Home Rot

Monday’s story about CQ housing prices dropping was good and bad news depending if you’re buying or selling. The market coming off the boil justifies some of the decreases in centres like Gladstone and Mackay. But Rockhampton, a bigger percentage drop on a lower base compared to its neighbouring cities was ‘most interesting’. Apparently banks may not be as liberal with their lending for Rockhampton due to its higher than state average unemployment rate was suggested in an earlier story. Is declining median house prices a concern; are there other reasons than market cooling and unemployment rate. Real estate prices are a concern. For many their home is their most valuable asset. But it is only a real asset if it appreciates in value. Of course the median price for the first 3 months of the year only reflects on those houses sold in that period. But is there a worrying concern with the number of homes built and sold in the greater Rockhampton market to interstate investors with a guaranteed rent for 12 months keeping the median price down for some time when the rent stops they have to be sold. As many of these homes are in the same estates and of similar appearance, if several come onto the market the same time sale prices may not recoup initial purchase price. Then if the homes only met minimum building certification standards and remained unoccupied for 12 months they may end up being sold for substantially less, affecting the median price and the overall perception of the greater Rockhampton housing market by banks and investors. This potentially has long term consequences. If real estate prices don’t increase, owners won’t be able to borrow as much against their homes, Council rate charges are affected, owners retirement plans impacted, investors seeking capital gains look elsewhere; the market may continue in a downward spiral, difficult to reverse. Not to be alarmist, but when you have local builders hesitant to build quality display homes due to concerns banks for whatever reasons will value it less than replacement cost I believe you’ve got an issue every home owner in the region should be concerned about and asking what are all the reasons for a fall when the national median price increased.