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Stalled Gladstone housing development has silver lining

Callum McAusland has another 1000 lots approved for development at Forest Springs.
Callum McAusland has another 1000 lots approved for development at Forest Springs. CHRISSY HARRIS

IT IS no secret Gladstone's housing market was put through the ringer last year.

And, with the number of vacant houses collecting dust around town, it's not surprising residential developments have slowed to a trickle.

But there is a silver lining: it's a buyer's market and house prices are at an 11-year low.

Queensland Treasury reports that of 4898 residential lots ready for development, just 1934 lots will "most likely" be developed in the short term.

But Real Estate Institute of Queensland Gladstone chairman Mark Spearing reckons this prediction may be too optimistic.

>> Gladstone a ripe opportunity for first home buyers

"It's probably a little deceptive," he said.

"It implies that these houses could hit the market next week but there are few, if any, who will develop in Gladstone.

"In the current market you can't bring a development online and sell at these prices and make a profit."

Builder and owner of Tenheggeler Homes Troy Tenheggeler echoed Mr Spearing's comments, saying while most developers had plenty of land available they were unlikely to begin sub-divisions until demand for housing returned.

"The reason developers get a lot of approvals for land is that as soon as there is a lift in the market they know in six months they're going to have stock," he said.

Ryan Sirait’s mum Yetty and his daughter and wife Aileen and Marleen Sirait are very excited about their new house.
Ryan Sirait’s mum Yetty and his daughter and wife Aileen and Marleen Sirait are very excited about their new house. Mike Richards

However, with five building projects under way, Mr Tenheggeler said it had been his strongest start to the year since 2014.

The residential development profile conducted by Queensland Treasury reported that Gladstone Regional Council approved 190 dwellings last year compared with 819 approvals in 2014, a decrease of 77%.

According to the council's planning department's Matthew Kelly the decline stems from a slow-down in construction at most of the housing development estates in the Gladstone region.

"The approvals for the current new residential estates are what we need for the foreseeable future," he said.

"Growth is happening and most of the estates are still positive but we've got what we need at the moment."

Painting a slightly different picture, Kirkwood's Forest Springs estate development manager Callum McAusland said there was an incorrect perception of an oversupply in the Gladstone housing market.

"In reality the numbers of houses that meet the requirements of Central Queenslanders are very limited," he said.

"There's about 20% of good quality housing here and it's moving quite quickly.

"Now is the time to buy.

The Forest Springs estate has approval for 1000 residential lots but is unlikely to bring on another stage of development for 12 months."

Queensland Treasury reports show that in 2015 the average sale price for a house in Gladstone was $380,000 while units and townhouses went for $275,000.

That is down $35,000 and $85,000 for houses and units on last year's average and it puts current house prices on par with 2005 levels, according to Mr Spearing.

However, with so many residential housing lots ready to go, Mr Spearing said there were some reasons to smile.

"It's good to know there are plenty of houses in the pipeline and this paints a good long-term picture for Gladstone," he said.

"But at the moment nobody is going to bring in land to lose money."

Mr Spearing said rental vacancies were about 10%.

"When you look at the history of weekly rents in Gladstone current figures are showing we are near the bottom," he said.

Topics:  development, gladstone, silver lining, stalled




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The improvement would be mild when compared to past cycles