Property prices have hit rock bottom in Gladstone, creating some extraordinary opportunities for investors looking for bargains.
PROPERTY prices have hit rock bottom in Gladstone, creating some extraordinary opportunities for investors looking for bargains and an easy income stream.
Real estate agents in the central Queensland city say it is possible to buy an investment unit for $75,000 and rent it out straight away for $140 a week, with the chance to increase the rent at the end of the lease by 20 per cent.
Ray White Gladstone director Andrew Allen said rental space in the area was at a premium, resulting in a vacancy rate of just 0.6 per cent, which was putting pressure on a very tight market.
“A property that you would rent in Gladstone for, say, $200 a week, could cost you double that in nearby Bundaberg,” Mr Allen said.
He believes it is just a matter of time before those rates are realised in Gladstone.
The latest figures from the Real Estate Institute of Queensland show the median house price in Gladstone fell 3.2 per cent in the June quarter to $270,000.
In the three months to June, Gladstone’s unit median fell 17.4 per cent to $162,000 — the most affordable of any major region in Queensland.
“That low buy-in price, coupled with healthy rental yields, makes it an attractive prospect for investors,” according to the REIQ.
This time three years ago, the residential vacancy rate was 10.2 per cent, but now sits at just 3.1 per cent.
“It has been several years since local property managers have seen conditions as
competitive as these,” the REIQ said.
Over the June quarter, the median weekly rent for a three-bedroom house increased from
$223 to $230.
Likewise, the median weekly rent for two-bedroom units increased from $170 to
$180.
Rental yields have also spiked.
The gross yield for houses is currently 4.6 per cent and the gross yield for units is now 5.8 per cent.
REIQ CEO Antonia Mercorella said Queensland’s rental population was on the rise, with 35 per cent of the state now renting — and that was only set to increase.
She said it was good news for investors, because not only were price points more affordable, but rental yields were also strong.
Current investment opportunities in Gladstone include a small apartment at 5/32 Elizabeth Street in South Gladstone, which is on the market for just $75,000.
A single level duplex at 27 Mylne St, West Gladstone, is for sale for $290,000, with an expected rental return of $320 a week, and a four-bedroom home on a big block in the suburb of Kirkwood is on the market for $349,000, with an expected rental return of $370 a week.
“The building alone would cost $300,000 to build — so you’re only paying $49,000 for the land,” Mr Allen said.
One of the state’s other tightest rental markets is Cairns, with a vacancy rate of 2.3 per cent, according to the REIQ.
Local property managers say the new development stock that’s coming onto the market is being snapped up by buyers, with fierce demand from tenants to lease them.
The consistent high demand has resulted in rent rises of $10 to $15 a week over the past year.
The median weekly rent for a three-bedroom house is now $390, while the median rent for a two-bedroom unit is $310.
Cairns investors continue to enjoy some of the best gross rental yields in the state.
The gross rental yields for houses is 5.1 per cent, while the yields for investors is an impressive 7.3 per cent.
It’s a different story in Townsville, where the property market has softened following the impact of Cyclone Oma.
The median house price in Townsville fell 4.7 per cent over the June quarter to $305,000, while the median unit price dropped eight per cent to $230,000.
But there is a silver lining, with rents and yields in the region both increasing.
The gross rental yield for houses in March was 5.3 per cent, but increased to 5.5 per cent in the June quarter, while unit yields have risen from 5.8 per cent to 5.9 per cent.
Queensland Premier Annastacia Palaszczuk said more than $245 million in disaster funding had so far been rolled out across 39 communities impacted by the cyclone.
“This includes more than $91 million paid to primary producers, small businesses and not-for-profits, $33 million paid in personal hardship assistance and more than $116 million paid to local governments and agencies to support the reconstruction of essential public infrastructure and other recovery programs,” Ms Palaszczuk said.
On the Gold Coast, house prices softened slightly in the June quarter as the median house price fell 1.6 per cent to $615,000.
Unit and townhouse prices rose over the quarter by 1.2 per cent to record a quarterly median of $430,000.
Four suburbs saw double-digit gains during the year to June: Paradise Point (20.6 per cent), Surfers Paradise (14.2 per cent), Tallebudgera Valley (12.4 Per cent) and Jacobs Well (10.9 per cent).
And the Sunshine Coast market also recorded softer conditions in the three months to the end of June, but solid price growth over the past year means that annual price growth remained some of the best in the state.
In the 12 months to June, Noosa was Queensland’s top performer with median house price growth of 2.6 per cent to $733,750.
Noosa’s unit market was the clear winner over the past five years as well — recording price growth of more than 50 per cent.
The Sunshine Coast’s rental market is also recording more demand than supply with its residential rental vacancy rate down to 2.3 per cent over the June quarter.
Median rents for three-bedroom houses, two-bedroom units and three-bedroom townhouses have also increased over the year.