"While declining housing affordability continues to be a serious issue for first home buyers, many people are now recognising that there is a way to get into the property market – and that is units or townhouses," REIQ chairman Peter McGrath said.
"With the possibility of more interest rate rises this year, and some banks already raising interest rates independently of any moves by the Reserve Bank, first home buyers especially need to be careful not to over-capitalise to get into the market.
"Units and townhouses continue to be affordable options with these housing types still having medians under $250,000 in many parts of the state. Indeed, people can get a foothold in some of the Sunshine State’s more prestigious suburbs by investing in a unit or townhouse."
Mr McGrath said in the 12 months to the end of September 2007, median unit and townhouse prices in nine of the major local government areas across the state are still under $250,000.
"In today’s market, properties under $250,000 represent a very affordable way into the market and ensures that first home buyers can better meet their monthly loan repayments," he said.
Median unit and townhouse prices in Brisbane have increased 10.6 per cent to $335,000 in the 12 months to the end of September 2007.
"With the median house price in Brisbane now $425,000, the unit and townhouse segment of the market remains an affordable option," Mr McGrath said.
Inner ring suburbs within five kilometres of the city continue to perform well with West End, Milton, Annerley, Hamilton and Woolloongabba all recording very impressive increases.
"While the medians in some of these suburbs have been affected by varying quality of stock and properties with water views sold, units and townhouses within close proximity of the city or even within prestigious locations remain a viable alternative for many people," he said.
"One example is Hamilton which is one of the most sought-after suburbs of Queensland. In the 12 months to the end of September 2007, it had a median house price of $1.1 million, while its median unit and townhouse price was $440,000 over the same period. Such a difference in price between these housing types means it is still possible to buy in some of the State’s more exclusive enclaves."
The surrounding shires of Brisbane continue to record very healthy price growth with Ipswich’s median unit and townhouse price up 13.4 per cent to $205,000 in the 12 months to the end of September 2007; Logan’s median is up 15.3 per cent to $200,000; and Pine Rivers is up 9.8 per cent to $258,000.
"All of these areas have recorded strong growth in their unit and townhouse markets over the past year and this trend is likely to continue," Mr McGrath said.
On the Gold Coast, median unit and townhouse figures rose by 8.6 per cent to $334,500 in the 12 months to the end of September 2007.
"Units and townhouses located in the Gold Coast’s prestige suburbs as well as the more affordable suburbs performed particularly well over the year with Eagleby, Hope Island, Mermaid Beach, Beenleigh and Eden’s Landing all featuring in the list of the top 10 performing suburbs," Mr McGrath said.
Units and townhouses on the Sunshine Coast showed steady growth with Caloundra’s median increasing by 4.2 per cent to $346,500, and Maroochy’s rising 0.6 per cent to $320,000.
Noosa’s unit and townhouse median dipped 5.1 per cent over the year, but this can be attributed to varying quality of stock sold in the area.
Bundaberg’s median unit and townhouse price is up 2.9 per cent to $216,000 in the 12 months to the end of September 2007; Mackay – due in part to an increase in new stock – recorded an 18.3 per cent increase to $278,000; and Hervey Bay is up 10.6 per cent to $275,000;
Gladstone recorded an increase of 50.7 per cent over the year to $226,000 but this can be attributed to varying quality of stock, and varying quantities of new properties sold over the period.
Rockhampton has had a stellar year in both the house, and unit and townhouse, residential market with a 33.5 per cent jump in its median unit and townhouse price to $248,250.
Townsville performed very well with a median unit and townhouse increase of 20.1 per cent to $275,000, while its sister city of Thuringowa also recorded very strong growth with a 23.9 per cent increase in its median to $285,000, however this can partly be attributed to varying quantities of new properties sold over the period.
Cairns recorded very healthy price growth over the 12 months to the end of September 2007 with its median unit and townhouse price up 18.9 per cent to $220,000.
"With double digit growth across most of the State over the year, the unit and townhouse market remains in very good shape – a trend that is unlikely to change any time soon," Mr McGrath said.
Nine of the top 10 performing Queensland suburbs over the past year are located in or close to resource-rich areas, according to the Real Estate Institute of Queensland (REIQ).
REIQ figures show that in the 12 months to the end of September, median house price growth has been the strongest in the suburban areas of Mt Isa, Belyando, Bowen and Cloncurry.
"Such results are not surprising when you consider the continuing strength of Queensland’s mining industry," REIQ chairman Peter McGrath said.
The best performing suburb was Pioneer in Mt Isa with a median house price increase of 65.7 per cent to $290,000 in the year to the end of September; second was Clermont in Belyando, which was up 63.7 per cent to $280,000; and third was Collinsville in Bowen which recorded 62.5 per cent median house price growth to $195,000.
"The resources boom means more and more people are working in the mining industry and being paid handsomely for it, so many are investing in property," Mr McGrath said.
"But also when you consider the low median house prices in areas such as Mt Isa and Bowen 12 months ago – they were well under $200,000- it is a lot easier to have that very strong level of growth when it is coming off a lower base."
And Mr McGrath said even with prices increasing more than 50 per cent over the year in the mining towns featured in the top 10 suburb list, prices still remained relatively affordable compared to many other areas of the State.
"Brisbane and the Gold and Sunshine coasts all now have median house prices over $400,000. With medians still under $300,000, investors especially will continue to be attracted to mining areas because they can make a very good return on their outlay," he said.
The odd one out in the top 10 list was Currumbin on the Gold Coast, which came in at number four. Currumbin’s median house price increased by 59.3 per cent to $795,000 in the 12 months to the end of September due to a significant number of waterfront properties sold over the year.
"The market for prestige living in Queensland continues to show very healthy growth and Currumbin has certainly benefited from this. Waterfront properties especially are attracting strong demand and with that multimillion-dollar price tags," Mr McGrath said.
Number five was Parkside in Mt Isa which recorded a 57.3 per cent increase in its median house price in the 12 months to the end of September to $289,500; next was Winston, also in Mt Isa, which was up 56.8 per cent to $294,000; Cloncurry’s median rose 55.9 per cent to $230,000; eighth was Soliders Hill in Mt Isa, with an increase of 53.2 to $295,000; Gladstone City rose 51.6 per cent to $352,000; and 10th was Townview in Mt Isa which recorded a 48.7 per cent increase in its median house price to $290,000.
All medians were affected by varying quality of stock sold.