Yup-the market has tanked. But, in my opinion, it will be short lived.
Reason?
We are feeling the after effects of the floods. The GFC didn't hurt too much,but the national doom and gloom has scared people. The floods hurt, in more ways then one. We had a period from December to April, where business was at a virtual stand still.Mines couldn't operate,for a limited time,development projects were halted,consumer confidence just plummeted.Everyone was just sitting scared waiting for the next cyclone. In our business, the work just dribbled in, no big projects. First time in 30 years. We were all just watching what the mines were doing.
Of course it didn't take them long to get back on track.
By then a lot of local business had suffered, and quite a number have gone to the wall. Over committed, dependant on continual turn over. Mostly has hit retail and building.
What has happenend is that out of towners have been arriving here in droves,wanting to get on at the mines, or just seeing the opportunities that are here , and no where else, at the moment. The Gold and Sunshine Coast are dead. Cairns is dead. From here to Townsville died during cyclone Yasi and Anthony.( Townville has recovered, and wont take long to strengthen) Rockhampton was flooded out ( careful buying there folks! We saw the suburbs, and the houses were not pretty in many places)
But the out of towners might suddenly be on huge pay packets, but they don't have much in the way of saving in the bank. They may WANT to buy, but they can't, so they spend it on toy's, and rent.
The locals are overcommitted, or alternatively, they can see blue sky, and are wanting to change scenery, and restart the projects that they have had on hold, but there are not enough cashed up , local,buyers, at the moment.
Now ,to add to the woes, the banks have tightenend their policies, and many locals want to sell to get their hands on their equity.
That is the reason why it is a BUYERS market here.
It was as if, in May, someone opened the doors and said, 'enter ye and go forth and continue on as usual". The phone hasn't stopped ringing. I am getting phone calls from agents tryng to find accomodation for project managers, etc, who are desperate. People are flocking in for the huge road and infrastructure projects. The Myer complex is full speed ahead. All the other shopping centres are doubling in size . And the people just keep coming in, relocating, for the work.( we, as locals actually hate it, and want to move!)
And we haven't even started on the New mines yet.
Last month,BMA were looking to house staff, and prepared to pay upto $1300 per week furnished, for leases upto 18 months! Agents were ringing everyone on their lists hoping for vacancies somewhere, anywhere.
Therefore, IMO,I can safely say, that come September, Mackay will be back on board. It will take a bit longer for the local market to plateau, after this panic adjustment, but the shortage of houses and the influx of people ain't going to hold it there for too long. If you are buying to rent, this is the place to be. If you are buying to hold, give yourselves a 5 year window to see some decent growth. The mining boom is a 20 year operation, and then some, so we aren't going anywhere, but up, as soon as it is all back on track.
If I was starting my portfolio over again, I would be seriously looking here, and not wait too long.
Gladstone is ok too, but it is small.It has nothing realy to keep the people there, once the work is finished.
The majority of people who 'discover' Mackay, end up staying, hence the forecast in population growth.( again, we locals do not neccessarily like this, but what can we do)
Final hint, the real estate prices do not neccessarily reflect what the vendors are willing to sell for at the moment. The agents are still doing their market appraisals at the perceived values of the vendors. We all know the values of our properies since 8 months ago, have decreased, but the agents still want to milk their commission.The majority of vendors are not willing to budge, until they realize that there HAS been an adjustment, and that the market is telling them that. Some properties are sitting for months without any interest at all, because they are over priced for the current market, by about 20K. Agents fault.Vendors mentality.
That is why I am trying to sell privately. I believe I have the prices right, and there won't be a lot of give, dollar wise. Already have taken the agents commission off, and a bit more ( it was listed last month, for a month at $539K- agent market value) I could be interested in some creative finance approaches, though, if anyone has a deal they want to discuss. it's $89 from brisbane(one way), to come and have a look!