Affordable housing is helping drive the Toowoomba property market / File.
A DIVERSE local economy, including nearby mining projects, and affordable housing is helping drive the local Toowoomba property market.
The city still has a very affordable median house price of $290,000, according to the Real Estate Institute of Queensland's September quarter data, and its median unit price is $255,000.
Rob Matta of PRDnationwide, who has analysed the Toowoomba market, says the population is predicted to continue to grow which will increase demand for buying and renting.
He says it is already an extremely tight rental market which is helping push demand by buyers.
"The rental market is so tight that is what is really driving everything else,'' Matta says.
"Rental growth has been quite impressive over the last three years.''
He says the market is still an affordable one for investors and there is the opportunity to achieve good rental yields.
Residential Tenancies Authority September quarter figures show median rents for a three-bedroom house in Toowoomba rose from $265 per week in 2010 to $280 a week for the same period this year.
Withcott currently has the highest median rent of $320 a week for a three-bedroom house.
Two-bedroom units had a median rent of $200 in 2010 which had risen to $220 by this year with 385 new bonds issued in this quarter.
Matta says vacancy rates in Toowoomba are less than 1 per cent.
He says there is a lot of proposed development and growth in Toowoomba which will also make it an appealing place to live and buy.
There is a $130 million proposal by QIC to redevelop its Grand Central and Gardentown Shopping Centres, which Matta says is an indication of how strong the belief is that the town will continue to charge ahead.
As well as being a large farming area, Toowoomba is the gateway to the Surat Basin and is starting to feel some of the benefits of being close to the mining industry.
"The region's economy is underpinned by major enterprises which include health and community services, education, transport and agriculture, and this sustained activity in these industries has been keeping the local unemployment level in check,'' Matta says.
During the six months to June 2012, 875 houses sales - about 36 a week - settled in the Toowoomba area, up 4.2 per cent on the previous June 2011 half-year period.
Matta says buyers appeared to prefer more affordable price points and smaller lots of land.
Significant land projects will reach the market from 2013.
"With a growing trend of buyers looking to purchase smaller lots to meet budget and lifestyle re-
quirements, it is expected that a majority of new stock to come to market beyond 2013 will be delivered on sub 600sq m lots,'' Matta says.
"On this basis, activity in the sub $150,000 price range is likely to increase from 20 per cent of total sales over the next year, as developers exploit the opportunity to address pent-up demand for well-priced, well-positioned land.''
Major residential subdivisions have been approved for Wilsonton and Glenvale.
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