Mackay, Townsville property prices could soar as Sunshine, Gold Coast markets dip

As national property prices decline, investors are beginning to look beyond Queensland's coastal hotspots for more attractive properties, placing potential local buyers at risk of being priced out of the market. Property analysis firm CoreLogic suggests that the once-booming property markets of the Sunshine Coast and Gold Coast may experience a slight downturn, similar to Australia's capital cities, due to high interest rates and cost of living pressures.

However, other regions of Queensland may face a new wave of buying frenzy as investors seek cheaper properties. During the post-COVID property boom, the Gold Coast and Sunshine Coast saw their property prices soar, becoming the stars of the Australian property market. By the end of 2020, both areas had reached record median house prices, with the Sunshine Coast at $700,000, later increasing by over 50% to $1.1 million, while the Gold Coast reached $1.025 million.

CoreLogic's latest data shows a slight 0.1% decrease in Gold Coast property prices in December, while the Sunshine Coast saw an increase of approximately the same amount. CoreLogic's head of research, Eliza Owen, predicts that both regions will see price declines in the first half of 2025. She anticipates a nationwide price drop of between 5% and 10%. "The report basically suggests that prices have to loosen up, and it looks like that's finally starting to happen," she said. "There's a huge disconnect between household's real borrowing capacity and prices, and I think we're starting to see that play out in some parts of Queensland."

Ms. Owen stated that a reasonable mortgage amount should be around three times a household's annual income. If Sunshine Coast property prices were to meet this standard, prices would be close to halved, at around $500,000. While wealthy residents from southern capital cities may continue to drive up prices, she stated that "that can't go on forever either." "Even in Sydney, the median house price is at $1.2 million, and the median price on the Sunshine Coast is now around $1.1 million. That's going to make some people think twice or re-evaluate the benefits of such a big lifestyle change."

Ms. Owen believes that first-time buyers and those seeking affordable investments may turn their attention to northern regions, where the recent property boom was not as drastic. "Areas like Mackay-Isaac-Whitsunday and Townsville have also seen growth due to the movement of military personnel," she said. "These are the markets that are more likely to see strong price growth in the next year or two." Currently, properties in Townsville and Mackay can still be found on the market for under $600,000. Mackay real estate agent Chrystle Campeo stated that local property values have seen "surprising" increases.

Ms. Campeo said, "We're getting a huge amount of inquiry on properties from locals, first-home buyers, and investors." She noted that a property in the coastal suburb of Eimeo, 20 minutes north of Mackay's CBD, received 42 offers and ultimately sold for "nearly $100,000" above the asking price. Ms. Campeo, who has lived in the area for 15 years and leads Chrystle and Co Property, said that local residents are at risk of being priced out of the market, particularly for homes under $600,000. "It's very, very difficult for local buyers at the moment; they're definitely being priced out by investors from the south," she said. "Investors are probably 60%, and locals are 40%." "People from the south are selling smaller homes of higher value and can enjoy a better lifestyle here." "I think, with the demand that we've got at the moment, there's not enough property on the market."

Data released by CoreLogic in October 2024 showed that Mackay's median house price rose by 16.5% to $530,000. Townsville increased by 25% to just over $510,000. Further afield, Gladstone rose by 25.2% to $507,986, Wide Bay's Burnett region rose by 18.8% to $400,495, and Rockhampton rose by 16.4% to $530,000. Ms. Owen stated that, nationally, property prices have never declined for long periods. She said that the most recent national increase was about 14%, while the worst recorded property price drop was in the 1980s, with a decline of 8%.

Due to housing shortages and the expectation of interest rate cuts later this year, she said "it's very easy to re-stimulate the market." "The falls aren't going to be huge compared to the gains we've seen over the last couple of years," she said. "Maybe when we start to see falls, people will come in droves and basically take advantage of that opportunity."