August 10, 2021

Winter 2021 Toowoomba Property Market Update

There’s a perception that the winter months are a quiet time in real estate.

Not this year. In fact, Australian house prices have risen more quickly over the last twelve months than they have in the past 17 years. We take a look at the state of the national sales and rental markets, as well as what’s happening here in Toowoomba.

National sales market update

House prices in Australia rose another 1.6% in July, according to data from CoreLogic. From January to July this year, housing values have increased by 14.1%, and they’ve risen by 16.1% over the last twelve months. That’s the fastest pace of annual growth since 2004.

However, the monthly growth rate is slowing. In March this year, national house prices increased by 2.8%, but the rate of growth has been trending lower since then.

What’s driving the sales trends?

This slowdown can be traced back to worsening housing affordability, as well as the end of COVID fiscal support, particularly that related to housing. Of course, we’re now seeing some of that support return in many parts of the country due to the current COVID outbreaks and lockdowns.

Demand for housing remains high thanks to record low-interest rates, and the fact that they’re tipped to remain low for some time. Sales listings are 26% below the five-year average and this mismatch between demand and supply is keeping prices buoyant.

Regional sales market update

The second half of 2020 saw regional property markets recording much stronger growth than that of the capital cities, but the gap between the two has now more or less closed. The first seven months of this year show a similar rate of growth in housing prices across the combined regional markets (14.5%) and the capital markets (14.0%).

What’s happening in the Toowoomba property sales market?

Housing values in the combined regional markets were up 1.7% in July and a whopping 19.6% over the past twelve months to produce a median dwelling price of $486,591. In good news for homeowners, we’ve seen those rises play out locally with the average house price in Toowoomba City in June up a huge 31.7% to $441,250 from December’s $335,000. Houses in Rangeville have recorded a 15.2% increase in average value over the same period, and in Mount Lofty June values are up 9.7% on January’s price. The median house prices in East Toowoomba, North Toowoomba, South Toowoomba, Centenary Heights, Newtown, Middle Ridge and Westbrook have all either recorded gains or held steady.

It’s been more of a mixed bag for local unit values, with June median prices in Toowoomba City, East Toowoomba and Mount Lofty all down on December figures. Unit prices in North Toowoomba, South Toowoomba, Newtown and Middle Ridge, however, have all held steady, while in Centenary Heights prices are up 7.0% on the December average.

Sales listings in Toowoomba this winter are the lowest we’ve seen since September 2014, which continues to fuel demand for properties.

National rental market update

National rental rates are up 6.6% over the last twelve months, representing the highest annual growth since 2009. Having said that, just as with the national sales market, the rate of growth is slowing. There was a 2.1% rise in national rents in the June quarter, but this was down on the 3.2% increase recorded in the three months to March.

As house prices raced ahead of rental growth, national gross rental yields were down slightly. The June quarter recorded yields at 3.41%, down on the March quarter’s 3.55% and the 3.73% recorded twelve months ago.

What’s driving the rental trends?

The growth of the national rental market can be attributed to many of the same factors keeping the sales market buoyant – government COVID-19 stimulus, the economy’s quick recovery after restrictions eased last year and increased household savings. A lack of rental supply has also contributed to rental price increases, especially in regional centres.

Regional rental market update

Regional Australia’s annual rental growth rose to 11.3% in June. This is the highest annual growth result since CoreLogic’s records began in 2005. Regional house rents increased by 2.7% in the June quarter, and units 2.9%, outstripping rises in the capital cities but nevertheless down on last quarter. The median rent in the combined regional markets is $441, with the current gross yield sitting at 4.51% (down on 4.93% twelve months ago).

What’s happening in the Toowoomba rental market?

Here in Toowoomba, the rental market is looking good for property investors. The median rent for houses is $371, down from a high of $391 in May, while units are renting for $321 on average, the highest median rent for units in more than ten years.

Our gross rental yield for houses is above the national regional average at 4.8%, while gross rental yields for units sit at a very healthy 6.0%. Yield for houses is down slightly from the 5.2% recorded in May, which was the highest recorded in a decade. Units’ yield has hit 6.1% a few times over the last year, but 6.0% is right up there with the best-recorded yields in the past decade.

The June vacancy rate in Toowoomba was a very tight 0.5% – the lowest it’s been since May 2010. The number of rental listings started to plunge in May 2020, and they’ve remained low ever since. They’re currently at one of the lowest levels we’ve seen in more than a decade, with only 249 available rentals listed in the week commencing 1 August.

Are you thinking about buying, investing, selling or renting in Toowoomba? Contact our knowledgeable local team today.

Article by Jacqui Walker

“Verified reviews say I perform with integrity … that I have sincere and excellent people skills … and that I’m a genuine negotiator. So I’m certain you too would be glad you appointed me to sell your home or to help with your sensationa… View profile

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