By Herron Todd White
Rockhampton Property Update
Over the past month, we continued to see residential property in the Rockhampton region (including the Capricorn Coast) selling. Wellpresented properties continued to be snapped up by purchasers and Rockhampton and the Capricorn Coast is continuing to see an upward shift in prices. With the continued easing of restrictions, it is likely this trend is set to continue should the number of COVID-19 cases remain low in our region. Regionally, we have been fortunate to have a very small number of COVID-19 cases, despite highly publicised concerns of a local outbreak, which fortunately did not eventuate.
As for a lazy $700,000 in the Rockhampton region, we are fortunate to have a few options available for all buyer types Owner-occupiers can generally find themselves an above average quality home in a well-regarded suburb, either a modern residence with quality fixtures and fittings with pool and shed on a park residential allotment (4000 square metres), or a renovated Queenslander on a typical residential allotment. There does tend to be a gap of available stock on the market around $700,000 in this market sector in south Rockhampton, however stock is more readily available in the northern suburbs.
Investors wanting to enter our local markets with $700,000 have the option of purchasing a number of smaller, older homes. This would provide a better return to the investor than purchasing one property for $700,000 with a view to leasing. Entry level into the residential market in Rockhampton for instance for a two-bedroom home in Rockhampton City, out of flood is around $150,000 with average rents around $220 per week. A particular investor may choose to scale up to a mid-range, well maintained, 1970’s high set, three-bedroom property for between $250,000 and $300,000 to rent for between $300 and $350 per week. Having the budget to purchase multiple properties minimises vacancy rates for an investor’s overall portfolio and also provides opportunities for capital growth, particularly in the current climate. Duplexes or sets of flats are likely to provide the best returns from an investor’s perspective. Gross yields on sets of flats range broadly between six per cent and nine per cent in the region, with the majority of flats returning around seven to eight per cent gross. Standard duplexes typically require an initial investment in the mid to high $200,000s. A group of four to six flats should be obtainable with a $700,000 budget depending on location, condition and room accommodation.
$700,000 in the Rockhampton region is considered a healthy budget to park in our market and investment in a combination of property types allows the purchaser to benefit from the combined positive attributes across each property type.
On the Capricorn Coast, $700,000 is likely to buy a modern, elevated four-bedroom home with a reasonable ocean view, or alternatively, a beach shack on a small lot with very good ocean views and either beach frontage or across the road from the beach in popular Cooee Bay. Acre lots improved with a comfortable dwelling, pool and shed would also be reflective of a $700,000 purchase price.
The unit market in the region is generally quite small, however there are limited opportunities for modern units in high rise complexes either on the Riverfront in Rockhampton or opposite the Yeppoon Main Beach.
Overall, we foresee this market sector continuing to perform at a steady rate and with current market conditions, a prudent purchaser can feel confident investing in these market sectors. The region is starting to see the economic benefit of a number of infrastructure projects which have been able to continue to progress despite COVID-19 restrictions over recent months.
Speak with a Rockhampton Mortgage Broker today.
Gladstone Property Update
There is news to report this month! COVID-19 appears to have kick started our market all over again with the volume of sales going through the roof! There has been a significant increase in the number of sales occurring over the past few weeks. We have also started to see prices pushing the upper boundaries for several properties. If volumes continue like this, it is only a matter of time before demand outweighs supply and we start seeing further price growth.
For $700,000 in the Gladstone region, you have a multitude of options to choose from. First up, if you’re an owner-occupier buying just one property, you can get a large, well appointed home with all the bells and whistles in an established suburb, typically on a 1,000 square metre plus allotment with a pool, sheds etc. Alternatively, for around the same money, you can drive ten to 15 minutes out of town to the rural residential suburbs of Beecher, Burua, Calliope or Benaraby and you will get roughly the same improvements, just on a larger allotment.
Investors wanting to enter our local markets with $700,000 have the option of purchasing a number of smaller, older homes. This would provide a better return to the investor than purchasing one property for $700,000 with a view to leasing.
Entry level into the residential market in Gladstone for instance for a three-bedroom home in West or South Gladstone is around $175,000, with rents between about $200 and $250 per week. Alternatively, an investor could buy two modern, four-bedroom, two-bathroom brick homes in the suburb of Kirkwood with achievable rents of around $350 per week. A more modern home brings in depreciation benefits which are also attractive to investors.
Duplexes or sets of flats are likely to provide the best returns from an investor’s perspective. Gross yields on sets of flats range broadly between six per cent and 12 per cent in the region, with the majority of flats returning around nine to ten per cent gross. Standard duplexes typically require an initial investment of between $150,000 and $300,000. A group of four to six flats is also definitely obtainable with a budget somewhere between $300,000 and $550,000 depending on location, condition and room accommodation.
Emerald Property Update
As approximately 95 per cent of Central Highlands’ properties fall under $700,000, so it’s more a matter of how many would you like? In Emerald, it will get you the top five per cent of residential market properties with $685,000 being our top in recent months for a 450 square metre under roof home with full wet bar, pool, shed, outdoor entertainment area and high quality fittings and fixtures. It would also get you the average rural residential property from eight to 40 hectares with the range being mostly $575,000 to $1.1 million. Investors can buy multiple houses depending on location and age or a couple of duplex or triplex properties returning eight to ten per cent gross yield. In Moranbah, $700,000 currently covers the whole residential market with the highest sales recently being triplex and quadplex properties from $600,000 to $700,000 returning ten per cent gross yield.
The market currently feels unaffected by COVID-19 and it’s business as normal with values slightly firming and rents firming. We are very cautious however with the current low coal prices as we typically see a market correction. Contractors in the resource industry have started to be put off and the prediction is more to come depending on the coal price, demand and the Australian dollar. At the same time, we are seeing mixed signals with demand for workers elsewhere, large equipment purchases and still very tight vacancy rates. Watch this space.
Speak with an Emerald Mortgage Broker today.
Mackay Property Update
Monthly COVID update – Mackay has fared relatively well economically through the current COVID-19 crisis. The major industries of mining, mining services, infrastructure projects and agriculture have been virtually unaffected. Employment opportunities in the Bowen Basin and mining services have continued to be strong and with the sugar crush about to commence, increased employment in the agricultural sector should begin. The only set back is the price of commodities with metallurgical coal and sugar currently at low prices.
The effect of COVID-19 on the residential market has been fairly limited. Once the initial shock and reservation over restrictions eased, the market has become very buoyant, with local agents reporting increased buyer demand. This is coupled with a slight decrease in stock with nervous sellers holding off, resulting in ideal conditions for an active market with some agents reporting near record month sales.
So on the back of this, what’s the lazy $700,000 get you in Mackay? At present, a lot, although not quite as much as it did 12 months ago! For $700,000 you can get large modern executive style houses in the modern estates, usually with a pool and shed. If older and character is your style, you can buy virtually any older style Queenslander for this amount. It will be fully renovated back to its former glory and you should have enough change in the pocket for a pool and a shed!
On the investment side of things, the rental market in Mackay has become very tight, with vacancies falling and rentals rising. Some of this is attributable to fly in fly out workers relocating to the region due to cancellation of flights and increased employment as discussed above. Gross yields on multi residential properties range from mid six per cent for good quality modern duplexes, up to between 8.5 per cent and ten per cent for larger, older style flat complexes of between four and six flats. With rental levels increasing, these yields are getting higher, as the increase in rentals is happening at a far faster rate than the increase in market values.
Speak with a Mackay Mortgage Broker today.
Hervey Bay Prpoerty Update
Monthly COVID Update – It appears to be business as usual for the Fraser Coast property market. Properties are continuing to sell with some pushing the top end of parameters. In an already tight rental market, demand is continuing to tighten which is resulting in some rate increases. In a couple of cases, this increase in the rental rate per week has seen some of the lower priced investment properties show a positive cashflow return. Local agents continue to report limited stock and steady to strong demand. Some interstate buyers are even purchasing sight unseen (well, untouched in this now virtual world) so that they don’t miss out on a property. Builders are reporting solid enquiry since the government’s announcement regarding the construction incentive with many booked out until the end of the year.
What’s a lazy $700,000 get you? In Hervey Bay, this price point will place you just into the upper asset class across a broad range of property types. This amount will allow a modest home on the Esplanade or one of the more executive units on the upper levels. If it is size you are after, then you may find an acreage lot in Wondunna with a large home and extensive ancillary improvements such as pool and shed or acreage in Dundowran Beach or Craignish in close proximity to the beach, again with well appointed improvements. This price range is generally an owner-occupier market so if it is an investment you are after, then possibly split this amount into two smaller properties. Our rental market is strong and investment properties in the $300,000 to $400,000 market are generally showing a gross yield in the five to 6.5 per cent range. Duplex and flats style properties are possibly achieving towards the higher end of this range compared to a single dwelling investment. This is again underpinned by our strong rental market.
$700,000 in the Maryborough market has the potential for a broad portfolio. If it is a home you are after, then this price will place you in the top end of the market either in a riverfront location or large rural lifestyle property. For an investor, Maryborough’s rental market is improving and in some cases returns are showing a positively geared cashflow. Blocks of flats have historically shown the best return with some achieving almost ten per cent gross yield. Based on historical sales, this price could see two blocks of flats added to the portfolio. Capital works are however generally required on these types of properties so the true return after refurbishment is lower.
Speak with a Hervey Bay Mortgage Broker today.
Townsville Property Update
We are continuing to see positive activity in the current market with house sale volumes beginning to regain momentum and anecdotal evidence suggesting an increase in activity around land sales and new home construction. Agents report that the amount of stock available for sale is depleting as new listings have slowed.
When considering the option of where to park a $700,000 investment in the Townsville residential property market, the inner city suburbs of North Ward, Townsville City, Belgian Gardens, Rowes Bay and South Townsville are the first to mind. These suburbs are sought after locations close to The Strand, entertainment hubs and the recently completed Townsville Queensland Country Bank Stadium. Historically speaking, these inner suburbs are the first to experience price growth when the market moves and we have already started to see prices firming to slightly increasing in these locations.
The options for this $700,000 investment would be an already renovated property within one of these locations or an entry level property with the extra money put towards a renovation along with the added benefit of the current $25,000 renovation grant.
North Ward is arguably the prime location for an entry level buy and renovate option due to its locational appeal. A renovator house on a small lot would be priced from around $400,000 or on a larger lot, around $500,000. These options provide for a renovation budget of $200,000 to $300,000 which would allow for a substantial renovation or extension.
Speak with a Townsville Mortgage Broker today.
Whitsunday Property Update
The Whitsundays is opening up!
It is exciting news that Daydream Island is opening up along with Hamilton Island’s scheduled opening on 1 August. Flights are now landing at the Whitsunday Airport! Hamilton Island airport will be opening as well. Cruise Whitsundays is back on the water with their ferries to and from islands and reef trips. It is just amazing to see activity around Airlie in the past couple of weeks. Lots of the tourist operators are back on the water as well. While there are still restrictions on restaurants and eateries, it is teaching us all to plan and ring and book ahead of time. The lazy $700,000 will buy you lots of different things in the Whitsundays :
A small acreage with a shed or a pool with a modern house up to 20 years old;
A new, modern four-bedroom, two-bathroom home with double lock up garage and a shed or pool on a 1,000 to 2,000 square metre lot in a modern residential suburb;
An older dwelling with distant ocean views that may require some refurbishment to bring it up to a modern standard on a standard size residential lot.
Monthly COVID-19 update: Over the past month, we continue to see residential property in the Whitsundays selling. Well-presented properties continue to be snapped up by purchasers. With the continued easing of restrictions, it is likely this trend is set to continue should the number of COVID-19 cases remain low in our region.
We do need tourists back to help all business in the Whitsundays and as restrictions are easing, the Whitsundays are all ready to welcome everyone back, even the whales and their calves!
Darling Downs Property Update
Market activity in the Darling Downs region remains steady, however there are early signs of an uplift, particularly in the vacant land space. Builders are reporting a surge in new dwelling construction enquiries, particularly from first home buyers. An emerging challenge for these markets is the rapid absorption of vacant land with lots now in strong demand and limited supply.
The development of new housing estates in Toowoomba slowed significantly in the past three years due to reduced demand for land and a slowing broader economy. With recent government stimulus announcements focusing on the construction sector, to be built homes have been opened up to people who were previously unable to afford the cost of land and construction.
With a specific focus on the $700,000 price point, a very well-presented dwelling or acreage holding can be secured in the Toowoomba region. Approximately 85% of all dwelling sales in the Toowoomba region are in the sub-$500,000 price bracket with the market much less active in the higher price points.
$700,000 will buy a renovated colonial dwelling in the eastern suburbs such as East Toowoomba, North Toowoomba and Mount Lofty while a modern, four-bedroom, brick veneer dwelling can be secured in Middle Ridge and Rangeville. There is limited sales activity in this price point in the more affordable western suburbs such as Glenvale, Harristown and Wilsonton.
A recent example is a renovated, three-bedroom dwelling in Mount Lofty which sold for $725,000.
A three-bedroom, renovated colonial dwelling sold in East Toowoomba for $720,000.
In terms of acreage options, well developed lifestyle properties can be found in Highfields, Cabarlah, Hodgson Vale, Preston and Ramsay for around the $700,000 price point. A large, well presented, five-bedroom colonial reproduction dwelling in Hodgson Vale sold for $710,000.
As this segment of the market is dominated by owner-occupiers, rental evidence and yield information is limited in the Toowoomba region. Broader evidence indicates gross rental yields to be in the vicinity of 3.5 per cent to 4.5 per cent at this price point.
The outlook for residential properties in this higher price bracket may be volatile given the relatively small market segment in this region and the more discretionary type buyer who may be more heavily impacted by the COVID-19 pandemic.