THE latest data from the Australian Bureau of Statistics shows a worrying trend for apartment developers with commencement of new product down almost 13 per cent in the last 12 months.
In the March quarter, the trend estimate also fell 3.1 per cent. The total number of new unit dwellings in Australia was 39,578 for the March quarter, with new private sector houses totalling 22,784 – down almost 20 per cent in the last 12 months.
While the January floods have increased new housing construction in Queensland in the March quarter, demand for unit and townhouse sales decreased 15 per cent.
According to the REIQ’s March quarter Queensland Market Monitor report, median unit and townhouse prices backed off across much of South East Queensland during the first three months of 2011.
Despite the State Government announcing in its Budget yesterday that it would give $10,000 grants for those building new homes after August – apartment oversupply is staving off growth.
“The unit and townhouse market has been impacted by lower numbers of first home buyers and investors, who are the type of buyers usually the most interested in this more affordable segment of the market,” says REIQ chairman Pamela Bennett.
“First home buyers continue to languish at about 15 per cent of the Queensland residential property market, while investors appear to have adopted a wait-and-see approach until a clearer picture emerges on interest rates and the economy.
“The prestige market is also struggling with the number of preliminary sales of units and townhouses for more than $1 million across Queensland dropping about 40 per cent compared to the December quarter.”
The median unit and townhouse price in Brisbane eased 1.4 per cent to $395,000 over the quarter. On the Gold and Sunshine coasts, the median unit price decreased 2.7 per cent to $355,000 and 2.1 per cent to $350,000 respectively.
“REIQ agents continue to report a significant drop in demand compared to the same period last year, but this is creating wonderful opportunities for buyers with many sellers having to be very realistic about what price they can achieve in the current conditions if they want to make a sale,” says Bennett.
On the upside, positive median price growth was recorded for the Toowoomba, the Fraser Coast, Rockhampton and Townsville local government areas.
Rockhampton and Townsville both recorded median price increases of 4.5 per cent over the period. As Rockhampton’s unit market continues to be quite small, this result was due to higher priced unit sales in Yeppoon, while sales in new waterfront developments in North Ward and South Townsville have underpinned the region’s result over the quarter.
The downward trend for apartment starts and sales comes as Queensland makes history by becoming the worst state for mortgage defaults. Two per cent of Queensland mortgage holders are in arrears, according to Fitch Ratings – with Logan city rated the worst district in Australia for ‘mortgage delinquency’.
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