the Gold Coast rose by 5.7 per cent to $322,500, Caloundra's increased by 5.2 per cent to $345,000, and Maroochy's was steady, rising 0.8 per cent to $317,500.
Noosa's unit and townhouse median dipped 8.4 per cent over the year, but this can be attributed to varying quality of stock sold in the area.
The more affordable surrounding shires of Brisbane continue to perform well in both the house, and unit and townhouse, market.
Ipswich recorded a 4.6 increase in its median unit and townhouse price in the 12 months to the end of June 2007 to $183,000; Pine Rivers is up 9.6 per cent to $246,500; and Logan rose 12.7 per cent over the same period to $190,000.
"Sub $200,000 properties are becoming increasingly scarce in the Southeast hence the growing appeal of these more affordable areas," he said.
REIQ figures show the unit and townhouse market continues to go from strength to strength across the state.
Bundaberg's median unit and townhouse price is up 4.9 per cent in the 12 months to the end of June 2007 to $215,000; Mackay - due in part to an increase of new stock - recorded a 22.2 per cent increase to $275,000; Hervey Bay is up 6.1 per cent to $258,000; and Townsville performed well with a median unit and townhouse increase of 15.6 per cent to $260,000.
Gladstone recorded an increase of 51.9 per cent over the year to $205,000 but this can be attributed to varying quality of stock, and varying quantities of new properties, sold over the period.
Similarly Rockhampton recorded a 44.5 per cent jump in its median unit and townhouse price over the year, but this can attributed to varying quality of stock sold.
Cairns recorded very healthy price growth over the 12 months to the end of June, with its median unit and townhouse price up 16.1 per cent to $209,000.
"With prices often between 20 to 60 per cent lower than houses, it is little surprise that people across the State are opting to buy a unit or townhouse to get their foot on the first rung of the Queensland property ladder," Mr McGrath said.