Townsville a Hold or Sell ?

Hi All,

Looking for some advice from our Nth Qld people please. I have an investment property in Douglas ( townsville ). It is a quality 2003 constructed 4 bedroom dwelling on 600m block near the University etc. It is a current DHA property, however, the lease has been reduced and I will be running solo from September this year. Currently getting $440 per week.

I have held this for 5 years and purchased it for 400,00K and I reckon I will get $420,000 if I sell today. My concerns are this :

  • Vacancy Rate is about 4.3% in Townsville apparently ?
  • Flat market for at least 5 years *( I stuffed up and bought at the top )
  • Need to achieve the $440 or more to stay afloat ( still negative though )

Do I hold on - rent it privately and hope i achieve around that money ?
Do I cut my losses and dump it and look elsewhere ? ( no doubt will lose $$ )
Do I try and maximise the potential rent somehow ? ( DHA paint it inside/out and re carpet etc at the handover of the property )

I feel that I need to hold because I held for 5 years without any GAIN and I feel that it will run soon. Then again - it has been threatening to do this for past few years. If someone can suggest a Property manager up there that would be awesome if I decide to stay on.

Any advice is always appreciated.
 
Sid Greenwood manage my place in Kirwan and I've found them to be really good. A small firm with good customer service.

I think the market up here will continue to grow over the next ten years. Investment up here is still happening. I just bought up here this year and am looking for some good growth in the next five years.
 
Hi parra1

In my view, the Townsville property market is definitely due for some growth. If you have a look at the attached graph (rpdata) you can see where it sits relative to Brisbane. image.jpg

Personally, I am avoiding selling now as it has only just moved into recovery according to Herron Todd White, and has some way to go.

Townsville is a mixed market at the moment, with high vacancy rates probably due to a lot of new stock recently coming onto the market and the slow down in mining. However, population growth is strong, and Townsville continues to go from strength to strength. The opening up of the Townsville foreshore has given it a real boost, and the local vibrancy is indicated by fully booked restaurants and a lack of parking on occasions. Local business confidence is down, yet I see tradies flat out, and new stores popping up all the time. Major companies continue to invest in the region, with a Masters store set to go up next to Bunnings, which already has a reputation as the busiest in Australia.

In terms of your property, you can expect to get less rent than what it is achieving on a DHA lease, and due to the current vacancy rates. A quick look on realestate.com.au suggests anywhere from $375 to $450+pw, however there are few 4 bedders available. I recommend that if you decide to hold, make sure you get your property manager to align all future leases to be up for renewal around the peak period - end of Jan.

My property manager recommendation is contingent on them agreeing to a discounted rate, so speak with me further if interested.

Cheers

Jen
 
I have just bought in Townsville and I did this because I think there is solid growth to occur over the next few years. There has been a lot of supply appearing in the last few years (Rasmussen, Bohle Plains, Greater Ascot, Mount Louisa, Burdell, Bushland Beach), which is still happening, leading to minimal growth, but Townsville is also growing, both in population and development.

A lot of these developments are further out of town, thus making everything else closer to town.

BR
 
I have just bought in Townsville and I did this because I think there is solid growth to occur over the next few years. There has been a lot of supply appearing in the last few years (Rasmussen, Bohle Plains, Greater Ascot, Mount Louisa, Burdell, Bushland Beach), which is still happening, leading to minimal growth, but Townsville is also growing, both in population and development.

A lot of these developments are further out of town, thus making everything else closer to town.

BR

Is there more land available for these developments to continue? If so won't there be supply matching the demand therefor stagnant growth for the same reasons as the last few years.
 
Is there more land available for these developments to continue? If so won't there be supply matching the demand therefor stagnant growth for the same reasons as the last few years.

There's still a lot more supply coming on line up at Stockland's North Shore development (Burdell) and around Deeragun as well.

Most of the supply seems to be in the western suburbs in the former Thuringowa city area rather than the eastern parts closer to Townsville City.
 
In Townsville, inner city land is pretty limited. There is currently a lot of infill and redevelopment going on in terms of revitalising the city and there will likely be a short term oversupply in the city. There is also good supply in the outer suburban areas which have seen developers going gangbusters!

However, as the inner city is regenerated, and demand increases, this is likely to be absorbed. In the surrounding suburbs, there is very little available land, out of the flood zone, and in close proximity to the CBD and the Townsville Strand!

Cheers

Jen
 
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