New price growth figures have shown impressive returns for one state, but prompted a prominent buyer’s agent to issue a warning about certain well-performing suburbs.
Short-term data based on median house prices is often dismissed by market commentators due to its susceptibility to being skewed by an out-of-the-ordinary sale in an otherwise stable suburb.
This was the reaction of buyer’s agent Todd Hunter, of wHeregroup, to the news that units in South Townsville had achieved a quarterly growth rate of 32.96 per cent (according to the latest CoreLogic RP Data figures) to place the suburb second in Queensland and seventh in Australia.
Mr Hunter attributed the high-growth figure to the release of an apartment development in South Townsville.
“If it’s units, I would say that for those figures to be the way that they are there must have been a release done of a new high-rise. So it must be a nice, new high-rise that’s pulling some pretty high figures to make that occur,” Mr Hunter said.
“There are two main streets of Townsville and Palmer Street is one of them. It’s sort of the restaurant, bar, nightclub and hotel precinct, so it’s all sort of running through on that and that’s in South Townsville. So it’s all very nice, but housing-wise there’s lots of apartments and units.”
He cautioned investors to avoid these high-rise developments, citing issues of oversupply throughout inner Townsville.
“Yeah, in actual fact there’s a bit too much of it happening – so along the river front, there’s a few here and there and it’s creating a bit of an oversupply to the area. It’s certainly happening,” he said.
However, he said that Townsville as a whole could offer good buying owing to its position as a government employment base and the availability of good housing stock in the outer suburbs.
“I think the housing through the area is actually quite good and will perform well – some of the more outer suburbs rather than close in to town. But I would be very cautious on the unit developments in Townsville – definitely – but if you’re looking for houses and you’re looking for that sub-$400,000 mark it’s probably not a bad place to invest.
“It’s the hub for north Queensland for all government services. For people going out to smaller regional towns they sort of base themselves in Townsville as an area. So it is a hub for that side of things. There’s also a RAAF base that’s there and army and navy recruits that are there as well. The contracts tend to run between late October and early March, so there’s generally a big influx of people who come in through these government jobs,” he said.
The data also revealed a number of South Australian suburbs had an impressive quarter, with four suburbs experiencing median price growth in excess of 30 per cent.
While not necessarily a reflection of the broader state market, the data does indicate that the ‘top ten’ suburbs in South Australia place that state in the upper echelons alongside the fast-growing east coast.
Clayton Bay, a holiday town located near Hindmarsh Island, 87 kilometres from Adelaide, ranked first in the country with a growth rate of 34.52 per cent.
Port Adelaide was the third-fastest growing suburb in Australia, with a growth rate of 33.77 per cent.
South Australia’s tenth-fastest growing suburb, Henley Beach South, recorded a rate of 20.17 per cent.
Peter Koulizos, property mentor and author of The Property Professor, explained to Which Investment Property that the South Australia market was set to benefit from a drop in the Australian dollar.
“The positive is the Australian dollar dropping because South Australia’s very dependent on manufacturing and agriculture and international students, which are generally our three biggest exports. The lower Australian dollar is going to help South Australia and other states like Victoria, which are heavily dependent on manufacturing and international students – it’s going to help us greatly in the short to medium term,” he explained.
By comparison, Larrakeyah in the Northern Territory recorded a growth rate of 34.23 per cent to place it second in the country, but the territory’s number 10 suburb, McMinns Lagoon, only managed a rate of 5.64 per cent.
Buyer’s agent Tod Peterson described Larrakeyah as an ideal investment location due to its close proximity to the Darwin CBD.
“The suburb is right next to the central business district, and there are lots of places of interest there for residents. The area is a great spot for people who like convenience and being close to everything,” Mr Peterson said.
Elsewhere, Ilkley (33.12 per cent), near Queensland’s Sunshine Coast, just pipped Cudmirrah (33.11 per cent) in New South Wales for third spot nationwide.
Ultimo in inner-city Sydney ranked third in New South Wales, with a figure of 30.96 per cent, and Alfredton, in the Victorian city of Ballarat, recorded a growth rate of 27.22 per cent to take that state’s number one position.