September 2024 Property Market Update: Regional Queensland and Toowoomba

September 2024 Property Market Update: Regional Queensland and Toowoomba

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The property market in Regional Queensland, including Toowoomba, continues to show signs of resilience despite a slight slowdown in growth. Here’s a comprehensive overview of the current trends and key insights.

Quarterly and Annual Growth Trends

• The pace of quarterly growth in dwelling values across Regional Queensland has eased to 1.3% over the three months to August 2024. This is a decrease from the 2.0% rise recorded in April and the 3.3% increase during the June 2023 quarter.
• Annually, values have grown by 7.1% over the year to August, marking the sixth consecutive month of deceleration. Despite this, the annual rise is substantial, translating to a $53,000 increase in the median value.

Market Segmentation and Property Values

• Growth in property values continues to favor the more affordable segment. The lowest 25% of the market experienced a 2.3% increase over the quarter, while the upper quartile saw a modest 0.5% rise.
• Approximately 29.2% of Australian suburbs experienced a quarterly decline in dwelling values in August. While Victoria was predominantly affected, some suburbs in Queensland also contributed to this decline, indicating variability within the market.

Rental Market and Yields

• The pace of annual rental growth in Queensland is easing, with rental values increasing by 7.1% over the past year. This marks a decline from the 8.6% growth seen over the 12 months to March.
• Month-on-month rental increases in Queensland have largely flatlined, with only a 0.1% increase observed.
• Gross rent yields in Queensland have remained steady at 3.7% for the 21st consecutive month. This consistency in yields reflects stable investor confidence in the rental market.

Sales Activity and Market Dynamics

• Properties in Regional Queensland are taking slightly longer to sell, with median days on the market increasing from 39 to 45 days.
• The national trend of declining mortgage originations for ‘riskier’ lending types continues. Interest-only loans rose slightly to 19.8% in the March quarter, but this remains well below historical highs.

Dwelling Approvals and Housing Supply

• Dwelling approvals in Queensland surged by 10.4% in July, the highest monthly increase since May 2023. This growth was largely driven by unit approvals, which increased by 33.7%, while house approvals saw a modest uplift of 0.3%.
• Increased dwelling approvals suggest a positive outlook for future housing supply, which may help alleviate some of the upward pressure on property prices and rents.

Economic Indicators and Lending

• The Reserve Bank of Australia (RBA) maintained the cash rate at 4.35% in August, contributing to a stable economic environment for property investors and homeowners.
• Inflation appears to be easing, with the monthly CPI indicator for July showing a 0.4% rise over the quarter and a 3.5% annual increase. The introduction of energy rebates in Queensland has helped ease inflationary pressures.

Outlook for Toowoomba and Regional Queensland

• Despite the recent slowdown, Toowoomba and broader Regional Queensland remain attractive markets, particularly for first-time buyers and investors looking at the more affordable property segments.
• The steady rental yields and an increase in dwelling approvals indicate a balanced market that offers opportunities for both investors and homebuyers.
• As we move into the final quarter of 2024, market watchers in Toowoomba and Regional Queensland should expect continued steady growth in property values, with affordability playing a crucial role in driving market dynamics.

Conclusion The Regional Queensland property market, including Toowoomba, continues to experience moderate growth and stability. With steady rental yields, easing inflation, and increased dwelling approvals, the region offers a conducive environment for both investors and homeowners. However, with growth favoring the affordable end of the market, prospective buyers and investors should remain vigilant and well-informed to make the most of the current market conditions.

Download the full Corelogic report here.

This update provides a concise overview of the property market trends in Regional Queensland and Toowoomba, incorporating data from the CoreLogic September 2024 report.