Herron Todd White Valuers – Month In Review
As published by Herron Todd White Valuers
2020 looms as an interesting year for the Toowoomba market. 2019 saw a continuation of the trends seen in 2018 and 2017 with slowing levels of sales activity and some value stabilisation following the boom period from 2014 into mid 2015. Although sales activity has been steady across the board, the market has continued to be multispeed and property specific, with declining values and transactions in the lower and middle markets and strong demand and value levels in the upper end of the market. This is expected to continue throughout 2020.
Reduced investor demand has had a downward effect on values in the western suburbs. The two properties below in the suburb of Glenvale provide an example of this negative trend in the western suburbs.
Year Built: 2013
Sale Date: 13 September 2016 — Sale Price: $430,000
Sale Date: 20 August 2019 — Sale Price: $405,000
Price Change: -$25,000
Year Built: 2015
Sale Date: 29 April 2016 — Sale Price: $372,000
Sale Date: 8 March 2019 — Sale Price: $330,000
Price Change: -$42,000
Kearneys Spring is another Toowoomba suburb suffering from declining investor demand. The two example properties below illustrate the declining trend in unit values from 2012 to 2019 in the suburb of Kearneys Spring.
Year Built: 2013
Sale Date: 30 October 2013 — Sale Price: $299,000
Sale Date: 3 March 2019 — Sale Price: $260,000
Price Change: -$39,000
Year Built: 2012
Sale Date: 4 June 2015 — Sale Price: $280,000
Sale Date: 20 May 2019 — Sale Price: $259,000
Price Change: -$21,000
Toowoomba has been a hub for major infrastructure projects in recent years, including the Toowoomba Second Range Crossing, Wellcamp Airport and the Grand Central Shopping Centre expansion. These infrastructure projects have assisted in holding vacancy rates low while many employees resided in the Toowoomba area throughout the construction processes. Now that many major projects are completed, the vacancy rate is expected to climb throughout 2020.
The key development areas for new housing include 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 of less than 500 square metres. Sales rates for land in many new housing estates are very slow, especially when compared to recent years when projects often sold out off the plan. Some developers are discounting and offering buyer incentives to attract interest in their respective projects, while a number of projects are out performing the market.
The key challenge for community leaders in 2020 and beyond will be the creation of sustainable employment in order to underpin broad demand for the residential property market.
Towns within the Surat Basin west of Toowoomba have experienced significant declines in values and transaction levels following the sudden decline in the construction phase of the major coal seam gas projects in the area. These towns have largely reverted to levels more aligned with their predominantly rural based economies and as such, local employment factors are now contributing to the trends witnessed in each of these towns. These markets are expected to show continued signs of improvement in 2020 with enhanced interest for dwellings from owner-occupiers as affordability has returned and a sustainable level of activity is returning in the gas sector. Many towns are enjoying strong occupancy rates leading to positive movement in rental values.