Port prices weather perfect property sector storm

Real Estate Market

Paul Bugeja

Guest Columnist

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Port Douglas Property Shop real estate agent Rosie Wang sees the market as still relatively strong in Port. Image: Newsport

The tail end of the global COVID pandemic, war in the Ukraine and global construction supply chain issues have created a perfect storm for the construction industry.

Pointing to data coming out of the construction industry, Nerida Conisbee, Chief Economist for the Ray White Group, sees this perfect storm as a challenge for the property sector, at least in the short term.

As prices continue softening across the country, and interest rates march upwards, Conisbee would normally expect housing prices for established properties to stabilise or even fall for the rest of the year and into 2023.

However, construction costs are up nine per cent (the highest rate recorded since the introduction of the GST), industry insolvencies are up 30 per cent over a 12-month period and lower migration is leading to a shortage of construction workers.

Due to this inability to access materials and labour, it’s likely that less new homes will be built.

This is also leading to situations where homes already in the construction pipeline will be delayed, which, according to a recent article in The Age, is something Metricon customers in Melbourne are already experiencing.

The domino effect?

A rise in demand for existing homes, which, while a boon for sellers in that it could reverse the slowdown in prices and once again push prices up, is not such great news for buyers.

The other domino to fall from this somewhat dire-looking situation will be the flow-on effect of a tighter rental market at a time when vacancies across the country are already at unseen lows, something anyone looking for a rental property in Douglas Shire can relate to as something of an ongoing local issue.

However, in terms of local property sales, Port Douglas Property Shop real estate agent Rosie Wang sees the market as still relatively strong in Port.

“Demand is outstripping supply and some properties are being sold even before any advertising,” said Wang, with the caveat that, “Some higher priced properties are waiting for the market to catch up with their pricing.”

Ray White’s Mark Flinn hasn’t noticed a change in supply. Most properties are averaging 30-40 days on the market before being sold, and, despite the shortage of stock, which Flinn doesn't imagine will change in the foreseeable future, he can’t see current activity levels shifting or the market changing.

“The prices are holding steady - we had three auctions on Monday night…all sold under the hammer with multiple bidders, which was a great result.”

In terms of construction, looking back at the local building and development history of Port in the past 15 years. Flinn points to “minimal activity” meaning that, “As a result, we are paying the price now, with extreme shortages for new homeowners and renters.”

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