Why will the Hervey Bay Property Market be Resilient?
With another interest rate rise bringing the cash rate up to 2.6%, the reserve bank is trying its best to slow the economy and especially the property market which is set to decline in capital cities. On top of this, our Treasurer is predicting a global recession as a “probable” outcome. High inflation is still here and the cost of living is still rising. So, what does that mean for the Hervey Bay property market? Firstly, the market has risen by around 25% Australia wide during COVID. The difference is that capital cities started on a high base value, whereas Hervey Bay was very much undervalued as we had below average capital growth for a decade prior to this boom. What this means is our property market is still good value now and are still well below Sunshine Coast and Gold Coast values.
Therefore, the ramifications of a market drop will have a lot less impact on us as our values are really where they should be and are not over inflated. Let’s look at a few other factors that will continue to prop up our market in the coming decade. We are in a high growth area, so house demand will stay high. Rental vacancies are at 0.6% which means strong investment returns for rental properties. We also have a large construction backlog of probably 12 months in advance, meaning costs of new houses will stay high, keeping all property prices buoyant. Since COVID there is a continuing trend of movement out of the cities towards regions such as Hervey Bay. This trend is predicted to increase with over Mull expected to be living in the regions by 2032.
Another issue which is unique to Hervey Bay is our average population age, which is currently 51 years old. This means we have a lot more retirees heading here, who are not job reliant. This reflects more of a lifestyle choice, and therefore our liveability does not change with the economy. The aged population throws up another anomaly which is the very high number of health care jobs in our region. This is currently sitting at over 14%. As health care jobs are essential and do not fluctuate with economy changes, this is a very stabilising factor. If you look at key factors Hervey Bay has a good outlook.