Herron Todd White Valuers – Month In Review
Toowoomba has been fortunate to benefit from major infrastructure projects including the completion of the Toowoomba Second Range Crossing and the imminent Inland Rail project.
As predicted in February, despite these major infrastructure projects, the Toowoomba and surrounding suburbs residential markets have continued to remain relatively stable throughout 2019 following a slowing level of sales activity in 2017 and 2018. This followed the peak experienced throughout 2014 into mid 2015. Although sales activity has been steady across the board, the market has continued to be multi-speed and property specific. There has been little consistency with variations in sale prices and buyer interest making it difficult to establish well performing suburbs and specific property types.
The rental market is in a balanced situation with vacancy rates remaining relatively low.
The infrastructure projects are believed to have assisted in holding vacancy rates low with many employees living in the Toowoomba area throughout the construction processes.
As mentioned in February, the key development areas for new housing included the suburbs of Glenvale, Cotswold Hills, Torrington, Kleinton, Highfields, Cambooya and Westbrook. Demand for vacant land has slowed significantly as a result of reduced investor demand and limited local buyer enquiry for lots less than 500 square metres in size. Sales rates for land in new housing estates are slower compared to recent years when projects often sold out off the plan. Developers are starting to look at buyer incentives to attract interest in their respective projects.
Unit development has also slowed as evidenced by the Building Approvals graph below:
West of Toowoomba, the towns within the coal seam gas hub of the Surat Basin have reverted to levels which are more aligned with their predominantly rural based economies. As such local employment factors are now contributing to the trends witnessed in each of these towns. Enhanced interest for dwellings is being experienced from owner occupiers as affordability has returned. A significant over supply situation remains in the unit market which continues to place downward pressure on this sector. The Roma market is relatively inactive and downward pressure appears to remain while Dalby is showing good signs of stabilisation with a strong occupancy rate currently being enjoyed leading to positive movement in rental values.
In general, there were no surprises in the Toowoomba market and predictions made at the beginning of the year appear to have been relatively accurate. We give our predictions a score of eight out of ten!