The month in review: Regional NSW
By Herron Todd White
April, 2010
SOUTHERN HIGHLANDS
The Southern Highlands area is situated approximately
one-and-a-half-hours’ drive south-west of Sydney. It
showcases beautiful parks with established landscaped
gardens, heritage attractions, annual festivals, boutique
shopping, local town shows, golf courses and green
countryside vistas. The major town centres include
Mittagong, Bowral, Moss Vale, Berrima and Robertson.
The Southern Highlands is a popular location for the ‘Sydneysider’ weekend away and for retirees. There is a
range of accommodation available including Bed and
Breakfasts and luxury motels.
With so much to offer it is no wonder the Southern
Highlands is attracting the holiday home buyer. According
to local agents, there is a demand for well presented
single level, renovated dwellings with between 2-4
bedrooms with low maintenance grounds. Pricing varies
significantly throughout the region. In the township of
Bowral, prices range from $450,000 up to $1,000,000 for
this style of property. There are also substantial prestige
weekend homes on acreage with manicured grounds and
these come with a multi-million dollar price tag.
The tourism and property sectors were affected by
the Global Financial Crisis. The Sydney residential and
prestige markets have now stabilised, and consumer
confidence is growing in the general economy and in
the property markets. The predominant buyer is Sydney
based. Interest in these ‘weekender’ properties in the
Southern Highlands is now increasing and this trend is
predicted to continue in the medium and long term.
The Southern Tablelands (not to be confused with the
Highlands) is located approximately two hours drive
south-west of Sydney with Goulburn (pop. 24,000) the
main city. It was Australia’s first inland city and attracts
many tourists and passing travelers from Sydney and
Canberra. The area is rich in local heritage, offers annual
festivals and rural attractions. Tourist accommodation is
mostly hotel/motel style accommodation. Currently due
to low vacancy rates in Canberra, overnight/short stay
tourists and travellers are also staying in Goulburn and
commuting to Canberra.
In surrounding small rural areas like Crookwell, Binda,
Grabben Gullen, Bungonia and Marulan, there are also ‘weekender’ style rural parcels or ‘lifestyle blocks’ which
attract people from Sydney looking for a country getaway
on the weekend. Pricing is more affordable and varies
between $100,000 to $500,000 for a small acreage parcel
with an average cottage. The market for this style of
property is steady at the moment. We consider that this
trend will continue in the short to medium term.
MUDGEE
Mudgee might not front a beach, but there are plenty of
ideal locations within the region for holiday spots. The
rural lifestyle property market is very popular with city
slickers looking to escape the rat race and make their way
to Mudgee for a quiet weekend. The standard 10-hectare
allotment located in the timbered mountains around
Mudgee seem to be the ideal location for these buyers.
Vacant 10 hectare allotments range from $80,000
through to $350,000 depending on location and added
improvements. Dwellings tend to range from onebedroom,
weekender style dwellings through to sixbedroom,
six-bathroom executive residences. Recent
rainfall has added to the street appeal of these types
of blocks and enquiry levels have increased in the first
months of 2010. If seasonal conditions remain good we
should see this market stay relatively strong throughout
2010 and beyond.
BATHURST & ORANGE
Areas most likely to have holiday homes within the
Bathurst and Orange area are in the mountains to the
eastern side of the region closest to Sydney. Areas like
Hartley, Kanimbla Valley, Oberon, Kandos, Cullen Bullen
and Rylstone are located on the western fringe of the
Blue Mountains within picturesque mountainous areas.
These areas are within a two-and-a-half-hour drive of
Sydney, and this proximity is major drawcard for the
predominantly Sydney-based purchaser.
Holiday homes in these areas are typically small rural
residential lots with relatively minimal maintenance/
upkeep, however located in relatively remote areas
away from townships and hustle-bustle. Improvements
can vary greatly from barely habitable shacks to large
old heritage style homesteads where the original rural
holding has been subdivided and sold off into a number
of smaller rural residential lots.
The price range varies according to the standard of
accommodation and the level of services connected to the site. For very basic accommodation, properties start at
the low $300,000s and go up to more than $– million for
more substantial properties. It is not uncommon for the
higher priced properties to have more than one residence.
Many owners place tenants in the second dwelling and or
having an onsite ‘caretaker’ in lieu of charging rent.
These properties were affected by the GFC with sales
volumes dropping significantly and an oversupply of
stock to the market. Ultimately, that led to reduced values
during that time and many properties were sold under
duress.
Local agents in those areas are now reporting increased
enquiry again and a rise in sales turnover, however
properties are not achieving the same price levels that
were achieved at the height of the market.
NORTH COAST
With an abundance of scenic and under-developed land
stretching from mountains to lakes, rivers and beaches,
the Mid North Coast of NSW has long been recognised as
an ideal holiday location, possibly ever since convicts first
arrived in Port Macquarie in 1821 for an extended stay
away from Sydney.
Living a less hectic lifestyle, most local residents are
unlikely to own a ‘weekender’ type holiday house or
unit, the minor exception being those from western rural
areas who enjoy a tree change-sea change. A majority of
owners of ‘weekenders’ in the region come from the more
populated areas to the south such as Sydney, Newcastle,
and rather shockingly the Central Coast, which over the
last two decades has been extensively developed and
now sees some residents needing a place to get away.
The 50-64 age group forms the largest proportion of ‘weekender’ ownership, and this stems from affordability.
This age group is more likely to have paid off a mortgage,
have lower child costs, are considering downsizing and
also thinking of retirement. Furthermore upon retirement,
owners making their ‘weekender’ the new principal place
of residence will avoid Capital Gains Tax upon re-sale.
Following the GFC, the ‘weekender’ market has had an
oversupply of property for sale and coupled with weak
demand, this has seen falls in value in the vicinity of 10%
to 20%. Whilst a more healthy confidence re-emerged
in late 2009, this has largely been offset by interest rate
increases. Purchasers buying ’weekenders’ on borrowed
money are hence now being more cautious, and those
considering negative gearing should reflect on the
impact renting will have on their own private use.
A fundamental requirement of a holiday house or unit is
for the owners to enjoy repeated visits and as a general
rule any more than a two to three hour drive will limit
usage. As such, the Great Lakes region being furthest to
the south has a higher proportion of ’weekenders’, Greater
Taree a lesser extent, and The Hastings even fewer still.
Access to the region via the Pacific Highway continues
to improve with the Moorland by-pass opening in March
2010, the upgrade from Coopernook to Herrons Creek
expected to be complete in mid 2010 and the Bulahdelah
by-pass being well underway.
There is a wide range of ‘weekender’ type property
available for sale, often at affordable prices and readers
might find the following recent sales at lower end of
market spark an interest:
• $350,000 for a five bedroom 1980s weatherboard
house on a half- acre block at Bungwahl.
• $300,000 for a two level, four-bedroom 1980s brick/
weatherboard house with lake glimp sesat Tarbuck
Bay.
• $250,000 for a two-bedroom 1980s weatherboard
house with lake glimpses at Smiths Lake.;
• $165,000 for a two level, two-bedroom 1980s
weatherboard house with lake views at Coomba Park.
• $465,000 for a renovated one bedroom 1980s
weatherboard house directly opposite Boomerang
Beach.
• $220,000 for a two bedroom 1970s brick walk-up unit,
100 metres from the beach in North Street, Forster.
• $290,000 for a two level, four-bedroom 1970s
weatherboard house close to the beach with ocean
views at Old Bar.
• $310,000 for a three-bedroom 1970s weatherboard
house close to river at Manning Point.
• $250,000 for a three-bedroom 1970s weatherboard
house close to break-wall at Harrington.
• $275,000 for a three-bedroom 1970s fibro house close
to lake, at North Haven.
CENTRAL COAST
So far as the NSW Central Coast goes, this months topic on ‘The Shack’, otherwise known as the holiday house, bolt
hole, house up the coast is once again, very interesting.
Being so close to the Sydney Metro, the Central Coast was
a popular destination for holiday-makers and weekenders
from the middle of last century onwards. It seemed
almost everyone had an aunty and uncle or grandparent
with a house on the Central Coast where an escape could
be made after a not too arduous 1.5 to two hour drive
from Sydney. Places like Toukley and Umina Beach spring
to mind as being popular.
As the Pacific Highway was upgraded to a Freeway and
more affordable land made available, the identity of
the Central Coast gradually changed being a holiday
destination to become a permanent base to many with
the daily commute to Sydney being much easier.
Fortunately though, the Central Coast still has a fair
representation of homes owned and used by ‘non
resident’ owners, as holiday homes. This type of real estate
is spread across the length and breadth of the Central
Coast, but most often along the coastal strip.
The mindset and means of the owner usually determines
the location where they purchase.
Places like Patonga, Pearl Beach and MacMasters Beach
seem to attract those looking for a quiet location with
plenty of trees and nature around them. Some of these
areas are particularly attractive to people with a public
profile and the ability to meet the asking prices seen in
these locations.
Those wanting to simply throw the towel over the
shoulder and spend their days on the beach with the kids
and are happy to be seen or part of the crowd, tend to buy in places like Terrigal, Wamberal, Avoca Beach and
The Entrance.
Places in between can include North Avoca, Copacabana,
Blue Bay, Toowoon Bay and The Entrance North.
There are of course, areas away from the coast where
holiday homes can be found, such as the beautiful
Yarramalong Valley or numerous places along the
Hawkesbury River, but these are far less common than
the coastal strip.
Prices vary considerably, and there are some very good
buys available in The Entrance, which still has a slight
oversupply of units. Numerous family groups have taken
advantage of this with good quality and near new unit
purchases being made in the mid to high $200,000s.
Whereas, unit prices in Terrigal and Avoca Beach generally
start at $450,000 and vary significantly depending on the
size, quality, location and view. It is not unusual to see
units being purchased in these areas for $1.5 million to
$2million.
Beachfront houses at Blue Bay, Toowoon Bay, Wamberal,
North Avoca and Avoca Beach are still reasonably popular
as holiday homes, with most being snapped up with little
hesitation. This popularity has driven prices up, so expect
to pay upwards of $1.5 million for a beachfront in the
northern end of the region and above $3 million for the
southern end. Values in places like Patonga, Pearl Beach,
MacMasters Beach and North Avoca vary considerably. A
modest holiday house several streets away from the beach
at Pearl Beach can be secured for as little as $600,000
whereas a beachfront property with a significant dwelling
recently fetched in excess of $5 million.
There does not appear to be a constant in prices paid
for holiday homes on the Central Coast. The main
determinant seems to be linked to the mindset and means
of the individual or family group and the latter, more than
anything dictates the confidence in this market segment.
FAR NORTH COAST
The North Coast of NSW comprises arguable some of the
most beautiful, pristine beaches in NSW, if not Australia.
This is evidenced by the strong tourism market which
frequents beachside townships situated along the Northern Rivers on an annual basis. As a result of the
natural attributes of the coastline and continuous tourism
market, the ‘weekend getaway’ can result in a reasonable
priced dwelling or home unit metres from the beach to
an astute investment which is near positively geared and
may benefit from future capital gains.
Holiday spots’ in Northern NSW range from small coastal
villages located along the coastline form Coffs Harbour
to Ballina, such as Wooli, Brooms Head, Iluka and Evans
Head. The village of Wooli provides basic facilities such
as a general store, small service station, hotel/motel and
Bowling Club. The area is noted for its fishing, surfing and
quiet lifestyle, being approximately 50km east of Grafton.
A ‘weekend getaway’ can be purchased within the village
for a starting price of $275,000 to $450,000. This would
comprise a semi modern style dwelling situated within
close proximity to both Little River and Pacific Ocean. The
most likely buyers for a ‘holiday home’ within Wooli are
investors generally situated within the Northern Rivers
locality and in particular inland areas such as Grafton.
However, investors from further afield are also purchasing
within these villages during the peak holiday periods.
The market for property within these villages is generally
seasonal and is dependent on the tourism influx during
the peak holiday seasons. As a result, a selling period
in the order of 12 months may be required in order
to achieve a sale due to peak holiday seasons. This is
evidenced in the village of Brooms Head, which is located
approximately 25 kms east of Maclean. A recent sale of a ‘holiday home’ occurred on the Pontsettia Crescent, which
is located on the headland of Brooms Head. The property
comprised a part two-storey semi modern dwelling being
approximately 30 years old and having restricted views to
the north-east over the Pacific Ocean. The property was
sold during the Christmas/New Year period while the
tourism market was at its peak. Marketing agents advise
that it may take another 12 months in order to achieve a
sale at a similar value due to the seasonal market.
The top end of the market for ‘holiday homes’ can be
found in Byron Bay where a ‘weekender’ can be sold for as
much as $2 million-plus. Holiday homes within Byron Bay
generally perform strongly on a holiday let basis through
local agents and national based letting agencies. The
most likely buyers for ‘holiday homes’ within Byron Bay
are investors from either Brisbane or Sydney. There has
been recent reasonable enquiry and market activity for ‘holiday homes’ within Byron Bay priced up to $700,000,
however, the market becomes restricted for properties
priced above this amount. Due to recent activity within
the sub $700,000 price bracket, supply for available
product is low. If the current market conditions continue,
then there may be upwards pressure on values resulting
in a capital gain for a ‘holiday home’.
WAGGAWAGGA
The Riverina might not be a traditional holiday destination,
but its location on the outskirts of the Snowy Mountains
ensure it is popular with tourists. One of the favourite
places to visit is the village of Talbingo. Situated at the
base of the Snowy Mountains, Talbingo is located next
to the Blowering Dam and is a hotspot for water skiers
and water sports enthusiast alike. The village is made up
of mostly basic cottage style dwellings which are used as
weekenders and holiday homes.
The Talbingo market is virtually all sub-$200,000 with
basic style dwellings and a limited number of properties.
The market has been static with little surplus money
around the district, on the back of a 10 year drought.
The village of Talbingo has limited services that include
a general store, service station and golf club with a local
bar and restaurant. The closest town to Talbingo is Tumut,
which is about 30 minutes away by car.
With limited demand and virtually no new construction
there are limited opportunities in this market. Most
property owners see the ownership of this style of
property as a ‘lifestyle’ choice and not an investment
tool.
LEETON
So what and where do people buy for their escape to the
country? The what is a fishing shack, a modest dwelling
quite often in need of serious TLC and restumping. The
where is a small rural village with a pub and a river or a
least a good creek. Locations such as Carrathool, Maude,
Booligal and Morundah are hot spots, If you’re lucky you
can pick one up for a little as $20,000 with the majority
priced between $30,000 and $60,000. Capital growth
in small rural villages is minimal unless they are within
commuting distance to a large country township or
regional centre. Prices in these locations are likely to
remain steady and generally are not subject to large price
fluctuations.
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