A NEW report has delivered some good news for investors who are looking to jump into Townsville’s housing market.  

Herron Todd White’s Townsville in Focus report for September showed that vacancy rates for houses tightened by nearly two per cent from May to July, ending a run of softening rental demand.  

However, it was a contrasting result for units with vacancy rates rising to 6.8 per cent in July.  Re/Max Excellence real estate agents Rohan Banning and Lyn Griffiths said the result was promising for investors looking to jump into the established home market.  

Mr Banning said an increase of young people buying first homes could have contributed to the temporary drop in demand for rental units. 

“Well priced established houses close to Townsville city and central suburbs will always be in demand from buyers and sellers due to supply restrictions. 

“Apart from unit development and a few new estates, there will be hardly any increase in supply within 10km of the city. 

“In the current market where house prices are competitive and interest rates are at 49-year lows, we are seeing a lot more investor activity which is a promising sign that confidence is returning.” 

The Herron Todd White report showed median rents for houses dropped $10 per week in the last six months to $338, while unit returns were down $20 to $277 per week. 

It said median rents experienced downward pressure as a result of tenants’ affordability concerns and increasing vacancy factors in the unit sector. 

Despite the slight dip, median rents for Townsville houses are still up $70 per week from mid 2006 and have only just come off a market peak. 

Ms Griffiths said more people had been motivated to buy instead of rent over the past six months, a trend that is reflected in sales volumes. 

“The research shows sales volumes are now back at the levels being achieved in early 2007 with about 320 every month,” Ms Griffith said. 

“There have been many incentives for people to buy property this year, but when those incentives are taken away we can expect a more normal rate of demand from renters. 

“In addition, there is not enough new housing being built to meet population growth which suggests that the pressure on available rental properties will return sooner rather than later.”