Australia’s housing market has seen a surge in short-term property sales, hitting a decennial high. This trend is particularly noticeable in regional Queensland, where rapid property turnovers have marked a significant shift in housing trends. Sunshine Coast resales has hit a 10-year high of 23%.
Key Takeaways
- The frequency of homes being sold within three years of purchase in regional areas is on the rise.
- Regional Queensland has witnessed the steepest increase.
- Mortgage stress and robust capital growth are influencing this trend.
Analyzing the Data
Data from the property research group, CoreLogic, has shown an exponential increase in the quick resales of properties in rural Australia, reaching a peak of 18.9% in the last decade. Historically, such short-term sales were attributed to property flipping, but current data implies that mortgage stress has led to an era of “proactive selling”.
The Queensland Scenario
Queensland’s regional areas recorded the highest number of properties subjected to swift resales from 2022 to 2023, with the Wide Bay region leading at 27.4%. Eliza Owen, the Head of Australian research at CoreLogic, explained that there were several reasons for this trend’s prominence in 2023.
They include factors like strong capital growth and higher mortgage payments. For regional Australia, there’s the added element of a potential reversal in sea change and tree change trends. But mortgage stress could also be a significant factor here.”
Low-Interest Rates and Rising Mortgage Stress
Owen pointed out the influence of “low-interest rates” that people had secured for a fixed term of three years, noting that the short-term sales trend is “particularly relevant in a rising interest rate environment”.
Migration Patterns Influence
Owen stated that regional Queensland had “seen some of the highest concentrations of short-term selling”, accounting for more than a fifth of overall sales in the year to August. As a result, the average number of homes “held for a short period of time” rose from around 14.5% to approximately 21%.
However, Queensland isn’t the only state witnessing this trend. Owen observed that “most of regional Australia” is experiencing similar patterns.
“It could be that people are proactively selling to get ahead of a mortgage they can’t afford, but the good news for such sellers is that property values have increased rapidly.”
The Brighter Side
Owen added that despite the challenging situation, the rapid increase in property values could be a silver lining for sellers as they could pay off their debts and potentially have a surplus.
Changing Migration Patterns
The trend of short-term property resales is not confined to regional Australia. Owen noticed “more normalised levels of migration from capital cities to regions”, which could be contributing to this trend.
While Brisbane has seen a bit of an uptick in short-term resales, the trend is very much confined to regional Australia. It could reflect some of the changing migration patterns we’ve seen post COVID lockdowns as well.”
Conclusion
The rising trend of short-term property sales in regional Australia, particularly in Queensland, reflects the changing dynamics of the housing market. Influenced by factors such as mortgage stress, low-interest rates, and changing migration patterns, this trend provides a deeper insight into the impact of economic and societal trends on the real estate industry.
