By Herron Todd White
Southern Highlands Property Update
As we roll towards the festive season in 2020, it’s fair to say that our early year predictions proved to be halfway out the window, but how close overall did we get? Our initial predictions were for a fairly stable market in which the region would enjoy some minor growth as the Southern Highlands continued to grow in prominence off the back of Sydney creeping ever closer to our doorstep. We were correct in the growing profile of the region, particularly to Sydney. We were however, way off the mark as far as quantum of sales and growth rate, with median prices across the three main townships of Moss Vale, Mittagong and Bowral having increased by between four and 21 per cent for the 12 months to August 2020, and sales rates and prices for the period September to present forging ahead.
We noted in February that central Bowral would be the most likely township to keep an eye on due to downsizers both locally and from Sydney valuing proximity to infrastructure. Whilst this element has turned out as anticipated, the quantum and prices being achieved have been robustly above our expectations, assisted along the way with the unexpectedly positive consequences of COVID-19, as purchasers appreciate the lifestyle benefits of a regional location.
The property fundamentals remain; essentially, good quality product in centrally located positions have been well placed to benefit from Sydney buyer interest with rates of transactions increasing throughout the last three quarters of 2020 and days on market contracting. It is now not uncommon for properties to exchange within two weeks of initial listing.
As mentioned, Bowral has seen extremely strong sales levels including the recent sale of a centrally located property on 1,560 square metres of land for $4.25 million, listed for a total of 11 days.
Another strong performer across the Southern Highlands region has been the township of Bundanoon which has seen a strong price growth over the past six months. Local agents note that buyers and families particularly like the small village charm of Bundanoon which they feel has been somewhat compromised in some of the other townships across the region. By way of illustration, we note the recent sale of a modern style, fourbedroom project home on 2000 square metres of land that initially traded in June 2020 at $962,500 having exchanged contracts in November at $1.065 million, showing over ten per cent growth during this time.
As 2020 rolls to a welcome conclusion, the ripple effects of COVID-19 continue to be felt. We have observed increasing levels of interest in vacant land and dwellings across the three major towns of Mittagong, Bowral and Moss Vale as well as rural lifestyle holdings as young couples, families, downsizers and retirees continue to take the leap to reap the benefits of relocating to the region and the lifestyle benefits that accrue with that decision.
Overall, the most surprising thing for us this year has been the rate of transactions from Quarter 2, 2020. Fast forward from Quarter 1, 2020 with the market outlook being somewhat uncertain, to a position presently where properties are trading close to or at listed prices, with short selling periods and off market transactions being more commonplace, where agents approach property owners directly to entice them to consider selling their properties to waiting qualified purchasers (often being underbidders on previous sales).
The secret may be out. The real constraint for the Southern Highlands remains however, a backlog of civil infrastructure, road, sewerage and stormwater headworks restricting growth in the medium term.
Lismore/Casino/Kyogle Property Update
Given the drama that has played out in 2020 thanks to a particularly nasty virus known as COVID-19 which came to national interest in late February and early March, one would think that our early predictions through twenty-twenty vision (boomtish) for a steady improvement in the property market for Lismore, Casino and Kyogle would come to naught.
However, it is interesting to see that the property market not only remained relatively steady (yes, there was a period between say April and June when real estate activity was quiet) but performed quite admirably particularly from around July and August 2020.
It would appear that the COVID-19 narrative provided an interesting sub-plot whereupon during the enforced lockdown and working from home position, both the employer and employee realized a Eureka moment in that……we actually CAN do our jobs from the home office. This is particularly so within the professional services industry.
For example, a professional couple decided to sell up in Sydney and move to the Northern Rivers. Why? Because the Executive PA to the CEO realized that they could do the same tasks from the dining room table i.e. arranging meetings via phone or Zoom, take notes, send emails etc. So…why spend 30 minutes plus to travel to work in an office in the CBD and do the same tasks they can do from home? The proceeds from the house sale in Sydney helped secure a home on a few acres in the Northern Rivers and STILL left money over to go into the bank account….AND they still get paid the same wage while working from home.
The properties in Lismore, Casino and Kyogle which benefited most from this movement were generally established residential properties ready for occupation, particularly around the $400,000 plus mark and rural residential properties within close proximity of town centres.
Investors and first home buyers also got amongst the action, thanks largely to the record low interest rates on offer. Name a time when you remember bank interest rates were around 2.14 to 2.59 per cent for variable home occupier loans….yeah, I don’t remember in my Generation X era. As a result, towards the end of 2020, it wasn’t long before real estate agents started fretting about limited stock available for sale – demand high, supply low, prices increase.
Vacant residential lots have also proven to be popular. One particular estate in Goonellabah (Eastwood Estate) has already started development of the third stage and given the strength in the market, the adjoining 100 acres has been purchased by the developer. Cut, levelled and retained sites in this estate were achieving $220,000 plus in the prior stages. Now, we have clear indications that similar lots for stage 3 are asking $250,000 plus.
Probably the two most unexpected sales to occur in this small pocket of the Northern Rivers would be the glass ceiling-breaking sale of a fully renovated, turn of the century home in Girards Hill for over $1 million. One top of that, we have a 1523 square metre vacant site in the Eastwood Estate which just sold this month for $400,000….and it comes complete with a mature, native tree in the far corner of the block (something that most modern residential estates rarely have).
In summary, with low interest rates likely to be a feature for the next few years, it will be interesting to see how things develop in 2021….well, it has been given one heck of a launching pad from the end of 2020 despite the challenges experienced.
Speak with a Lismore Mortgage Broker today.
Ballina Property Update
The COVID pandemic is still having an interesting impact on the local housing market around the coastal areas of Lennox Head to Evans Head. There seems to be a very strong demand for properties which in turn has left agents with a limited supply of properties for sale and this is continuing into the Christmas period. We have seen properties selling for above asking prices and people from larger city areas trying to obtain properties within this locality. This movement has kept property prices at a premium and in some areas has seen significant increases in value.
Market drivers within the sought-after coastal areas of the Ballina Shire are typically influenced by the performance of capital city markets – most notably the Sydney and Melbourne markets and to a lesser extent the Brisbane and coastal southeast Queensland markets. Whilst the demand resulting from these capital city markets has typically been concentrated in the more desirable areas of Byron Bay and surrounding localities, in more recent years potential purchasers have expanded their searches into the desirable areas of the Ballina Shire – most notably Lennox Head, Skennars Head and East Ballina, as well as the rural localities of Newrybar, Brooklet, Fernleigh and Tintenbar.
Population pressures have also continued in the Ballina Shire in recent times, with estates in Lennox Head, Ballina Heights, Cumbalum and Wollongbar trying to cater to this demand. We note that the rental market in all Northern River coastal areas is extremely tight which in turn has driven up rental values in the area.
The impact of COVID-19 is yet to be fully realized by the local market however is having a major impact on local businesses in the area of Lennox Head, Ballina and surrounds. The North Coast of New South Wales has seen very little infections from the testing, with the majority of infections in the Byron Bay locality. There is major interest from city residents making the move to the North Coast as businesses realise that home based work is beneficial to some industries. This coupled with the new Ballina and Byron Gateway Airport has allowed people to work remotely and still have access to travel to the larger cities if needed.
Byron Property Update
What a year it has been. 2020 certainly broke the real estate mould in so many ways. If there is any take home message from the past 12 months, it is that human beings have an ability to adapt and overcome obstacles with resilience and fortitude. This was never better demonstrated than in the property market. At the end of 2019, who would have thought that it was okay for:
- Valuers to carry out contactless inspections for finance valuations?
- Real estate agents to FaceTime buyers to show them around houses listed for sale?
- Buyers and tenants to willngly disinfect and wait patiently to inspect property like Noah’s animals entering the ark, two by two?
The Byron Shire certainly had its highs and lows this year. What started out as another normal year unravelled in dramatic style in March and April. Travel restrictions brought the shire’s main industry of tourism to a grinding halt, resulting in massive numbers of holiday accommodation properties becoming vacant and placed onto the permanent rental market. Vacancy rates ballooned and landlords had to accept much reduced rents or none at all. As travel restrictions eased, tourists trickled back and by October and November, things had pretty much righted themselves. Even with the absence of international travellers, there is a sense of quiet optimism in the holiday letting market which is flowing through into the permanent rental market.
After a hiatus in March and April when property sales dipped as both buyers and sellers stepped back from the market to assess what was happening with COVID-19 and the security around jobs and mortgages, the property market unexpectedly surged from July and August onwards. Always a Mecca for cashed up buyers seeking to escape the big smoke, Byron Bay and its surrounding coastal and hinterland communities became a focal point for absentee buyers using COVID-19 as an added incentive to leave the city. Properties with the right vibe are currently in strong demand and sellers are able to ask, and in most cases receive, a premium for their properties.
After what the past 12 months has served up, the take home message is that change is inevitable and those who can adapt in a crisis will prevail. Let’s hope that in 2021, the change will be a little less sudden and brutal and in a positive vein.
Coffs Harbour Property Update
2020 started slowly with the impact of the devastating fires throughout the region which seems such a long time ago now. We expected demand to drop off for the affected localities which it did, however values did not significantly diminish, rather there was a period of no growth with limited turnover.
As we were dealing with the hangover of this tragedy, along came COVID-19. The early onset of the pandemic in March and April saw some sectors of the market in Coffs Harbour experiencing a period of weak buyer demand and some diminution in asset values as people were uncertain of the future, however the various stimulus packages and policies introduced by the federal and state governments proved to be effective on the spread of the virus and ultimately the emergence of a strong regional market. The fact that we are like caged animals forced to stay at home with no interstate movement combined with the government handouts and record low interest rates has seen a remarkable turnaround in the local market. This is evidenced with recent sale transactions indicating higher value levels than those being achieved prior to the onset of the pandemic.
Given this new pent-up demand and the limited supply of product, it is commonplace that prices being achieved are above asking prices with agents reporting several buyers on most properties and sales periods counted in days rather than weeks. We have noticed an influx of out of town buyers trying to escape the more populated cities which adds to the local demand. This is not just affecting sale prices; rental demand is also off the Richter scale with several agencies reporting no properties available for rent. The construction market (new and renovations) has also seen an explosion as many are trying to take advantage of the $25,000 government grant. This has seen the vacant land market dry up as there is very little product to satisfy this demand with prices rising significantly for any available land.
So where to from here? Who knows! This is a market driven by factors we have not seen before. It remains uncertain as to how the property market will be impacted as the government assistance packages end in December 2020 (Coronavirus Supplement) and March 2021 (JobKeeper) with a view to a vaccine being produced in 2021. Will this vaccine be the golden bullet which will bring back traditional market forces or is this the new norm with further pressure to be applied on the already wavering regional markets. Regional markets traditionally offer affordability and lifestyle. On the current trajectory, affordability is diminishing rapidly which will see pressure back on jobs and wage growth to counterbalance the effect of rising prices.
Central Coast Region Property Update
Christmas cheer is in the air. Many of our subscribers reading this current issue are generally focusing forward at this time of year on how best to celebrate the Christmas and New Year holiday break. The Central Coast region is always welcoming of the holiday makers who flock to our region to see out the remainder of the year with much anticipated time to be devoted and spent with family and friends.
However, as much as I’d like to continue to advertise our region as one of the best holiday hot spots on offer in New South Wales, we need to digress and take a look back at the year that was and dissect the important topics that influenced our property market.
For our dedicated subscribers this will come as no surprise. Our February issue was a time when we took a look into the crystal ball and attempted to predict and forecast what was going to occur in our market throughout the year. It’s a time when likeminded property experts get wobbly knees, as our area of expertise revolves around looking at historical property data as opposed to future forecasting. And, I must say we were again left exposed!
We expected the bushfire events in our region to affect property values in the disaster areas and we predicted the housing market to remain stable on the back of the market peaking towards the end of 2019 in most market segments. On reflection, our forecasts and predictions had logical merit, however, COVID-19 happened and triggered an environment no property market in recent history had faced before.
It was well publicised in the media that property prices would decline over the course of the year, due mainly to the uncertainty of the developing global pandemic of COVID-19. With the market entering unchartered waters, lenders tightened up lending practices and offered loan deferrals to mortgage holders. Market sentiment had drastically changed with buyers and vendors reluctant to commit.
The government played a major role in changing the sentiment of the market, implementing incentive schemes for those who were impacted most with the introduction of JobKeeper, JobSeeker and early access to superannuation funds. These schemes, along with demonstration that COVID-19 could be contained, brought renewed confidence back into our property market.
Our region offers affordability and a lifestyle that neighbouring regions envy. We saw a shift in buyer mentality with evidence that Sydneysiders were moving into our region as businesses offered work from home arrangements. The supply of stock on the market could not keep up with the increased demand levels, resulting in local agents reporting bidding wars and a reduction in the duration of marketing campaigns. This was also evident in the rental market across most segments.
With the increased demand levels, we can report that volumes for valuation instructions from mortgage lenders has risen sharply over this time with strong activity in both the refinancing sector and securing funding for property purchasers. This is something we did not expect at the time COVID-19 came to town.
As at the date of issue, our local property market remains strong with property values likely to exceed our predicted peak of the market in late 2019, however we are unable to confirm this due to a delay in statistical data. Although, we must not get ahead of ourselves here, as there has been a reemergence of COVID-19 in many countries around the world. If our region was to be impacted by a second wave of Coronavirus, it would likely stall markets and depending on its intensity, we may see markets decline given the recent strong price rises in property values.
Tamworth Property Update
The 2020 calendar year has certainly been eventful for the Country Music Capital, so let’s get some perspective on the year that’s been.
Residential and rural residential markets remained steady in the early months of the year, with entry level and first homeowners showing the most activity throughout January and February. Generally, the majority of Tamworth residential market segments saw a slow but steady start to the year with no reductions in property values. The majority of the focus was on DIY renovations rather than new home construction.
The hope for increased market activity within the city was seemingly dashed following widespread travel and economic lockdowns where enforced by the Australian government due to the COVID-19 health crisis. For Tamworth, this impacted retail and small business primarily. Rural markets continued to remain strong (due to prevailing rainfalls and firm commodity prices). COVID-19 caused initial market disruption to residential markets reflected by a pause in sales volumes whilst the market determined its future direction amidst national uncertainty.
Following additional RBA rate cut announcements and government stimulus geared towards first home and new home construction, local residential markets saw increased activity. An increase in vacant land sales throughout the third quarter of the year, partnered by strengthening new home enquiry has seen an increase in building activity within developing residential estates in Tamworth. This has provided significant uplift to the local building industry, resulting in the majority of construction businesses oversubscribed with new business. \
Also apparent in the Tamworth market is strengthening market activity in established suburban residential markets (sale prices from $200,000 through to $500,000). Buyer demand 41 has been largely owner-occupiers with investor enquiry increasing for the entry level ($200,000 to $350,000).
Rural residential property and small acreage and hobby farm style property has seen steady to strengthening market activity. Land area sites of 4,000 square metres to ten hectares are proving to be highly sought after, with proximity to Tamworth centre and elevated views or creek frontage highly regarded. A good example of this strengthening market is the sale of 584 Nundle Road, Piallamore achieving well above market expectation at $1.5 million.
In summary, after a subdued start the Tamworth local residential market is expected to remain steady with the majority of markets experiencing early signs of strengthening. All eyes are now firmly set to the next short-term milestone early in the New Year. Expectations are that extended government economic incentives will play a pivotal role in continuing positive activity and market progression heading into the end of financial year 2021.
Speak with a Tamworth Mortgage Broker today.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.