By Herron Todd White
February 2020

Lismore/Casino/Kyogle Property Updates

The residential market for the 2020 year ahead in the Lismore, Casino and Kyogle area is likely to experience some improvement, continuing on the heels of the last six months of 2019 when sales activity started to show signs of confidence after six months of subdued activity.

Key factors to potentially influence house prices for 2020 include the projected low interest rate environment which last saw a 0.25 percent cut in October 2019 to an unprecedented low of 0.75 percent Reserve Bank rate, and it appears there possibly may be more cuts! However, it will be interesting to see how lenders react in their lending decisions which ultimately impact the success of most first home buyers and investors. Providing that all the lender’s boxes are ticked, the savvy first home buyer and investor could do quite well this year as banks competitively seek their business.

And yet, we are still stuck with the limited stock available complaint (as oft repeated by local real estate agents). So whilst the low interest rate environment may be considered conducive to an increase in potential property enquiry, if there is no product available, then competition will ultimately rise for what is available and potentially see prices improve.

It is interesting to note that in both Casino and Kyogle, there is very limited supply of vacant residential lots available for sale. This concern has been expressed with the Richmond Valley Council taking the initiative in acquiring one of the very few residential englobo lots available for sale in Casino. The Council has some good form on this initiative, having recently completed the sale of all available vacant residential lot stock in the Settlers Estate on the eastern fringe of Casino. It is expected that due to the limited supply of vacant residential land, demand for such a product is likely to be relatively strong especially since the prices are still considered to be reasonable for flat land..…think sub $150,000.

Lismore City is faring rather better with new residential estates coming to fruition such as Hidden Valley Estate and other planned estates at Eastwood in Goonellabah which has already received positive enquiry with approximately 135 new lots to be created. The market for vacant land has been steady up to this point in the Lismore City area. Level blocks are expected to continue to remain steady, however more steeply sloping blocks requiring significant foundation works and increased construction costs may require some discounting from developers to shift. Prices continue to improve to the point where the vast majority of level blocks are now well in excess of $200,000.

With much of the land in Lismore City becoming available throughout 2020, local builders and project building companies will have plenty on their plates, so much so that we have noted a significant increase in construction costs in 2019 and likely to continue in 2020. However, this does not appear yet to be dissuading owner-occupiers from building.

The demand for rental accommodation in Casino, Kyogle and Lismore City throughout 2020 is likely to remain relatively strong, particularly if first home buyers can not secure finance and therefore need to look for places to rent. Newcomers to the area have also raised the enquiry level for accommodation.

Properties north of $550,000 within Lismore City still appear to be in demand for the well-heeled owner-occupier looking to upgrade. For Casino and Kyogle, residential properties in the $400,000 plus bracket are generally limited in number but tend to sell reasonably swiftly when offered for sale.

In summary, Lismore City is a quiet achiever with Casino and Kyogle holding their own. Their proximity to some of Australia’s best coastline, a strong employment base from the government, education and rural sectors combined with relative affordability is likely to insulate these areas from significant falls that seem to befall larger, metropolitan areas. In a market where the expectation is that improved properties are likely to continue be restricted in supply and coupled with a low interest rate environment, we should see some up-tick in prices across the board. In short, 2020 is expected to be a year of slightly improved growth for Lismore City, Casino and Kyogle, however the rural lifestyle or rural farmlet sector can expect some hurt, especially if the protracted dry conditions continue.

Speak with a Lismore Mortgage Broker today.

Ballina Property Updates

The coastal areas throughout the Ballina Shire saw some modest increase in value levels throughout the second half of 2019 and early indications are that buoyant market conditions are expected to continue in 2020. Local agents report moderate levels of enquiry and low levels of stock, particularly within more sought after locations. An oversupply of vacant land in the Lennox Head and Skennars Head market has been somewhat of a concern over the past few years, however the demand for this product appears to be enough to dismiss any such concerns, at least in the short term. The proximity to Byron Bay and surrounds, coupled with the very limited amount of vacant land available for sale throughout the Byron Shire would also limit any sort of correction should an oversupply occur within this sub-market.

In summary, healthy market conditions are expected to continue throughout the Ballina Shire on the back of low interest rates, with more sought after locations benefiting from the strong markets in Sydney and Melbourne.

Clarence Valley Property Updates

As the festive season nears its end and a sense of normalcy returns to the Clarence Valley, it’s clear that 2020 is set to see a resilient response to and hopefully prompt recovery from recent fire events. Given the devastating and varied effects of this disaster on property as well as the community, it is without a doubt a trying time for many.

With a number of major infrastructure projects including the Harwood Bridge and Pacific Highway upgrade and new Grafton Correctional Centre nearing or predicted to reach completion in 2020, it is likely we will see a general reduction in rental enquiry and return, an element which has played a key role in recent times. However, whilst this is undoubtedly a contributing factor, given recent trends it is unlikely that the greater Yamba, Maclean and Grafton areas will see a sharp decline in market values. That said, there is certainly a sense of stability rather than increase in the air.

It is due to a myriad of reasons, including the region’s comparable affordability, natural features and proximity to considerable infrastructure, that residential market values are expected to remain steady with supply continuing to be dwarfed by high levels of demand for most product types.

Whilst prestige and unique properties may see extending selling periods, almost all property types in the sub $500,000 category look to have a healthy pulse as we welcome 2020.

Coffs Harbour Property Updates

Traditionally the start of the year is always slow, however, we are seeing a somewhat slower start than normal which may be attributed to the devastating fires which have occurred and continue to terrorise New South Wales. Although the worst of it appears to be over in the Coffs Coast region, there is still a hangover effect and rebuild stage taking place within the affected communities with these markets under a watch and see phase.

These markets were relatively complacent prior to the recent bush fire event with little to no discounting for properties that could potentially be affected by fires. However, now a major bushfire event has occurred (and is likely to continue over the rest of this summer), properties impacted by bushfires may experience a period of lower demand, increased sale periods and falls in value. Until such time as a volume of rental and sales evidence of bushfire affected properties does occur, it is difficult to predict the effect on the market and whether any discounting may be required to achieve a sale.

Against the backdrop of all of this devastation, the region is underpinned by its endless lifestyle opportunities and major infrastructure projects in the works especially anticipating the start of the Pacific Highway bypass of Coffs Harbour.

The general feel is that the market should tick along nicely once all have returned from the holiday season. With the record low interest rates driving market confidence, we are noting good levels of property being placed under contract and more notably the $1 million plus beachfront market has recorded several sales over the new year period.

Speak with a Coffs Harbour Mortgage Broker today.

Port Macquarie Property Updates

During 2019, we saw a sluggish start to the year due to various factors including a softening of investor demand in the residential market and uncertainty during the election run-up. The May election with the reinstatement of the Liberal government, three interest rate cuts between June and October and the relaxing of some lending policies saw a steady increase in activity as the weather warmed up. This had the Mid North Coast property market heading into the festive season on somewhat of a high.

With interest rates set to stay at historic lows or decrease further, natural population growth and out of town investors purchasing in the area, we believe that the way we finished 2019 will be the way we start 2020, with continued steady price growth and an increasing number of sales for our area. We do note that approximately 60% of purchasers are from outside of the area.

We believe the best performer for the year ahead will be the established well located areas close to town, beaches and infrastructure. As we have seen for a number of years, some of the older areas are getting a face lift and younger families move into these areas and revitalise them.

Some of the fringe suburbs with large land releases might see more subdued growth as developers continue to release additional land, sales numbers plateau and prices remain stagnant.

Speak with a Port Macquarie Mortgage Broker today.

Central Coast Property Updates

The real estate market of the Central Coast Region of New South Wales enjoyed a good year in 2019 and we don’t expect much changing for year 2020. Of course there are many factors that may change this. The most obvious factor likely to affect the market is the bushfire disaster seen across the state. The Central Coast region has been affected by this, but to a much lower level than other regions. This means we can’t see a direct and significant effect on values and demand in the region.

It remains to be seen this early in the year what operational changes, if any, lenders and insurers will implement as a result of the bushfires, but if changes occur within their respective spaces, there will be an indirect effect on the market.

There is of course, a similar scenario in many parts of the state, and the Central Coast region sits between two markets that have been particularly affected, the Sydney and Newcastle markets.

Historically, the periods following significant events such as the devastating bushfires usually cause some disruption to the market and to a degree we do see this playing out in a period of consolidation – nothing new here.

In Central Coast terms, the market is more likely to experience short term effects by excessive rainfall and flooding as we have seen in the past and if weather predictions prove correct, the region will have a lot of rain soon.

There weren’t any really identifiable standouts across the various market segments in 2019 and this is expected to be the case in 2020. We saw the completion of several residential unit complexes in 2019. Almost all of the individual units within these complexes were sold off the plan from as far back as 2016. As completion drew close and developers starting calling for settlements, we were instructed to provide current valuations for mortgage purposes. In most cases, the values held with some increasing and on the odd occasion, a fall in value was noted. Construction of new residential unit developments waned during the latter part of 2019 and there remains only a few developments still under construction, meaning that the heat of this market segment has eased and this should provide an opportunity for the consolidation of values in both new and older units, the latter of which did suffer slightly due to the preference for new stock.

General housing showed little of the effects of market disruptors seen in other regions during 2019 and from our perspective, it was pretty much a case of the market for established dwellings being steady throughout the year. We don’t see much changing in 2020 for this segment and no locations showing signs of emerging as the place to be.

Last year we offered that the peninsula suburbs of Woy Woy, Umina Beach and Ettalong Beach would see a reduction in values on the back of several extraordinarily strong years of growth. We couldn’t see the rise in values being sustained for long and to a degree, this occurred with some real estate agents referring to 2016 values as the new norm for this part of the region. Once again, we would suggest caution and well founded research when buying in these suburbs.

If pushed to suggest an emerging market, then we suggest a look at the new estates around Berkeley Vale. The land is considered good quality and well priced. As new dwellings are established here, the values both within the estate and adjacent should benefit. Considerable new home building activity remains a staple for the newer suburbs towards the northern end of the region. This includes the suburbs of Hamlyn Terrace and Wadalba. Both suburbs provide well priced land with services close by and handy access to the M1 Motorway. We see a resilience to market pressures in these areas due to the relatively solid levels of affordability.

At an operational level, our interaction with lenders and mortgage brokers increased during 2019. This follows an extended period of limited interaction with the placement of intermediary parties being the link between lenders and service providers. While that link correctly remains present, direct discussion has proven just as successful as lenders seek a more detailed understanding of what’s happening in their local markets to assist in paving their way forward.

As with the last year, there is a reasonably good level of market confidence present, with indications that this confidence will wane slightly in some segments as the year progresses. If previous cycles repeat themselves, we can expect to see a period of reduced buy and sell activity. Obvious determinants of this will include the cost of financing, stock availability and of course, the presence or absence of buyers and sellers. Less obvious at this early stage but perhaps more influencing will be effects of natural disasters and as always, the role of the media.

Also as with 2019, we see 2020 proving to be an interesting one for local real estate following the market peaking in most segments. We say interesting because the traditionally reliable and predictive market indicators have or are likely to be different to those seen in previous, fairly predictive cycles. The activity and rises seen until very recently occurred over an extended and sustained period as opposed to previous cycles.

Southern Highlands Property Updates

Looking forward into a new decade, we expect an overall fairly stable market across the board in the Southern Highlands area. After a fairly slow or poor performing 2019, the market began to improve moving into the summer holiday period, with the majority of local agents reporting good numbers back at open homes as well as improved prices across the board.

In the Wollondilly Shire we are seeing large numbers of new housing estates pop up and construction around the Tahmoor and Thirlmere areas beginning to increase. The main price point to watch is $500,000 to $750,000 as we begin to see the growing south-west corridor of Sydney creep down towards the Wollondilly Shire due to major state infrastructure projects such as Badgerys Creek Airport being well and truly underway. This coupled with Tahmoor Central beginning at a local level could see good growth in 2020. Further south, we expect the Wingecarribee area to continue to remain fairly stable after a period of strong growth through the middle to end of the past decade. Overall we are seeing a large number of the new estates nearing capacity, limiting new detached dwelling growth in the established suburbs. We are likely to see construction begin on several large, medium-density developments in central Bowral which is likely to attract some downsizing locals as well as Sydneysiders wanting to be within close proximity of central Bowral.

At the other end of the scale, with recent bushfire activity having a heavy impact on the northern and southern ends of the Highlands, the townships of Wingello, Penrose, Bundanoon in the south and Balmoral, Buxton, Bargo and Yanderra in the north are areas for concern going forward. The established township of Bundanoon is probably least likely to be impacted, however the remainder of the suburbs mentioned which are surrounded by heavy native bushland and in which many homes have been lost may be hit with some market resistance due to people trading properties for economical and emotional reasons. Overall we would anticipate that this property sector may experience a period of lower demand and greater days on market than previously experienced.

Southern Tablelands Property Updates

As we enter the new decade, residential market fundamentals for the Goulburn area remain stable. Following a year of mostly low declining prices, there appears to be a much more positive outlook for house prices in 2020 with more buyers in the market, plenty of sales occurring and within reasonable selling periods when priced correctly.

We expect the high level of construction activity to endure throughout the year with the Teneriffe and Joseph’s Gate developments now online. We have also noted an increasing duplex market emerging in these new estates, appealing typically to investors which will mostly likely continue in the new year. As at January 2020, realestate.com.au showed approximately 142 vacant land lots listed for sale in Goulburn, 2580. Is supply outweighing demand? This may result in some sites being discounted in order to be competitive and achieve a sale within a reasonable selling period.

The recent bushfire events may impact the market sentiment of the semi-rural suburbs which have been reasonably popular in more recent times. Prior to Christmas, agents were reporting high numbers of enquiries and an increase in volume of transactions of rural lifestyle properties from mostly Sydney buyers. We anticipate that this property sector may experience a period of lower demand, increased sale periods and falls in value, predominantly in the townships heavily affected by the recent bushfires.

Albury/Wodonga Property Updates

This year, with a new decade upon us, we will report on our region as a whole, sometimes breaking it down by suburb or township, while always trying to give the reader an overview of what is happening in our large and diverse property market. Albury- Wodonga has started the year with a semi circle of serious bushfires from north, north-east and south on both sides of the border, with the north-east of Victoria very much in our area and very much affected. The effects of this disaster are many and thankfully many townships were spared, however it will be a long bushfire season and it will take its toll on the entire region. Shorter term recovery efforts will commence and in the longer term the full extent will be evident.

The underlying challenges will also exist for our tourist towns that were evacuated several times (Bright, Corryong, King Valley) and drove visitors away and no doubt local businesses will feel this along with farmers who have suffered loss of stock, infrastructure and income.

No one can predict the future but Australian communities working together in the face of disaster is a sure bet and like many other regions affected, the Albury-Wodonga region will display resilience and strength in 2020. This will likely mean that property markets across the region have a subdued start with less stock available and possibly many participants preoccupied by the effects of the bushfires personally, locally or regionally.

The upshot remains that the region offers many property options for home owners and investors alike. Overall, sales activity in 2019 was lower than 2018 and this trend may continue in 2020. Median property prices across the region have held or increased by around four to five percent. The areas to watch in 2020 are Myrtleford, Wangaratta, Corowa and Mount Beauty/Tawonga/ Tawonga South and Benalla. In Albury-Wodonga, value remains in North Albury, West Albury and Thurgoona.

We are yet to have a smoke free day in the region this year. Let’s hope that when the smoke finally clears, we all appreciate how fortunate we are to have homes in such a terrific part of the country.

Tamworth Property Updates

Water, water, water! This will be the major determining factor over the next 12 months for how the Tamworth market performs. As the drought continues to ravage the state, the government recently announced funding for a new dam to be constructed for Tamworth’s water supply as well as a direct pipeline from existing water sources to the town treatment centre. This has gone a long way in shoring up the town water supply as well as increasing confidence in the town, but as they are yet to be completed we are not out of the woods yet.

Despite the drought, the real estate market in Tamworth has been holding up well, showing that Tamworth is no longer only reliant on the agricultural industry, however it is now clear that a slowdown has occurred with a noticeable increase in days on market. While properties are still achieving fair market value with no drop in values noted, they are certainly taking longer to sell, perhaps a month longer than expected but still below a six month period. We expect this trend to continue throughout 2020 unless we receive some drought-breaking rain which will increase cash flow into the local economy from the surrounding agricultural industry as well as refilling the town water supply.

The extended selling periods currently being experienced may open up opportunities for the astute buyer if the vendor requires a quick sale. We would keep an eye on east, inner north and inner west Tamworth, as these areas can often be tightly held and have experienced good growth in past years. On the construction side of things, the past year saw a decrease in construction with some of the larger local builders reporting up to a 40 percent drop in new homes. This may be more a reflection on how many homes they were doing previously, with smaller builders reporting more work than before. We expect this trend to continue in 2020 with a possible uplift as the new first home owners grant is enacted, requiring first time buyers to have only a five percent deposit and the government guaranteeing the other 15 percent.

Overall we are expecting 2020 to remain stable but slower than the past few years with the continued drought. If we receive the rain we are praying for, we may see an uplift towards the latter half of the year.

Speak with a Tamworth Mortgage Broker today.

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