#townsville real estate
Townsville property market on downward trend
Townsville house prices fell 4.7 per cent last year, according to Domain Group figures. Photo: Glenn Hunt
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The property market in Townsville, the biggest town in north Queensland and a large military centre, is struggling to cope with an increase in subsidised housing and rising unemployment, which are driving up mortgage arrears and vacancies.
Townsville’s home vacancy rate is at the highest level in the history of the Real Estate Institute of Queensland’s rental survey. The vacancy rate increased 0.7 percentage points to 5.4 per cent in June 2014, significantly higher than other Queensland towns such as Cairns, the tourist hub, where the number of vacancies was 2 per cent.
Price growth has also moderated over the past 18 months in Townsville, said Andrew Wilson, Domain Group senior economist.
“It’s traditionally a strong economic market. It has a mix of economic drivers like tourism and the army services, mining and agriculture which has kept it ticking over. But unemployment has risen sharply and there are issues with the mining industry and falling government spend,” he said.
“There’s also been strong population growth, which has come at the wrong time as there are declining job opportunities.”
Dr Wilson said the National Rental Affordability Scheme, a partnership between the federal government and the states to provide affordable rental housing, had “unbalanced” the Townsville market.
Tenants hard to find
“Rents are now falling and investors are unable to find tenants due to the oversupply,” he said. “Most of the NRAS properties are also located in less popular suburban areas and are attracting a lower socio-economic demographic, which is causing general demand for properties in this area to fall.”