Mackay Area Property Watch Q3 2013
In the six month period ending May 2013, the Mackay Area saw its median price remain steady, while there was a pronounced drop off in the number of settled transactions. The median price for the Mackay Area closed the May 2013 period at $435,000 which represents a very minor reduction of 0.25 per cent when compared to the previous six month period, and a 0.64 per cent improvement on the corresponding period 12 months earlier. While the median price has remained buoyant, sales activity has seen a dramatic drop off of 36 per cent in the six months to May 2013. This drop off in activity can be attributed to the waning interest in the resource sector. While still a key economic driver in the Area, the industry has been seeing cut backs in recent times as resource sector companies aim to boost profit margins after the rise of the Australian dollar earlier in the year affected demand. With the median price seeing steady growth, it would indicate that price may not be a driving factor in the lack of sales activity, although we may be seeing it begin to drop.
Observing the House Price Points chart, unsurprisingly there has been no dramatic shifts in buyer activity with the median price remaining stable. Since 2011, the upward shift in the pricing is seen clearly, with the higher price point of $500,000 and above seeing a six per cent increase over the period to May 2013, while during the same time the $300,000 to $400,000 price range saw a reduction of eight per cent. While this has been on the back of increasing demand and sales activity during the same period, it could be expected that activity in the lower price points will again start to gain a larger market share, as demand in the area falls and affordability becomes a key purchasing decision.
The highly impulsive unit market in the Mackay Area has seen the median price during the May 2013 period skyrocket, while sales have suffered as a result. In the six month period to May 2013, the median unit price in the Mackay Area shot up 19 per cent to close the period at $387,086. Somewhat interestingly however, is that the median price for this most recent period is only a two per cent improvement on the corresponding period 12 months earlier. This volatility in median price can likely be attributed to fluctuating stock levels coming onto the market. With a 43 per cent drop off in sales witnessed, again it is evident that with the decline in the resource sector, it is having a flow on effect for the residential property industry, with investors less active as well as less people moving into the area. The most prominent price point for the unit market in the Mackay Area is $400,000 to $449,999 which accounted for 21 per cent of transactions during the May 2013 half year period, an improvement of eight per cent compared to the previous six months. At the same time, the once dominant $250,000 to $299,999 price point saw a seven per cent decline in the number of transactions into the May 2013 period, accounting for the rise in median price.
After experiencing a small dip in both sales activity and median price over the 6 months from November 2010 into May 2011, the Mackay Area new house and land sales experienced unprecedented growth in both the number of settled transactions, as well as median price. During the peak times in the resource boom during the back half of 2011 into the beginning of 2012, the Mackay Area saw consecutive periods of record number of sales while also seeing the median price grow with it. More recently however, the number of sales has come back radically, with the most recent six month period ending May 2013 experiencing only 313 settled transactions, which represents a 44 per cent drop in activity from the previous six month period, and a 69 per cent drop when compared to the corresponding period 12 months earlier. The median price in the Mackay Area however has not been affected in the same vain, seeing a three per cent improvement in the 6 months to May 2013, finishing the period at $212,000 which is also a record high. With the median price likely beginning to plateau, the drop of sales is likely due to a lack of supply in the area on the back of record sales 12 months earlier. The most popular suburbs for these new house and land sales are located in Andergrove (17 per cent), Rural View (13 per cent) ,Blacks Beach (11 per cent) and Mount Pleasant (9 per cent).
Despite the resource sector slowing down, rental demand is still strong, however rental price has come back or stayed the same amongst most dwelling types. With rent being slightly more affordable, and job security unknown, it may explain why sales figure have diminished across all markets.