Although the Gladstone property market is recovering, for those who purchased in the boom period, it may be some time until they will see the same dollar value of their home.
During 1976 when the first phase of the Gladstone Power Station was commissioned, the supply and demand of the housing market was very different. Fast forward to 2019, Gladstone has undergone many changes including the LNG boom. At this time, there was a lot of hype around our market which lead to investor speculation and subsequent oversupply of housing once the workers camps were established and the construction workforce finished the projects.
Given the increased population and limited accommodation options, largely due to a transient workforce, buyers were willing to pay a premium for property. This was a key driver in the large spike we witnessed in the property market, with standard homes appreciating in value exponentially until the peak in 2012.
Then as per the most common concept of marketing and economics, consumers are more inclined to spend more when they have more. Inversely, consumers are too inclined to spend less when they have less. It’s a directly proportionate relationship. Many people had to sell the ‘toys’ they had, which were acquired using their construction wages. Freshly out of work and with a downturn in resources and commodities, families also had the challenge of either relocating for work or for the bread winner to do FIFO elsewhere such as Darwin or Western Australia.
What this meant for sellers is that they had two options: sit or sell. Some chose to wait for the market to improve and play the waiting game. Others sold their properties even for a loss just to move on. As rents started to fall, investors started to feel the cash flow pinch. This ripple effect has driven many people into bankruptcy as the mortgage repayments outweighed the rental return leaving them with a property worth less than the loan too.
Today the market’s condition is looking promising. There is light at the end of the tunnel. Gladstone now has the infrastructure to allow and stimulate sustainable growth within the region. In short, it’s looking positive for the coastal city.
If you would like to learn more about how much your property is worth in today’s market, contact the team at LOCATIONS estate agents today to book your complimentary appraisal. Stay informed, be educated and stay a step ahead with our professional service and advice.