- The average established home is approximately $420K compared to a new build and land at $620K.
- Rental growth remains robust, with the market seeing high demand and low vacancies.
- Median prices remain reasonable, given price rises are from a low base.
Established homes in Townsville’s property market are set for stellar growth this year, according to the latest from Knight Frank.
Senior Partner for Townsville and Mackay, Craig Stack, believes the relative affordability of existing homes is key to rising demand and therefore likely to push prices up.
“The cost of building a new house has grown more quickly over the past two years than the growth in the value of established houses, so due to affordability, more people prefer buying existing homes rather than building new homes,” said Stack.
“The increase in the cost of building a new home has exceeded 25% over two years which is far higher than the growth in median prices for existing homes, which was 15%.”
Craig Stack, Knight Frank
The company’s data puts the average cost of an existing home ($420,000) at around $200,000 less than a new build and land ($620,000).
Average cost of a new build compared to established homes
Stack said this level of demand for the few existing homes on the Townsville real estate market could see median sale prices strongly rise over the next two years.
“In fact, the growth in Townsville’s median house price may become one of the strongest in Australia due to the demand-supply imbalance, with demand to grow exponentially as people move to the region to work on major projects commencing in 2024,” said Stack.
These projects include CopperString 2.0 and the new Townsville Private Hospital, noted Stack.
“Median prices have grown by five to seven per cent in each of the past three years, but growth rates may be up around 10% next year, especially if interest rates retreat.”
Prices could begin to moderate in a few years should existing home prices rise to become in line with the cost of building a new home and land.
Townsville is expected to have 23,000 extra residents by 2031, with around 9,200 extra properties needed – or 1,150 per annum – to cater for demand.
Rental sector also looking positive
Stack noted rental growth across Townsville and the North Queensland region has been strong, and expects that to continue.
Median weekly rental growth for houses and units has been consistently strong, increasing by 10% in each of the past 2 years.
“We believe rental growth will be very high in Townsville throughout 2024 because of the strong demand for employees, with many companies likely to lease housing on behalf of employees so they can fill positions.”
“Vacancy is also very low, currently sitting at 1%, according to the Real Estate Institute of Queensland (REIQ) Vacancy Report for December 2023,” added Stack.
Townsville still affordable despite the price hikes
Stack noted the market is coming from a low base, making the price growth in the Townsville property market more bearable.
The median price in Townsville is currently $430,000, while the median rent for a three-bedroom house is currently $450, according to Residential Tenancies Authority data for December 2023.
