THE only way is up. At the bottom of the property market cycle, the Mackay region is doing it tough.
The Daily Mercury yesterday reported that Mackay’s residential vacancy rates were the highest in the state, despite a positive drop to 6.8%.
Real Estate Institute of Queensland Mackay zone chairman Peter McFarlane said while many overseas and out-of-state investors were losing out with the downturn, many houses recently sold and currently on the market were owned by local mortgagees.
“In towns like Moranbah and Dysart there is a lot of activity with mortgagees selling their houses,” he said. “Those places have had a lot of repossessions.”
During the boom, popular house and land packages with guaranteed rental periods sold well; however, many properties with income guarantee periods are coming to an end, with investors unable to find tenants. Those that can are accepting far lower rents.
“When things were flying, the rent appraisals were very high and the figures reflected well in investment packages,” Mr McFarlane said.
Many of the houses developed to accommodate the resource boom are in Mackay’s Northern Beaches, where Mr McFarlane said a glut of available rentals now existed.
“The more recent developments in the Northern Beaches have had rent price reductions in the vicinity of 30-50%,” he said. “I would estimate that 80-90% of investors (in the Northern Beaches) were absentee owners.
Investors need to appreciate ups and downs. We are on the down of the property cycle. Building approvals have dropped something like 40%.”
Mr McFarlane said the resource companies’ fly-in, fly-out policy that has hurt Central Highlands’ communities has already had a significant effect on the Mackay market.