While high interest rates have hurt many metropolitan property markets, prospects are bright for brokers in regional Australia as the commodities boom and well-diversified local economies keep property markets in good shape.
Colliers International research director Rory McLeod told Mortgage Business there were plenty of strong property markets outside of the capital cities – good news for brokers operating in those regions.
“The hard and soft commodity booms are translating into strong economic growth in many regional areas, as well as strong population growth and strong employment,” he said.
Paul Taylor of Toowoomba Home Loans in Queensland said the city’s diverse economy had kept the local property market strong.
“Toowoomba is resilient enough to survive the tough times. Our diverse income streams give us stability to get through ups and downs without too much trouble,” he said.
While volumes have dropped off since March, Mr Taylor said borrowers were becoming more confident as a September rate cut looked increasingly likely.
Mr Taylor said there was "a lot of excitement" in Toowoomba about growth in mining activity in the region, which was likely to boost employment.
The fact the city is also home to a university (the University of Southern Queensland) and an army base are other factors underpinning strong migration and population growth in the region.
Queensland is not the only state with healthy regional markets.
Cheryle Hayward of Midwest Home Loans in Parkes NSW said mining activity had been a major driver of the local economy.
“Our local copper industry keeps the local economy strong,” she said.
“There has been a bit of a drop off in borrower activity since the very last rate rise, but it’s all systems go at the moment as talk of a rate cut heats up."
But over in Western Australia growth has dropped off despite the resources boom.
Susan Mason of Mortgage Choice in Mandurah WA said while consumer sentiment lagged, she expected markets to bounce back in time.
"The fundamentals of the local economy are still extremely strong however consumer sentiment is low. Obviously that will need to improve before we see borrower activity pick up,” she said.
All three brokers agreed that first home buyers were likely to be at the top of the next wave of property market activity.
“When the market recovers, quite often it recovers from the bottom up,” said Mr Taylor.
Ms Mason added: “When they do return, a large number will purchase the homes others are offloading to make new purchases. That should create quite a good rolling effect."
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