Blog

Is Townsville a Good Place to Buy an Investment Property
Photo showing the road up Castle Hill

The number of rental properties available is at record low levels. This shortage in rental stock means that the remaining properties are in high demand resulting in higher rentals. Propertyology is predicting that these next couple of years will produce the biggest increasing rents that Australia has seen in living memory! Townsville is no exception. In the last six months, our vacancy rates have dropped considerably due to the demand for rental properties. This is great news for potential investors.

A Little About Townsville

 

Castle Hill over Ross River

Castle Hill. Very much loved and used by the locals

Townsville is located in Far North Queensland. This city was established around 1864, which is only 29 years after Melbourne was founded. The city was used as a distribution port for the sugar and pastoral industries in the early development of the region.

During World War 2, over 50,000 American and Australian troops and air crews were based out of Townsville. This military relationship has continued to this day with Townsville now being Australia’s leading garrison city. It is anticipated that the nearby training will be the preferred location for allied forces training by 2030. 

The wider city area is both a modern business hub and picturesque tourist destination. With a growing population of nearly 200,000 people and a great climate, it has all the key ingredients to make your investment in property promising. With more than 300 days of sunshine a year, the average temperature in this part of the north remains an amazing 28 degrees.

Castle Hill is a giant pink granite monolith that stands as a landmark in the centre of the city. There has been a big growth in personal fitness in this region. You will find many people both ascending and descending the hill, mainly early morning and late afternoon. There are also many walking and cycling trails within and around the local area.

The people of Townsville love sport. It is home to the North Queensland Cowboys (National Rugby League) and Townsville Fire (Women’s National Basketball League). There are strong local competitions in Soccer, Netball, Rugby Union, Hockey and Australian Rules Football.

 

What are the main Industries in Townsville?

 

Looking out to Mt Stuart

Looking out from Castle Hill toward Mt Stuart.

Townsville ranks amongst the top ten electorates in Australia per capita income and it is consistently ranked as one of the top ten cities. If you are looking for opportunities to invest, develop, and do business in Northern Australia, Townsville is the perfect place for you.

The city and surrounding regions are growing with new opportunities and challenges. There are many opportunities for existing producers and investors to grow and succeed in local industries. It has strong industries in education, healthcare, retail, construction and manufacturing.

Defence Growth

As the home to the largest Army base in Australia, there is an ongoing boost to this regional economy. This is reflected in new jobs in technology, construction, and engineering. There is also a RAAF Base that is co-located at the Townsville Airport. The Australian government has signed a military area training deal with Singapore, worth AU$2.25bn over the next 25 years. The training will support jobs and grow the economy in the region.

It is the home to two universities that include James Cook University and the Central Queensland University.

Townsville has several large public assets, these include the Australian Institute of Marine Science headquarters and the Great Barrier Reef Marine Park Authority. 

 

Strength in Mining

Townsville is one of the few cities that has the capability to refine zinc, copper, and nickel. There are also plans to have a major $2B lithium-ion battery manufacturing facility in the region. [read more].

The Port of Townsville is the largest commercial Port in Northern Australia handling over 4.5 million tonnes of cargo each year. This will grow as part of the $1.6 billion Port Expansion Project which is due for completion in 2040.

The economy in Townsville is based on two fundamentals: the large and growing presence of the Defence Force and the growing presence of the Mining Sector.  The two trends are interrelated. The increased presence of the Defence Force – which has contributed substantially to the growth and development over recent decades – makes extensive use of the town’s infrastructure and economic activity. In turn, massive development in the nearby mining sector has made Townsville an attractive place for assistance in supporting micro, regional and national government initiatives.

What is the Rental Market like in Townsville?

 

A tropical swimming pool is a staple of many homes in Townsville

 

The quality of the rental property market is dependent on many factors. A property’s condition, the number of bedrooms and bathrooms, location within the city and the proximity to public transport and quality schools are just three criteria. But with the demand for accommodation so high, it’s important that landlords have enough inventory to meet demand, especially in suburbs with tight supply.

“Queensland’s latest quarterly rental vacancy rates show 100 per cent of the State’s regions have experienced a drop in vacancies, with 96 per cent falling within a tight rental inventory range (0-2.5%) and 4% within a healthy rental inventory range (2.5-3.5%) or above.” – REIQ

In Townsville, the vacancy rate has fallen to its lowest level in more than 10 years, reaching 0.7%, well below the state average. This can be attributed to two factors: regional house prices rising at twice the rate of capital cities, and people fleeing COVID-19 affected capital cities. Corelogic report data has shown that sales volumes are up a whopping 38.2% in the Townsville region as of February this year (source). Propertyology believes that it will not be uncommon for households to need to find an extra $2,000 to $5,000 per annum to secure rental properties in this strong economy.

In some areas of Australia there are more properties for rent than there are potential tenants. In these areas, tenants have the upper hand in negotiating their rent. Townsville has the opposite problem. It needs an increase in property investment in order to meet the growth that is being experienced in the north of Queensland. For investors, low vacancies mean one thing… less competition and bigger profits!

Further reading

What are the most popular suburbs for property investment in Townsville?

 

If you have plans to make a big investment in real estate, the property market, or rent your home to tenants, then you first have to find out what to look out for when investing in this property market.

People that visit Townsville are usually surprised at how diverse, large and spread out the urban area actually is. It offers unique opportunities for all lifestyles and demographics. There are many different suburbs around Townsville, each of them attracting a unique type of demographic. This map shows how widely these suburbs extend from the city centre.

 

 

As a decentralized city, a significant portion of the population are not concerned with living close to the city centre. Families tend to live further from the city in suburbs such as Kirwan and Annandale with a wide range of quality schools, sporting facilities and shopping centres such as the Willows Shopping Centre and Stocklands.

The younger part of the population (such as soldiers, tradesmen and students) are more inclined to live in locations close to services that include entertainment such as pubs and nightclubs. They are also more likely to live in units which feature widely around the city such as T1, Urban Quarter and Mint Apartments. 

The savvy investor will often consider “combination factors” when considering a house, unit or other property that will see growth in their Townsville investment.  Some factors that they will consider include:

  • popular school catchments;
  • proximity to popular attractions (shopping centres, The Strand, Riverway, parks and walking trails, Queensland Country Bank stadium);
  • proximity to sporting facilities;
  • access to university facilities;
  • Access to business for work and development projects; and
  • Price to invest and opportunity for growth

The savvy investor will consider the median house price in those areas that have the best from the combination of factors from the data that is available. The best resources to find the information include realestate.com.au, pricefinder, realestateinvestar or through articles published locally in the Townsville Bulletin

A suburb such as North Ward that are close to the city, the Strand with views out to Magnetic Island tend to have a median house price of $775,000 and a rental return of around $400 per week. Neighbouring Belgian Gardens is very popular and a difficult market to access and invest in. It has some fantastic Queenslander homes, great views and proximity to the very popular Belgian Gardens State Primary School.

Map showing the location of popular suburbs such as North Ward and Belgian Gardens

Annandale is further from the city and exists between the Ross River and Lavarack Barracks. It has a median house price of around $421,00 and is in close proximity to Stocklands shopping centre, the Army Barracks, James Cook University and the Townsville General Hospital. It is very popular with families with quality schools such as Annandale Primary State school and the Murray Sporting Complex for community sports such as soccer, hockey, AFL, netball and rugby union.

Map showing the extent of Annandale

Map showing the extent of the suburb of Annandale in Townsville

Kirwan is another one of those locations that is popular with families. It features the popular Willows Shopping Centre, Riverway Lagoons and Riverway Stadium that has featured AFL and cricket games. The median house price is around $325,000.

Map Showing the extent of the Suburb of Kirwan

This map shows the approximate extent of the suburb of Kirwan

For those interested in newer developments, opportunities are available just 20 minutes north of the city centre. This expansion is occurring in Bushland Beach, Burdell and North Shore with a rise in related  infrastructure such as retail to support this new housing. 

Map showing the extend of Burdell and Bushland Beach

Bushland Beach and Burdell are newer suburbs that have been very popular

Another new development is the Elliot Springs just south of the city that offers new housing.

Conclusion

The real estate property market is booming.  There is a low vacancy rate for rentals which is driving competition from prospective tenants seeking the right property for their lifestyle. There are investors both within Queensland and across Australia seeking an investment property that will get them the best return from this regional market.

When you have found your perfect rental property, your next challenge will be to find an A-Grade tenant. A-Grade tenants are those that pay their rent on time and look after your property. You can do this yourself or use the services of a property management agency that uses a stringent tenant selection process. Hiring an agency certainly offers a number of advantages, but you need to have confidence that they will manage your property like they own it. 

It is also important to note that happy tenants are more likely to renew each year, helping avoid costly vacancies, advertising and letting fees. Well-serviced tenants are more likely to accept regular (reasonable) rent rises if they believe they are looked after fairly. They are also more likely to treat your home as if it were their own.

0 Comments

Submit a Comment

Your email address will not be published. Required fields are marked *