By Herron Todd White
Lismore/Casino/Kyogle Property Updates
At the start of the year, it was predicted that “the residential market for the year ahead in the Lismore area is expected to hold ground with a steady as it goes vibe” and the Richmond Valley/Kyogle Council areas were to experience some softening.
Hmmm….it kinda was a game of two halves.
During the first six months of the year, the Lismore City area showed some admirable resilience with the residential property market across most suburbs (apart from North Lismore and South Lismore) showing some pleasing gains, particularly in Goonellabah where there were 30 odd house sales in the $500,000 plus price range. Well-presented rural residential stock with added features such as creek or river frontage, pool or rural views still appeared to turn over reasonably well. The other less desirable lifestyle product needed to be on point with their price range in order to snare a sale.
For the Casino/Kyogle areas, market activity for the first six months was relatively steady albeit at a more sedate pace compared to the regional centre of Lismore.
However, rental accommodation became rather tight. This was primarily due to new people coming into the area of which a majority were just not ready to buy into the market. Hence, already limited rental stock became even more stretched.
During the last half of 2019, market activity in Lismore, Casino and Kyogle has generally tapered off. Even with three RBA rate cuts in 2019 from 1.50 percent in February 2019 to 0.75 percent in October 2019 does not appear (as yet) to have caused overwhelming confidence. The fallout from the banking commission and resultant tightening of lending conditions would have played a part as well. Any progress from here will largely rest on the shoulders of the lenders and how they make their next move to coax the wary customer into action.
It clearly is not a situation where the borrower rocks up to the lender with an empty dinner bowl and says “Please Sir, can I have some more?” to which the lender replies “Yes, of course, just supply your three last payslips, yearly credit card and bank statements and explanation of your over-usage of your Netflix account…and then we can talk”.
One thing hasn’t changed though since the beginning of the year…and that is the persistent cry of the real estate agent for more quality listings like the “clear ringing of silver trumpets on a chilly winter morn”. They have buyers….but no one really wants to sell.
One of the surprises for the year was the continued demand for the larger rural lifestyle product of 20 hectares plus with a well-presented dwelling and ancillary buildings and ground improvements, particularly for properties in close proximity of the regional centre (Lismore) and the rural townships (Casino, Kyogle). We also noted a steady demand for larger tracts of good quality grazing land in the areas between Lismore, Casino and Kyogle. However, as the drought and dry conditions look likely to continue for some time yet, it would be a very brave person to predict that the demand for such a property type would improve. I mean… no grass, no feed for stock and creek water drying up?? Who wants to pay for tank water every two months or so?
We also noted that the breakthrough in 2018 of suburban properties in Lismore City breaching the $600,000 price bracket continued well into 2019. This is seriously big money in these parts. However, as the number of sales mounts up, it is something that cannot be dismissed as being an anomaly. It appears to be the new norm for the upper end of the market in Lismore City.
In summary, the residential and rural residential property market for Lismore, Richmond Valley and Kyogle Council areas for 2019 improved steadily for the first half of the year. The remaining half of the year has tapered off, but with lack of stock to sell, good quality properties should hold value and would be keenly picked off if offered for sale by approved buyers hiding in amongst the trees ready to pounce…..providing the lenders do their bit.
Speak with a Lismore Mortgage Broker today.
Ballina Property Updates
The market throughout the Ballina Shire began the 2019 year somewhat slowly after heated market conditions throughout 2016, 2017 and early 2018. Whilst market conditions were comparatively slow, no noticeable falls in value levels were experienced. The second half of 2019 has seen a moderate increase in market activity, however local agents still report that listings need to be priced appropriately for any interest to be generated.
The prestige market in the sought after coastal locations of Lennox Head, Skennars Head and East Ballina, as well as the sought after rural localities towards the north of the Shire, remain strong which can be partly attributed to the recent upswing in the Sydney and Melbourne markets. Local agents report limited stock available for sale across this market segment, creating some upward pressure on value levels, however again listings need to be priced appropriately
Clarence Valley Property Updates
The Clarence Valley performed mostly in line with predictions over the 2019 period. The region continued to see market momentum rollover from 2018 fuelled primarily by the Pacific Highway and Grafton Correctional Centre upgrades. As predicted, these projects and their associated workforces, as well as the locale’s relative affordability, desirability and quaint beachside appeal, are likely contributors to the increase in median house price in beachside Yamba, which has risen to $550,000.
Further south in Grafton, predictions also came to fruition. The Grafton residential market saw a noticeable stabilisation in the recently rising median house price with no positive shift recorded for the 2019 period, albeit that the rate of sale recorded has already surpassed that of 2018. Overall as predicted, many of the primary influencing factors behind the positive property market trends of 2018 continued into 2019.
Coffs Harbour Property Updates
Looking back at the year, the Coffs Harbour market has been on a bit of a roller coaster ride getting off to a slow start and increasing pace as the year progressed.
The slower market conditions at the start of the year were attributed to reduced interest which was evident from capital city markets, increased APRA lending restrictions for broader investment loans and media reports of declining market conditions, especially within Sydney and Melbourne. Our market, like the capital cities, was impacted by the fallout from the Royal Commission into banking practices and the resultant negative effect on lending policies and available finance.
Since the recent interest rate reductions to a record low 0.75 percent, we have seen a resurgence in market activity. Current evidence indicates market enquiry and sales rates have increased with most good quality property types holding value. There is still some buyer resistance for a property that is overpriced, lacking in key features or situated in a secondary location, however, there is good demand and some continuing increases in value being experienced for entry to mid-level residential product.
The prestige market ($1 million plus) has also increased with leading real estate agents reporting increased buyer enquiry, although this market is traditionally more thinly traded and reliant on out of town purchasers, typically coming from the capital city markets. Given the recent rebound in the capital city markets, selling agents are reporting that this out of town market is coming back.
We have recently seen our first $2 million plus beachfront sale, the first since 2015 and making a total of eight since 2007. This statistic indicates the thinness of the Coffs Harbour residential prestige market priced greater than $2 million. We have seen no real disparity between the owner occupier, investor, first home buyer or rural residential versus town purchaser with all market sectors seeming to have lifted since the interest reductions. The RBA decision to reduce interest rates has definitely created strong real estate activity across the board. We will have to wait and see whether we see this flow into the retail sector.
Speak with a Coffs Harbour Mortgage Broker today.
Mid North Coast Property Updates
During the first half of 2019, demand remained slow along the Mid North Coast due to various factors including a softening of investor demand in the residential market throughout the region and uncertainty during the election run-up. Over this period, values stabilised and selling periods lengthened, returning to the more normal periods of up to four months.
Coastal towns within the region (especially the major regional centre of Port Macquarie) continued to see reasonable land sales activity in new subdivision developments, resulting in continuing but slowing building construction activity.
The May election with the Liberal/National coalition government win, three interest rate cuts between June and October and the relaxing of some lending policies have seen a steady increase in activity as the weather has warmed up. This has the Mid North Coast property market heading into the festive season on somewhat of a high. The increased activity together with limited stock has also seen a reduction in the days on market and modest price rises.
Of most surprise in 2019 was the milestone sales, namely the $2.97 million reached for a well-publicised property breaking previous canal sales records within Port Macquarie.
Central Coast Region Property Updates
At the beginning of the year, we commented amongst other things that the market would slow and that 2019 would be less prosperous than the previous year.
This has proven partly correct. The market did slow a little, but overall it pretty much ran without too much fanfare. Real estate agents report that attendances at open houses were down in the first half of the year, but back to normal toward the latter part.
Leading into the new year, we did say the local market had peaked and we think that has been proven.
We also said that some of our older suburbs toward the northern end of the region would gain some attention on the back of newer suburbs experiencing popularity. We mentioned areas such as Kanwal, Gorokan, Charmhaven and Toukley. As the year draws to a close, we did see a little more activity, but not as much as expected. Maybe next year.
Toward the middle of the region, we mentioned areas such as Narara, Niagara Park and Wyoming would leverage off the revitalisation of the Gosford CBD, but from what we can see, the limited availability of stock being sold prevented any great advances in this regard.
We mentioned the region’s peninsula areas of Umina Beach, Woy Woy and Ettalong would be challenged in terms of values being sustainable and for the most part, values have come back a little but not too much overall.
A large level of focus was on the unit market within and around the Gosford CBD. The developments under construction for the past few years have been completed and settlements of purchases are being called. For the most part, the prices paid off the plan were okay on today’s values, but there were a few issues with not meeting the purchase prices for some developments.
Southern Highlands Property Updates
Looking back at our February publication for the Southern Highlands region, our main points raised were impacts that a falling market may have on new land subdivisions and higher-end rural acreage and lifestyle properties. So how did these play out as per our predictions?
We noted an oversupply of new land, particularly in subdivisions such as Renwick and Moss Vale’s Darraby Estate as at Quarter 4 2018, which brought increasing anxiety about discounts that may need to be applied as the market became saturated with vacant parcels.
Well, as predicted, these vacant lands sales have been negatively impacted by a softening market but not as severely as we had initially anticipated, with discounts of between five and ten percent being seen on prices paid around the peak of the market. We have however seen a recent oversupply of cheaply built project homes within this section of the Renwick land release, which has impacted resale values as more and more of these listings hit the market and agents struggle to move them. We are seeing the better quality builds command a reasonable price, however overall we are still seeing the far better money commanded in the older section of the Renwick estate.
Looking at the rural lifestyle market in and around the Southern Highlands, it appears that this portion of the market has remained fairly strong overall, with most properties holding their values or commanding more as the year progressed. As always, quality of the product has played a key role and anything purchased at an above market price in 2017 has seen slight corrections, however, overall reports from local agents suggest that interest from Sydney buyers seeking weekenders or large good quality rural land holdings are still promising. Typically this rural residential space has been difficult to gauge due to a lack of transactions and this has certainly been the case in 2019 as transactions across all markets have dried up significantly, however as the year has progressed and transactions increased in spring, we have been surprised at the overall stability within the space.
Looking further north into the Wollondilly Shire, we have seen smaller rural residential holdings (ten hectares and under) around the Pheasants Nest and Bargo area the most heavily impacted with up to 20 percent discounts being noted within this space.
Overall the start of 2019 was slow with transactions down and buyer interest across the board being limited, however as the year passed and we saw the back end of an election and a few interest rate cuts along the way, there are certainly better numbers starting to be achieved across the board and agents report a late spring flourish of buyers as Sydney appears to be back on an upward trend.
Southern Tablelands Property Updates
After peaking in mid-late 2018, the Goulburn region began the year with uncertainty, experiencing softer market conditions after a long period of strong growth. We saw properties across all sectors recording longer selling periods, weaker sale prices, a smaller number of buyers and fewer transactions, some areas experiencing larger declines than others. This was as a result of tighter credit availability, negative market sentiment and the uncertainty surrounding the federal election taking place in May.
With the end of 2019 drawing near, agents and valuers are noting more optimism across the board within the Goulburn property market as we shift from a declining market to a stabilising market. This is as a result of confidence being renewed in buyers post the election in May, another cash rate drop in October and overall market sentiment shifting. It is evident that selling periods have generally reduced in more recent times, there is stronger buyer activity and more transactions taking place, however, this is typical when spring is in full swing. Whilst conditions appear to be improving, inferior quality properties and those in secondary locations are still expected to struggle in the current market.
Albury Property Updates
In 2019, the Albury-Wodonga and north-east Victoria property market have shown resilience set against an eventful year for national and global issues. The first half of the year was dominated by the federal election looming in May. This uncertainty created some hesitation in the market as a whole but also mobilized investors fearful that if they did not buy before the election, they may not qualify for exemptions from a new set of property-related policies if Labor won.
A good example of this behaviour was in the snow village of Dinner Plain, 13 kilometres up the road from Mount Hotham, where one local agent had an Easter ski chalet buying frenzy fuelled by pre-election jitters. Interestingly this market has remained strong for the remainder of the year, whereas the trendy tourist township of Bright at the foot of the Alpine area appears to have stabilized after a sustained and phenomenal hike in demand and growth over the past three years. The owner-occupiers of the region pre-election adopted a very stoic wait and see attitude and agents reported a drop in sales activity and listings as people held off any big decision making.
So the post-election scenario, given the status quo was held, should have meant a return to the pre-pre-election status, however by this time everyone was being saturated with news stories about the decline in the Sydney and Melbourne property markets and although prices held in our regional area, another form of uncertainty crept into the fast-approaching spring property market. Coupled with daily reports on the drought, unrest in Hong Kong, the US-China trade war and climate change, it seemed the remainder of the year could get a little choppy as people closed their wallets with little prospect of wages growth and paused a little longer on property-related decisions. With less stock hitting the market, agents reported sales were still moving but activity was lower as new listings slowed and spring was somewhat subdued across the region. There also appears to have been an increase in off-market transactions and sales without the intervention of an agent.
All in all, 2019 to a great extent might be remembered as business as usual with a lot of background noise that did not really change our markets very much and reaffirmed the stability of our regional area that is for the most part, very grateful not to be subjected to the dreadful drought conditions further north. What would be a terrific finale is completely out of any market control… RAIN! Wishing everyone a safe, happy and restful festive season.
Wodonga Property Updates
The Wodonga market has slightly declined over the past twelve months with the median house price down five percent from the same time in 2018. Sales activity in the housing sector also decreased slightly by around eight percent on the previous 12 months. The vast majority (63 percent) of all dwelling sales occurred in the $200,000 to $400,000 price bracket.
Unit sales have remained stable. Sales activity within this market, however, has returned to 2017 levels after declining to 53 sales in 2018. The decline was most likely due to the political uncertainty of the election and the fallout from the banking Royal Commission.
Once again, the median land price has remained stable, although the market has seen a significant reduction in the level of sales activity, declining from 152 to 118 over the past twelve months. Overall the market has remained stable, however, there are early indications the market is beginning to decline slightly.
Probably the most surprising aspect of the market over the past twelve months has been the failure of the market to surge again with regard to sales activity, particularly in light of the cash rate being below one percent and the re-election of the Liberal Party.
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