The month in review: Regional NSW
By Herron Todd White
May, 2010
DUBBO
The least expensive estate in Dubbo would be Rosewood
Grove, which consists of c1960to c1980s single storey,
fibro or brick, ex-housing commission dwellings. Land
prices range from $25,000 to $30,000 for a standard
residential block. House prices range from $100,000 for
a two-bedroom dwelling to $140,000 for a four-bedroom
dwelling. Land and dwellings sold by the Department of
Housing are subject to a Restriction on the Use of Land,
which prohibits the property from being occupied by
anyone other than the owner for a period of seven years.
The owner-occupier restriction does not appear to have
had a negative effect on the marketability or value of
properties within the estate, which is evidenced by the
number of properties being sold. Buyers in this estate
are generally first homebuyers and low-income families.
The benefit of purchasing in this estate is the affordability
and potential for value increases once all the housing
commission dwellings have been sold. However, the area
is still regarded as a low socio economic area, which has
experienced some social issues in the past and this does
deter some buyers.
The most expensive areas in Dubbo would be
Grangewood Estate and Delroy Park Estate, which
are constructed around the Dubbo Golf Course. Both
estates were developed in the early 1990s with new
stages progressively released over the years. Land with
golf course frontage ranges in price from $130,000 to
$250,000. Houses with golf course frontage range from
$450,000 to $650,000, although one place recently sold
for $920,000, which is currently the record sale price in
Dubbo. The majority of high cost properties in this area
are owner occupied although a small number are leased.
This area will soon be enhanced by the development of
a Woolworths supermarket and retail outlets that are
currently under construction and set to be completed by
the end of the year.
BATHURST
The most expensive suburbs of Bathurst are Wentworth
and Blue Ridge estates. The least expensive suburbs are
Stewart and South Kelso.
Wentworth and Blue Ridge
These estates comprise the following:
• Larger 3000sqm rural residential allotments.
• Near new large executive style dwellings with quality
PC’s usually complimented with extensive landscaping
and ancillary improvements such as in ground pools.
• Values are typically $500,000-plus with a handful of
properties pushing the $1 million mark.
• Buyer profile would be high-income professionals and ‘tree changers’ cashing out of Sydney for a country
lifestyle.
• These properties have a higher land value base and
larger building covenants making them more exclusive
and expensive than other areas.
• These properties can be sensitive to interest rate
increases because the owners tend to be geared
higher around their income, and can be more volatile
then other market segments.
• Yields on these properties are low but there has been
good capital growth during the past 10 years.
Stewart and South Kelso
These areas comprise the following:
• Smaller to standard size residential allotments.
• Older style small, ex-housing commission dwellings in
fair condition and limited presentation. The dwellings
typically are dated and require upgrading and
maintenance.
• Values are typically $100,000 to $200,000.
• Buyer profile would be low-income families and first
homebuyers.
• These properties are located in low socio economic
areas with negative neighbourhood reputations.
• These properties tend to show higher rates of return
but are coupled with higher risk and lower capital
growth rates. This market segment is also more volatile
than medium market segments.
ORANGE
The most expensive suburbs of Orange are Amderdown
and Orange central. The least expensive suburbs are
Glenroi and Bowen.
Amerdown and Orange central
These estates comprise the following:
• Amerdown comprises rural residential allotments
close to Orange. Orange central comprises standard to
larger residential allotments.
• Amerdown has large dwellings of varying ages with
quality PCs usually complimented with extensive
landscaping and ancillary improvements such as in
ground pools. Orange central has large historic style
dwellings, which have been restored, extended over
the years.
• Values are typically $500k plus with a handful of
properties pushing the $1m mark.
• Buyer profile would be high income professionals and
people involved in the mining industry.
• These properties have a higher land value base and
higher locational appeal. The historic homes continue
to achieve a premium in price being exclusive and
more expensive than other areas.
• These properties can be sensitive to interest rate
increases because the owners tend to be geared
higher around their income, and can be more volatile
then other market segments.
• Yields on these properties are low but there has been
good capital growth over the last 10 years.
Glenroi and Bowen
These areas comprise the following:
• Smaller to standard size residential allotments.
• Older style small, ex housing commission dwellings in
fair condition and limited presentation. The dwellings
typically are dated and require upgrading and
maintenance.
• Values are typically $100k to $200k
• Buyer profile would be low-income families and first
homebuyers.
• These properties are located in low socio economic
areas with negative neighbourhood reputations.
North east Bowen in particular has significant socio
problems
• These properties tend to show higher rates of return
but are coupled with higher risk and lower capital
growth rates. This market segment is also more volatile
than medium market segments.
CENTRAL COAST
Generally speaking the least expensive areas to buy
into on the Central Coast are those that are older and
away from the beach and waterfront areas. Starting
from the southern most end of the coast, these would
include freestanding houses at Umina Beach, Empire Bay,
Bensville, Kincumber, Narara, Niagara Park, Ourimbah,
Wyong, Berkeley Vale, Killarney Vale, Gorokan, Toukley,
Lake Munmorah, Chain Valley Bay, Gwandalan and
Summerland Point.
It is not unusual to see a purchase made in the low to
mid $200,000s for a two to three-bedroom house with
a garage in these areas on land parcels between 500
and –650sqm. They are generally aged in appearance
and style, being over represented by fibro/metal
constructions but considered to represent good value
for the first homebuyer or small investor, with returns at
around 5% gross. Some of these areas are considered to
be slightly under valued given their history and should
be monitored.
For those seeking a newer house close to the freeway,
areas like Hamlyn Terrace, Woongarrah and Kariong are
quite popular with prices generally upwards of $365,000.
Predominantly, houses in these areas are project style four
bedroom brick and tile with a double garage. These areas
are well within reach of the first home-buyer and investor
returns are also around the 5% gross. The potential for
value growth in these areas are considered to be good as
market confidence continues to return.
Unit, villa and townhouse prices have been down for
several years now as the oversupply of this product was
beaten down. Very good buying can be seen in this
market with most properties being close to transport and
shops. Prices start from the low $200,000s.
At the other end of the market price spectrum, high-end
values are concentrated along the costal strip and smaller
rural/residential lifestyle areas. Beachside areas including
Pearl Beach, MacMasters Beach, Copacabana, Avoca,
North Avoca, Terrigal, Wamberal, Forresters Beach, Bateau
Bay, Blue Bay, Toowoon Bay and Norah Head have proven
themselves resilient during market downturns.
Beachfront prices generally start at around $3 million in
the southern areas, with the price point for areas to the
north like The Entrance North, Norah Head and Forresters
Beach being much lower. The style and standard of
houses in these areas vary considerably.
A word of caution extends to those unwary buyers
when looking at redeveloping beachfront properties
regarding coastal erosion and sea level change. Extensive
and careful investigation should be undertaken in both
council areas.
With a few notable exceptions, properties fronting
Brisbane Waters generally start at the $1 million mark
and there are some very nice areas to be looked at here.
Properties fronting any of the three lakes in the Wyong
Shire are generally much lower in values.
Rural/residential lifestyle properties are generally around
between one and two hectares in size. Some very
nice and extensive dwellings have been built over the
years in these areas. The most gentrified, popular and
expensive areas are at Matcham and Holgate where it is
not unusual to see $3 million-plus plus purchases. Areas
like Jilliby, Yarramalong and Dooralong are known for
their beauty and serenity, but they have been plagued by
controversy over the years by mining and other unwanted
developments. Hence, values and marketability in these
areas have been constrained.
MID NORTH COAST
Within the major cities and towns along the Mid North
Coast, numerous opportunities exist for those entering
the property market, whilst premium properties are
well priced in comparison to the upper end market in
Australia’s capital cities.
Within the town of Forster, the most affordable housing
is located just to the south and west of the original town
centre. The lower end prices are a result of small allotment
size (450 to 500sqm), small dwelling size (two or three
bedrooms) and are of typically dated 1960s construction.
This type of accommodation is generally priced from
$220,000 to $270,000. Young families entering the
property market would be tempted by a $235,000 house
in Hadley Street, positioned 200 metres from Forster
Primary School and 1km from both Forster Beach and
One Mile Beach. Development opportunities exist for
property around Breckenridge Street zoned 2(B) Medium
Density and close to Wallis Lake.
Premium prices in Forster generally peak at $735,000
for canal front property and $750,000 to $1 million for
houses located on Bennetts Head Road and around
Underwood Road. These houses are generally of large
size brick construction, with panoramic ocean aspect and
close proximity to beach.
In the City of Taree, the cheapest houses are located
within the Department of Housing area around Mudford
Street ($100,000 to $150,000) with above average rental
returns. Outside of this area, there are a number of houses
scattered around Wingham Road and Stoke Circuit selling
between $150,000 and $200,000. These houses generally
date from 1960 to 1975, are of fibro/weatherboard
construction, with two or three bedrooms and single
garage.
The upper end housing market in Taree ($500,000 to
$700,000) is mostly concentrated in the developing subdivision
of Taree West nearby to Manning River, and upon
semi-rural acreage around Cedar Party Rd to the northwest.
Houses in this price range will be typically large and
modern, and sales have noticeably slowed throughout
the past 12-month period.
Department of Housing property forms the very lower
end of house prices in Port Macquarie, with prices in
the Muston St area typically selling from $185,000
to $240,000. Outside of this area, the next lower end
housing stock is priced between $250,000 and $300,000
for dwellings located in the Clifton Drive area, around
Grant Street and a small scattering around Transit Hill.
These houses are usually constructed circa 1960-1980,
with three bedrooms and single garage.
Premium prices in Port Macquarie ($800,000-plus) are
paid for houses located in the canal area, from the Summit
Road hillside to Lighthouse Beach, with a small scattering
on the developing southern fringe at Emerald Downs.
FAR NORTH COAST
The North Coast of NSW comprises a wide variety of
residential property which results in diversity of product
extending from absolute beachfront prestige dwellings
to basic cottages situated within the small rural villages
or hamlets.
Two examples of suburbs or townships, which offer the
least and most affordable detached housing within the
North Coast, are Byron Bay and Bonalbo respectively.
Bonalbo is a small village situated within a semi remote
locality approximately 100km west of Lismore. The village
includes a primary school, tavern, general store and a small
basic medical facility. Development generally comprises
a mixture of older to semi modern style dwellings of
basic to average quality. Recent sales within the village
range from $90,000 to $171,000. These properties have
a land area in the order of 854sqm to 1353sqm and are
improved with older to semi modern style dwellings of
either timber or brick construction with metal roofs. The
dwellings generally include two or three bedrooms and
car accommodation.
The main buyer profile for this product is the owneroccupier.
The main reason why this village is considered to
be most affordable is due to its semi remote locality. As a
result, properties within this area are affected by a reduced
buyer market and require extended selling periods. The
prospects for growth within this area are considered to
be limited due to the stability of prices. Prices within
this locality have not altered by any significant amount
during the past three years. As an investment, residential
properties within Bonalbo can be almost cash positive.
However, the investment is affected by limited rental
demand, the potential for a reduced quality of tenant
and semi remote locality.
Byron Bay is an established coastal locality, which
comprises various residential enclaves and commercial/
retail precincts. Byron Bay is a nationally known tourist
destination, which attracts a large number of both domestic and international tourists as well as a strong
backpacker contingent. Local and regional shopping,
primary and secondary schools, restaurants and cafes
and a regional hospital are situated within the town.
Residential development comprises a mixture of older
to contemporary style dwellings, ranging from dwellings
situated within standard residential suburbs to beachside
locations. A combination of supply and demand scenarios
and popularity of the location has resulted in Byron Bay
being the North Coast’s most expensive locality.
Residential units within Byron Bay range in value from
$300,000 to $350,000 for a one bedroom serviced
apartment to more than $2 million for a beachside duplex
unit or contemporary style development. Dwellings
within Byron Bay generally begin at $525,000 for a basic
cottage to more than $7 million for a prestige dwelling
situated within the Wategos Beach precinct. The buyer
profile for product ranges from owner-occupiers to
investors.
The prospects for growth within Byron Bay are considered
to be reasonable. A good investment within this locality
would be product situated within close proximity to both
the CBD and beaches, which can be let on a permanent
basis or more likely on a holiday let basis.
WAGGA
As Wagga has relatively low property prices in comparison
to the urban cities, interest rates haven’t had such a
dramatic influence on property buyers in this region.
However the higher end Tatton properties will be affected
far more than the Ashmont properties.
Tatton has seen rapid growth during the past 12 months
with land values increasing substantially, and this has seen
a shape increase in property prices. With the majority of
land now sold, the bulk of vacant blocks have building
work commenced or so to be commenced.
Tatton is predominantly ann owner occupied area with a
vast majority being ‘family style’ homes. This has become
one of the features that has drawn people to the area and
increased demand. There is a very limited rental market
and of those properties for rent the yields are well below
of neighbouring suburbs. This, as well as the higher land
prices has kept investors away.
While Ashmont is seemingly a very affordable area, it also
attracts a certain buyer and renter. This has an effect on
investors as the area is renowned for ‘bad tenants’ and
higher yield represents a higher risk.
This basically keeps property prices low in the area. While
some areas of Wagga which have had a similar profile and
are now going through a gentrification, as rental demand
grows through university students, defence personnel
and overall increase in population, Ashmont has not.
I would caution people to get familiar with area before
looking to purchase on potential high yields.
LEETON
Where is the cash being splurged?
Griffith – ‘Possibly the best of both worlds’.
In East Griffith is the recently established Collina
subdivision. Typical homes in this subdivision are
mainly project homes of brick veneer construction.
Accommodation usually includes three or four bedrooms,
multiple living areas and two bathrooms with a good
standard of inclusions. Homes in this area range from
$340,000 to above $400,000 and are rented from anywhere
between $300 and $400 per week. Considering the slow
market at present across the region, there are bargains to
be had and these properties are an investment with both
reasonable rental return and good tax depreciation. You
might say the best of both worlds.
Properties in the North of Griffith are situated on a hill
and offer views over the regional urban centre of Griffith.
These have greater appeal to the owner-occupier. The
homes located on the hill are of a high standard and while
older than properties in the Collina subdivision, they are
not your average project home. The homes on the hill
range from $400,000 to well above $500,000. Vacant
allotments in this area are scarce and attract a premium
when sold.
The only downside to the North East sector is that with
so many project homes being built of similar quality, the
equilibrium between supply and demand is now in fine
balance. With demand still weak and new properties
still being constructed, unless there is a sudden market
upturn there is a definite risk of flooding the market. This
will have an effect on resale values.
At the other end of the scale is South West Griffith, which
is a secondary location, and attracts the first homebuyer
and low to middle market owner-occupiers because of
affordability. The average homes in this area are relatively
small two to three bedroom 1960s dwellings, constructed
from fibro cement sheet and hardiplank. Properties like
these range in price from anywhere from $160,000 to
$200,000.
The area, while not considered highly attractive, is located
close to the town centre. This area represents another
reasonable investment as rents are usually in the range
of $200 to $230 per week. This represents a good return
for an entry- level price, however, tenant selection will be
important and a good property manager is essential.
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