Regional Queensland property prices have slumped 4 per cent since a peak in May, according to property research firm Cotality, the ABC reported. Cotality's October data showed a decline of up to 6 per cent in south-east Queensland, including the Gold Coast, Sunshine Coast and Toowoomba, while more affordable areas, including Darling Downs-Maranoa, decreased by less than 1 per cent.
Property prices have cooled across regional areas after months on the rise, and buyer confidence has taken a hit since the Reserve Bank announced its fifth interest rate hike this year, the ABC reported.
Homes Taking Longer to Sell
The average time homes sat on the market has blown out to 43 days across regional parts of the state, double what it was 12 months ago, according to the ABC's report of Cotality data.
"It's great news for buyers. They have more time, they've got more choice, they can negotiate harder," Cotality research director Tim Lawless said. "But the missing ingredient of this buyers' market is simply buyers."
On the Gold Coast, Brisbane retiree Richard White said, "I think there are deals to be had." In Bundaberg, real estate agent Jessie Fuller said the market had "stabilised" after "massive" growth over the past five years. "We're still seeing a fair bit of buyer inquiry from owner-occupiers, but investors have dropped off," she said. "My advice to sellers would be that price and presentation are extremely important going forward."
The ABC also reported that a Gold Coast penthouse sold this week for $32 million, a record Queensland apartment sale, to a local buyer.
Brisbane and National Downturn
Cotality's national Home Value Index fell 1.2% in October, taking the downturn into a seventh consecutive month, the firm said in its monthly release on Monday (2 November). Brisbane and Perth recorded the fastest pace of decline, with dwelling values down 2.0% and 1.7% respectively in October, taking values 6.1% and 5.7% lower over the rolling quarter.
"Virtually every suburb across Brisbane, Perth and Adelaide has recorded a drop in values over the past three months," Lawless said. Cotality said that, given the magnitude of the upswing prior to the downturn, most homeowners in these cities are likely to be sitting on a significant equity buffer.
Outlook Expected to Weaken
The Reserve Bank's board decided on Tuesday (3 November) to increase the cash rate target by 25 basis points to 4.85 per cent, saying housing prices have fallen significantly and that higher interest rates and falls in housing prices and turnover are expected to weigh on dwelling investment and household consumption.
Lawless said regional Queensland's property market was expected to weaken further in the coming months, particularly in the wake of the latest rate rise. "We're now seeing borrowing capacity has reduced by about 12 per cent, more than offsetting the fall in housing values," he said.
He said investor interest had also dried up after the tax shake-up in this year's federal budget. "Most banks are reporting more than a 30 per cent drop in investment inquiries since May 12 when the budget was handed down," Lawless said.