Job losses fuels downward spiral in Gladstone house prices
FOR homeowners and investors in Gladstone the first half of the year has been a bit of train wreck, with property values and prices dropping significantly.
A partly renovated home in Kin Kora sold in July 2015 for $410,000. It sold again in March 2016 for $363,000 which is a $47,000 loss in just under nine months.
A fancy apartment overlooking the marina that was bought in 2011 for more than $1.5 million ended up selling this year for $810,000, at a discount of 47%.
But these tough choices about whether to sit tight and ride out the slump or cut and run in order to recoup whatever equity remains in the property have had to be made by many.
In the latest property report by real estate researchers Herron Todd White, there appears to be little light at the end of tunnel.
Despite the general feeling among real estate agents that the housing market is bumping along the bottom and has been for some time, Herron Todd White still has Gladstone positioned one notch above.
The downward trend in the local property market can be attributed to recent job cuts, a lack of future job prospects in the region and an oversupply of housing, the report says.
"These job losses have had and continue to have a direct effect on the already over-supplied property market in the Gladstone region," the report found.
"New job opportunities in Gladstone are very weak and without a major project on the horizon, the Gladstone economy is likely to remain subdued.
"Despite early signs of stabilisation at the end of 2015, the market for established housing appears to be continuing to fall in 2016," the report stated.
Herron Todd White specifically mentioned job cuts at Rio Tinto Yarwun, NRG power station and QAL, as well as looming job losses for Bechtel employees on Curtis Island, as significant drivers of the depressed housing market.
On top of this, vacancy rates in the Gladstone region have continued to head north, with the most recent data indicating a vacancy rate of approximately 11% or slightly more than 1000 properties.
The latest unemployment rate was sitting at 6.7% in December which is up more than a 1% on June 2015.
In June 2014 the unemployment rate was 4.3% and much lower than the national average at the time.