Happy new year! As we open our empty new calendars and ready ourselves for the year ahead, it’s timely to glance backwards. A review of the past helps us maintain some perspective and it reminds us that while it feels tough now, it’s definitely been tougher.
As a rookie agent in 1980 I was taught that real estate values doubled every seven years and trebled every 10.
I purchased my first block of land in 1975 for $4,250 and sold it four years later for $4,900, leading to my first home purchase that year — a near-new low-set home in Rasmussen for $36,000, instead of the highset home in Cranbrook that I could have bought for just $28,000!
Roll forward to 1980 when I first started selling houses and the average sale price was around $45,000. I fondly remember selling 16 Burgess Street Village Haven for Reg and Shirley Ludbrooke for $87,500. It was a two-storey red-brick family home and it was a sale to be proud of in front of my peers in the office. It was a big sale and I remember my commission was $1,218.75. I thought I was the richest agent in the world!
From 1988 to 1993 house prices in Townsville doubled. We were selling homes in Kirwan for $55,000 and then selling the same home again five years later for around $110,000.
Townsville’s market then took a breather and there was no capital growth until 2001. In fact, there was a very small correction of around 5 per cent between 1993 and 2001.
GST was introduced in 2001 and it affected commission on real estate sales (and in my view it still does today).
Shortly after this, the market took off and escalated quickly through to 2007. I can honestly remember in 2005/06 listing a property one day and selling it two days later for more than the listed price.
Then in 2008 the GFC hit the world and no markets were spared. Share markets collapsed as did the Australian real estate market. A decade later, Townsville is still feeling the hangover to the tune of a 20 per cent to 30 per cent fall in residential real estate prices. The commercial sector is facing similar woes.
We would like to think the worst is behind us and that the market has bottomed out. We use the term “green shoots” and both commercial and residential sectors are reporting a more positive market albeit with very cautious tones.
What will 2019 hold? Nobody can be 100 per cent certain but everyone at the REIQ is cautiously optimistic that the market is going to see some positive growth. Here’s to a strong year ahead!