A SLOW RETURN
Regional Qld house market update
5th May 2015
Synopsis
$200
15,000
$150
10,000
$100
5,000
$50
2013
2015
2010
2012
2011
2009
2007
2005
2003
2001
$0
1999
0
2. Annual change in house price
Regional Queensland
35%
30%
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
2014
2008
2006
2004
-20%
2002
 Regional property markets usually
fluctuate more frequently than their
capital city counterparts. This is what
we call the ‘saw-tooth’ effect. This
trend can be seen in the bar chart
depicting sales volumes in chart 1 &
the annual change in house prices via
chart 2.
$250
2000
 Yet in recent years & despite
advantageous macro conditions –
such as lower interest rates & increasing
overseas/interstate investor interest –
house values across regional Qld have
been falling. See chart 2.
$300
20,000
1998
 Since 2007, overall, house sales
volumes across regional Qld have
dropped. House prices – by & large –
whilst increasing, have done so at a
very pedestrian rate.
$350
25,000
1997
 Our first chart combines together the
house sales & price results across the
eleven major Qld regions. It shows a
very strong market sales peak during
2003, with a resultant rapid escalation
in house prices between 2003 & 2007.
$400
Dwelling
30,000 sales
(LHS)
1996
Some observations
35,000
1995
Much has been written about buying
property in a Qld regional town. But how
much of it rings true?
Median
dwelling price
($k, RHS)
1. Detached house cycle
Regional Queensland
1994
Qld is Australia’s most decentralised state.
One in three Queenslanders lives in a
regional city or town. These towns,
combined & depending on the stage of
the property cycle, attract between 25%
& 30% of the house sales across the state.
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A SLOW RETURN
Regional Qld house market update
5th May 2015
 Chart 3 outlines sales volumes by each
major Queensland region. It shows the
average number of houses sold each
year over the last decade & our
estimates for house sales during 2015.
 Whist we anticipate that overall house
sales volumes will increase across
regional Qld this year – revisit chart 1 –
very few areas will bat above their long
term weight. Those that should include
Cairns; the Fraser Coast & Toowoomba.
 Looking back, we find that, on
average, house values rose just 4% pa
across regional Qld over the last
decade. Some regions outshone
others, but during 2014 most saw house
values fall. See table 1.
End note
The potential gains in terms of capital
growth & rental returns can be higher in
regional towns than in the more sedate,
major Australian urban centres. But there
is a higher element of risk. Surat & Bowen
Basins are good examples.
History also shows that it is often best to
buy during a regional market downturn;
or better still, in the balanced phase of
the cycle – the bottom of the ‘saw-tooth’
– than during a recovery/upswing.
Several regions are already in or should
be in that balanced position soon. These
include Townsville; Whitsundays; Mackay;
Gladstone; Rockhampton & Bundaberg.
Two Qld regions are in recovery – Cairns &
Toowoomba. But this time around,
regional Qld can expect a much more
sedate upturn than it has had in the past.
Think rolling hills, not a mountain range.
3. Detached house sales
Regional Queensland
Cairns
Townsville
Whistsundays
Decade
average (pa)
Mackay
Bowen Basin
Rockhampton
Calendar
2015
Gladstone
Bundaberg
Fraser Coast
Surat Basin
Toowoomba
0
1,000
2,000
3,000
4,000
1. Annual change in house price
Regional Queensland
Cairns
Townsville
Whitsunday
Mackay
Bowen Basin
Rockhampton
Gladstone
Bundaberg
Fraser Coast
Surat Basin
Toowoomba
Regional Qld
Decade
avg (pa)
Last 12
months
3.6%
3.9%
5.0%
2.9%
2.7%
5.7%
5.6%
2.7%
1.9%
7.2%
4.5%
4.0%
6.3%
-0.6%
-2.7%
-7.9%
-26.1%
-3.1%
-12.1%
-1.7%
0.0%
-10.3%
5.7%
-0.6%
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MATUSIK PROPERTY INSIGHTS
Some bragging first
A 26 year veteran in this business, Michael
Matusik set up Matusik Property Insights in 1998.
Since then, Michael & his team have advised
on close to 600 new residential projects
throughout the country.
We have worked for over 450 property-related
clients over the past 17 years & in essence, we
offer four consultancy services:
Michael is a qualified Town Planner with first
class honours & is considered a thought leader
in the housing industry. He is one of Australia’s
first independent property analysts & is a
member of the Future Housing Taskforce.
Pertinent advice on a new residential
development opportunity. This typically
involves a briefing meeting, site visit & short
report.
Reports, training & Matusik Missive
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MPI also sells market outlook & focus reports,
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To find out more about our Market Outlook &
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Consultancy services
Our aim is to help de-risk a new residential
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We can also provide valuable market
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market wants, & where it wants it. This insight
can significantly increase the sale-ability of
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We welcome enquiries from developers at any
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1. New Project Advice
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IMPORTANT NOTES
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RISKS OF INVESTING IN PROPERTY
Direct investment in residential property, like all investments,
involves a number of risks. If these eventuate, your income
might be lower than expected. There may even be none. In
addition, the capital value of your investment could fall.
The key risks of investing in property are outlined below:

The property purchased may not provide the income or
capital gains the asset was expected to produce.

There is a risk that your property may, for periods of time, lie
vacant & hence not generate income. Maintenance &
repair costs are the investor’s responsibility & can vary, and
at times be significant. Such costs are sometimes
recoverable from rental bonds or under insurance policies.

There are a number of factors that affect the general
property market including increases in supply & falls in
demand; the cyclical nature of property values; increases in
taxes & operating expenses; overall economic conditions;
demographic changes; changes in town planning laws;
casualty & condemnation losses; environmental risks;
regulation on rents; detrimental new developments in the
area; increases in interest rates; similarly, inflation & changes
to bank funding policies.

Gearing increases the volatility in the value of your
investment. In the early stages of residential investment, a
significant fall in the property’s value may see balances fall
to less than the total amount of borrowings.
DISCLAIMER
This missive has been prepared by
Matusik Property Insights Pty Ltd. This
content has been prepared without
taking into account the objectives,
financial situation or needs of any
particular individual. It does not
constitute formal advice. For this reason,
any individual should, before acting,
consider the appropriateness of the
information, having regard to the
individual’s objectives, financial situation
& needs, and if necessary, seek
appropriate professional advice.
Information herein includes material
obtained from third parties considered to
be accurate. Whilst this information has
been carefully compiled, no warranty or
promise as to its correctness is made or
intended. Interested parties should
undertake independent inquiries &
investigations to satisfy themselves that
any details herein are true & correct.
In addition, no forecasts are being made
about potential capital gains or rental
returns. Past information about capital
gains or rental growth does not imply
such gains or growth will be made in the
future. Matusik Property Insights Pty Ltd
disclaims all liability for any loss or
damage suffered by any person of, or in
connection with, the provision of
information herewith, or the purported
reliance thereon by any person.
This missive is valid for six (6) months from
date of issue.
COPYRIGHT & TRADEMARKS

Increases in interest rates often increase the cost of
borrowings.
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
Changes in laws or their interpretations including taxation,
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should seek professional tax advice before investing in
residential property.
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TYPICAL DATA SOURCES
Matusik database; Qld Government; Qld
RTA; REIA; REIQ; SQM Research; BCI
Australia: ABS; realestate.com & RPData.
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