It has been a minute since writing the first blog on the economy of Townsville. I think it is only apt to revisit how my favourite regional city is performing a year down the track. We will look at how current pricing compares to last year. Check-in on Townsville’s project pipeline looking at existing projects and getting an update on any new and up-and-coming.
I'm not going to lie, being consistent with blogs is a full-time job in itself, especially if you want to deliver good content to readers. I refuse to cheat and use our new best friend Chat GPT to create the blogs, no matter how tempting it may be. I want to ensure anyone who reads my blogs is getting original content that has a bit of my personality wrapped in it, including my poor grammar and spelling errors. Sorry in Advance.
Before we dive into the new stuff let's quickly summarise the last blog for those who are too busy (lazy) to read the previous one:
We discussed Townsville overall as a city and its economy coming into 2022.
I gave a bit of a background on The city had been in a state of decline and rebuilding itself over the last 14 years. The city had looked to have taken a turn post-COVID with an uptick in housing prices and rental yields, all-cause and effects of the interstate migration and the mobile workforce trends. Not to mention Townsville's relaxed non-overpopulated lifestyle and affordable living really showed its value at that time. The small city also showed a lot of promise with a solid pipeline of projects (articles on the projects are linked in the original blog).
So what has happened since March 2022? How do the numbers compare from then to now? Let's then look at, why the numbers.
Doing some research on the weekend, it was proving quite difficult to find Townsville's median house price for the month of March 2022. However, I finally managed to work out and use the Pricefinder reporting tool (this is not an advert for Pricefinder) which gave me a figure of $380,000 the median sale price for houses in Townsville for the month of March 2022. It also gave me the figure of $405,000 as the average house price in March 2023.
Finding information for this year was much easier. I cross-referenced the Pricfinder March 2023 figure with Domains Market Wrap for March which has $405,000 for the average sale price too. This means Townsville house prices would see a 6.57% increase for that yearly period.
It was a lot easier to find rental figures. Finding an article that references the REA Market Trends report, outlined that in Townsville in March 2022 the average rent was $400 per week which had increased to $450 per week come March 2023. I did cross reference these figures again with the Domain Market wrap which also reported the same numbers for March 2023, confirming a 12.5% increase in rent for that yearly period. So overall if my research is correct, the numbers have been tracking nicely for Townsville and moving in the right direction, fantastic news for the Growing City.
What we have learned since my last blog was that the rise in costs for building materials and shortage in labour has had a significant impact on new-build home pricing. The increased interest rates have also really lowered buyers' sentiment toward new-build homes too. The post-Covid- Migration has also had an impact on the housing market driving demand and increasing costs. Currently, home buyers including investors are finding more value in purchasing a pre-existing home over building brand new. Even with higher interest rates with an average housing price of $405,000, repayments are still lower and more affordable in comparison to capital cities.
The increased Townsville housing prices have got to a point where long-term landlords are taking advantage of the market and are choosing to sell. One thing to remember too, as each old rental property is purchased by an owner-occupier instead of an investor is one less rental property that exists in the overall rental supply for the city. There is still a strong investor presence on the market however the increases in rental pricing would suggest that there is a lower rental supply currently and owner-occupiers buying outnumber investors. This would not be a surprise because in some cases it is more affordable to buy a pre-existing home than rent.
The 2023 Domain market report from February to March showed no change in housing pricing remaining at $405,000 for the average housing price and $450 per week for the average house rental. Surprisingly the average days on the Market from the homes dropped from 55.9 days to 55.2 days, although it's not too significant, it does show for that time period buyers still show a high sentiment in Homes.
One change that was notable, was the drop in enquiry numbers coming from outside of Townsville had dropped from 49% to 46%. It will be interesting to see where this figure sits in their next report whether it drops or increases. It would already suggest that out-of-town sentiment has fallen off somewhat but if it is due to the increased interest rates, with banks putting strong criteria on borrowing, slowing the market which would most likely be the case; however it may be lower migration sentiment, or a combination of both. I am not sure yet, time will tell.
There has been a lot of discussion about when Interest rates will stabilise or decrease. To cut a lot long story short the most recent online articles have optimistic commentators saying interest rate cuts to happen as early as the end of 2023, whereas on the flip side, conservative commentators saying no earlier than 2024. This is obviously all determined by the Reserve Bank of Australia (RBA) at the end of the day and how soon inflation falls in the country. So even then the current commentators could and will change their minds within a month's time.
How Townsville’s housing market fairs over the next six to twelve months given the current financial climate, will provide a good idea of how resilient the city's economy has become. I mean if had a crystal ball I probably wouldn't be writing this blog right now, instead living on some foreign beach somewhere carefree sipping a cold one (dreams, you can have them). I wouldn't be surprised if we saw some slowing in the current market to some degree, what that exactly looks like is unknown. However, if the market remains steady with no dramatic downward trends before the RBA and banks start decreasing interest rates. As soon as buyers get their confidence back with stabilised or decreasing interest rates, I feel we would see a lot more confidence back in the market again which could effectively push prices up.
We could look back at this time in the market as a great time to buy property and those who had the confidence to do so could reap the benefits. It can also go the opposite way too, that is just a fact of life, or it is until I learn to time travel and give accurate predictions.
Considering the projects the city has in its pipeline and the growth I have seen in Townsville over the last two years. With a lot of these projects come jobs too as well as expansion in infrastructure is usually followed by livability appeal and population growth. This leaves me optimistic that the growing city is taking steps in the right direction.
With Winter upon us, we are coming into peak Townsville weather, where locals dust off their winter woollies and southerners make their seasonal migration to make the most of our sensational winter weather. This is a perfect time for the city to advertise its natural beauty as well as our economic prosperity and growth so far. Let's now take a deep dive into what's been happening on current projects and any new developments:
UPDATES ON PREVIOUS PROJECTS
Townsville Port Expansion - On Track
This project is expected to be completed by Early 2024, welcoming larger commercial, cruise, and defence vessels to Townsville.
Landsdown Eco-Industrial Precinct - On Track
Construction of the raw water pipeline to the Lansdown Eco-Industrial Precinct will allow early proponents access to raw water by December 2024.
“These works complement the Albanese Government’s recent commitment to a hydrogen hub for North Queensland and support Council’s vision to position Townsville as a leader in advanced manufacturing and as a hydrogen and renewable energy hub, creating significant jobs for the region,” Cr Rehbein said.
Vanadium Power Plant Development - OnTrack
The new production facility is part of the Queensland Energy and Jobs Plan – which includes the goal of creating a North Queensland battery industry supply chain – and is being backed through the Queensland government’s Industry Partnership Program.
The Hive Development - No Key Dates
One of Townsville’s most exciting and transformative development sites is changing hands. Parties to the deal say an agreement has been reached for the sale of The Hive project to Gold Coast developer Centurion Global Developments.
The Ville Casino Hotel Development - On Track
The 132-room hotel includes rooftop and ground-floor restaurants and bars and is scheduled to open in late 2023.
The West State Hospital Development - On Track
Development partners Centuria Healthcare and Geon Property have confirmed that the project had nearly reached its “topped-out” stage – a significant construction milestone – and was due for practical completion by Christmas 2023.
Reef HQ Refurbishment - On Track
REEF HQ’s multimillion-dollar makeover has taken another huge leap forward following a crucial announcement. Paynters Pty Ltd has been unveiled as the principal contractor of the $80.1m refurbishment at Reef HQ Aquarium, with the contract covering all renewal works to the 34-year-old facility. The new aquarium will be built on the existing site and is expected to open in 2026
Magnetic Island Infrastructure Upgrades - On Track
Multiple parts of different projects are all on track or close to completion.
Chris Morris & Errol Stewart Future Tourism & Hospitality Project - No Key Dates
Cr Hill also called for clarification in the plan around the ideal development for the South Townsville railway yards. She said the city plan, before the amendment, was last adjusted in 2016, and the rail yards had since been sold. Cr Hill said suggestions could be brought back to the council, but she added that housing would probably be ideal for the location.“Housing in the city is going to be really important, and accommodation,” she said.
Townsville Military Projects - On Track
The Australian government approved the North Queensland Mid-Term Refresh Program contract to deliver new and upgraded engineering services, building refurbishment work and additional transit living-in accommodation. Construction is expected to commence in early 2023 and be complete by mid-2025.
Riverway Boardwalk Renewal- Completed
More than five linear kilometres of walkway decking, one linear kilometre of joists and 80 linear meters of bearers have been removed and replaced as part of the works completed on the Riverway boardwalk renewal project.
NEW AND UP AND COMING PROJECTS
CopperString 2032 Queensland's renewable future
CopperString 2032 is the largest-ever economic development project in North Queensland and the largest expansion to the power grid in Australia.
Queensland Pay Incentive for Jobs in the Medical Field
Interstate doctors and health workers will be lured with up to $70,000 in cash to work in Queensland in a bid to boost the state’s crippling staff shortages.
Sunland Plaza set for revival as food and entertainment venue
We will open it in three stages but once they are all open there will be four different food options. Some of those are being finalised at the moment. We will have five bars
and large food spaces which can be used for special events and entertainment — tribute shows and things like that,” Mr Shoobridge said.
The pipes for stage two recently arrived by ship in Townsville. The project is expected to be completed by mid-2025. The state government gave a $195m grant for stage two in 2019. The whole project is estimated to cost $474m.
Toowoomba developer buys historic Metropole Hotel
Toowoomba’s KPAT Hotels & Pubs has bought the Metropole Hotel in Palmer St, South Townsville, one of city’s first two-storey brick pubs, as well as the 12-level 104-room Oaks hotel behind the pub and adjoining land in Archer St.
Townsville City Council is currently undertaking works to construct the new East End Boardwalk, located along the Ross Creek at Flinders Street East. It is the latest section of the larger Waterfront Promenade network project with the boardwalk connecting the NQ Stadium Precinct, Central Park, Reid Park and Central Development site already delivered.
Food and accommodation plan for heritage-listed bank building
Brisbane-based property players, led by Andrew Hooper-Nguyen, have acquired the former Bank of NSW and Westpac building in Flinders St for about $1.5m.
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