'Too harsh': Gladstone's real estate heads to market bottom
IT APPEARS time has stopped in Gladstone.
Property gurus Herron Todd White released their national property clock this week which put Gladstone one stop away from hitting the bottom of the market.
Despite a general feeling among real estate agents who say the market has already hit rock bottom, according to Herron Todd White's findings, there is more pain on the way for commercial and residential property owners in Gladstone.
The average time on the market for a house in Gladstone has come down slightly but still sits at a reasonably lengthy 99 days and with transactions down 18% vendors have been encouraged to cut asking prices.
Gladstone's property market has been slowly grinding to a halt over the past year and with little hope of major projects slated to be built in Gladstone getting up, job cuts at Queensland Alumina Limited and NRG Gladstone Power Station and a rise in mortgage delinquencies, confidence in the market can be expected to remain low.
"The industrial market in Gladstone remains volatile and there is significant uncertainty regarding the short-term direction of the market throughout 2016," Herron Todd White's report read.
"Local agents are generally reporting very little enquiry for industrial property for either lease or sale."
The median price for houses in the six months ended December 31 last year reached $359,500 which was up 3.2% on the previous quarter but down by 4.5% overall on 2014 prices.
The report singled out Calliope saying that development continued well past the peak of the market which has resulted in an oversupply of houses in the area.
"Most of the oversupply is of modern housing in new estates and there are also significant vacant land stocks available," the report said.
But Colin Burke from Gladstone Elders said what was being felt in Calliope was indicative of the Gladstone market as a whole.
"We think we're at the bottom of the market but you never know until the market starts to turn," Mr Burke said.
"What we've been seeing is that if houses are priced right there are buyers at the entry level of the market.
"It's a good time for people who are renting to buy," Mr Burke said.
Mr Burke suggested that current property prices had dropped to 2003 levels, which he described as a horrendous price adjustment.
"It was abnormal [during the boom] and prices were well above where they should have been," he said.
"But coming back the other way the price adjustment has been too harsh."
Although Mr Burke did not think Gladstone had to wait for another major project to come to town for the market to turn, he was encouraged by the rental market in Gladstone and the number of residents eying opportunities to pick up bargains.