By Herron Todd White
Lismore/Casino/Kyogle Property Update
“In our dreams, and our minds continually do this, we create and perceive our worlds simultaneously so well that we don’t even know it is happening. And it is at this point where we attempt to interject between these realities to influence the result”.
If you think the movie Inception was a mind-bending experience, well, this whole COVID-19 nightmare over the past nine months is both unsettling and alarming. From hard to soft and back to hard state borders, social distancing, business closures and JobKeeper and JobSeeker confusion, one would not be remiss in thinking that this would play havoc with the upcoming spring property market.
Well, the property market has, in part, shown some signs of exhaustion with the COVID-19 saga, particularly for large metro localities… but for some reason, regional based areas have proven rather resilient during this time.
Spring is traditionally a time of increased real estate activity and the Lismore, Casino and Kyogle area is generally no exception. Even in the midst of the early stages of the COVID-19 narrative, a general quietness descended upon the area like a mist for a few months rather than a depression in the property market. Fewer sales were happening and less listings were being secured, but there was no wholesale, cataclysmic fall in sale prices (as some commentators had ventured).
And yet, as we enter the spring market, already we are hearing rumblings of there being an increase in buyer enquiry. Coupled with a scarcity in listings (which is currently being experienced by real estate agencies in the region), the demand for residential stock has been improving and has resulted in some relatively short selling periods once a good quality dwelling or unit has been advertised for sale. Let’s face it, at record low interest rate levels, for anyone who has ticked all the boxes with their preferred lender, has reasonably secure employment and the necessary deposit, what a time to enter the property market as a first home buyer, investor or even an upgrader! And it has been seen across the board. Houses in the $250,000 to $350,000 are becoming increasingly scarce within Lismore City and even the more well established homes in the $450,000 plus price bracket in Goonellabah and Lismore Heights are spending as much time on the market as a tempting full bowl of dog food to a Great Dane!
For example, 8 Andrews Crescent, Goonellabah, a large, circa 1980s, six-bedroom, two-bathroom, double garage home, sold within 21 days for $455,000 after being listed at $465,000. Well located rural residential property within a 10-to-15-kilometre radius of Casino, Kyogle and Lismore are also receiving keen interest. Possibly, one segment of the property market that is not as resilient as the rest are the more remote rural lifestyle properties; if the advertised asking price is just a little too strong, then they tend to hang around.
To sum up, trying to ascertain where the market is heading this spring and within a COVID-19 context, we must be aware that there will be micro markets, i.e. markets within markets, and some may do better, some may do worse. The trick is trying to decipher and understand which is which and within this confusing COVID-19 storyline, unfortunately there is a sense of a few more twists and turns and chapters to run before the end.
As one apt recent movie quote uttered, “Don’t try to understand it. Feel it.” (Tenet).
Speak with a Lismore Mortgage Broker today.
Byron Bay Property Update
The Byron Shire with its flagship centre of Byron Bay has been well supported by both local and absentee buyers for most of the year to date.
Apart from a hiatus in March and April when the market took a breather while both buyers and sellers tried to digest the impact of COVID-19 and what it might mean to our lives, the residential market has since moved onwards and upwards. The current momentum looks like it won’t slow down either as we move from winter to spring. Sales activity has been most buoyant in the coastal locations of Byron Bay itself as well as Suffolk Park, Brunswick Heads and to a lesser extent, Ocean Shores. Bangalow and Mullumbimby and their surrounding rural residential localities haven’t missed out either with selling agents in most of these locations reporting relatively low levels of stock coupled with good demand from buyers. Many properties’ selling periods are currently measured in days rather than weeks or months.
Entry level prices vary from location to location. Mullumbimby and Bangalow require an investment of $700,000 to $900,000 respectively for an entry level house, while Ocean Shores could sneak a buyer in for the mid $600,000s. Brunswick Heads, Suffolk Park and Byron Bay offer slim pickings for houses under $1 million.
There is no denying that the market is currently being driven by buyers from outside the region, many of whom are making the choice to relocate due to the perception that the region is a healthier and safer place to be during this and any future crisis. It is ironic that for years, regionally based local governments and businesses have been spruiking the benefits of decentralisation and now, to some extent at least, their wish has come true, albeit arising from a very unusual set of circumstances.
So, where to from here? On paper at least, the market should continue to perform well given the foundations laid down in recent months, however, there are a few dark clouds on the horizon. Of greatest concern is that travel restrictions from Victoria and Queensland will mean that many buyers from these two states will only be able to purchase sight unseen, and if doing so, will be relying on the say-so of locally based friends, family or buyer’s agents. But let’s face it, a prudent buyer will not risk $50 on a pair of shoes without trying them on, so who would spend $1 million plus on a property without a prior inspection? Without buyers from these states, the market may lose some of its steam.
Secondly, the economy is currently awash with government stimulus which will eventually peter out. There’s only so much JobKeeper money available, only so much superannuation money to draw down on and only a limited time in which mortgage payments can be deferred. Some economists and commentators are predicting a slowing of the economy as stimulus measures are wound back.
So, buckle up. It’s going to be an interesting few months.
Ballina Property Update
The impact of the COVID-19 virus is yet to be fully realised by the local market, however it is having a major impact on local businesses in the areas of Lennox Head, Ballina and surrounds. Discussions with local agents indicate an increase in interest in listed properties along with a decrease in vendors placing properties on the market in these uncertain times. The North Coast of New South Wales has seen very little infections from the testing, with the majority of the infections recorded in the Byron Bay locality. There is major interest by 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.
As yet we are still in a fairly strong market with some recent sales in Lennox Head, Ballina and surrounding areas making good prices. Sales of vacant land in Epiq and surrounding areas has stabilised with some local builders indicating that land owners are postponing building till the economy stabilises. The building industry has also been impacted due to the significant number of trades living in the Queensland area not being able to travel to the Mid North Coast for work.
The 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 demand resulting from these capital city markets has typically been concentrated in the more desirable areas of Byron Bay and the surrounding localities, in more recent times 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.
Clarence Valley Property Update
The Clarence Valley comprises both tourist dominated beach localities and more remote and rural localities. Consequently, prime beach locations such as Yamba, Wooli and Minnie Water often see an incline in buyer demand during holiday season and particularly the warmer months. However, this surge in interest is not always met with an equal level of supply, a point that is likely to be exacerbated given the current global climate. Agents are reporting limited stock, reduced selling periods and even multiple offers at or near asking prices, so whilst transaction numbers remain down, there appears to be buyer interest to support more positive market movement over the short term at least.
On the other hand, the Queensland border closure is likely to see a momentary slow down as in Yamba particularly, Queensland buyers make up a notable portion.
More positively, across the Valley general buyer confidence seems to be going through a restorative process. With few cases of COVID-19 reported and the wide geographical spread of the region, there is a sense of protection and normal life continues to prevail.
Coffs Harbour Property Update
Spring is nearing and it is time to throw off the blankets of winter and start preparing for the long awaited warmer months. Traditionally, the market slows in winter which is true of the Coffs Coast. Generally we see a reduced number of listings and weaker buyer demand during these cooler months. This year seems to have been no exception for sellers, however buyer demand is up which has caused a supply and demand imbalance. This is good news for sellers as prices being achieved are regularly at asking price and more often reaching values above asking price, which is a reflection of the strong demand. This poses the question of why there is such demand. There is never one answer for supply and demand factors, however demand is being fuelled by the COVID-19 pandemic. Selling agents are reporting strong enquiry rates from southern city dwellers in the greater Sydney and Melbourne markets which is a direct effect of the COVID-19 environment in which we now live. The ability or should I say the willingness of employers to allow their staff to work from home is a key driving factor. The work force can now diversify into other locations and anyone who was thinking about a lifestyle move is definitely now motivated to do so. This extra demand on property over the winter months coupled with reduced stock and the continuing low interest rate climate has seen very strong prices being achieved.
The other key factor which has to be considered is the government stimulus packages, especially the renovation and building grant. As the new building subsidy is for property up to $750,000 this price bracket falls nicely within the Coffs Harbour value range. Selling agents are reporting very strong demand for vacant land with very little developed land left for sale and limited stock available in the short term, whilst several estates are in the process of being developed. This demand has seen prices rise by up to 10 per cent in the last month for available stock. The flip side to this is that local builders are extremely busy and we are seeing building prices rise in accordance with this demand and of course, the government subsidy.
The rural residential market has experienced very strong demand from out of town buyers looking to escape the pandemic, especially in the prestige market. There have been several sales of properties in excess of $1 million which were on the market for some time but have now been snapped up. The rural township of Bellingen which traditionally is very popular with greater Sydney area buyers has seen increased activity and a severe shortage of supply in this rural residential sector.
What we are experiencing is the realisation of an adapting society where the work base is decentralising and the wiliness or motivation to relocate for a better lifestyle is now more achievable than ever which sees the Coffs Coast as a prime location given the affordability factor and continuing growth in this low interest rate climate.
Central Coast Region Property Update
The New South Wales Central Coast region sits midway between the Sydney and Newcastle and Hunter Regions, both of which are very busy, high volume markets in their own rights. This places the Central Coast region in a somewhat unique position to capture property buyers who want to exit the Sydney market, or those wanting to exit but finding Newcastle a little too far away.
Also worth mentioning here is that the Central Coast Region is equally popular as a holiday home or weekender location for not only those based in Sydney but from other parts of the state and importantly, the retiree market. In years gone by, the Central Coast region exploited these market segments, but with the improved transport corridors now available, the region has become more appealing to first homebuyers and this is where we are at now.
This background is good information to have and we now link this to this month’s subject of seasonality.
Being a coastal location, real estate activity increases in the summer months. The beginning of spring marks a higher level of market activity. Traditionally, many agents step up their marketing strategies with some holding spring sales themed marketing campaigns – it’s nothing new in the world of marketing, but it has a history of working well on the coast.
Records indicate that typically, local market activity increases during the warmer months, but this year has been anything but typical. Backed by research, real estate agents report that since COVID-19 restrictions were introduced, property sales have been above average.
Almost all real estate agents feared drops in activity between dramatic to minor as a result of COVID-19, but most report their surprise that activity actually increased. This aspect has yet to be verified by our data source, but we tend to agree with them at this time.
The main difference reported was that with the restrictions in place, they were essentially seeing less visitors to open homes, but the visitors seen were serious and ready buyers. Furthermore, at a deeper level, we can generally see the ebbs and flows of activity across different market segments during the seasons – think beach and lakeside properties for instance, versus other property types, but almost all segments have been busy this year and this confirms what real estate agents are reporting. Drawing on this, we have looked at why this is happening and find that sale contracts indicate a higher than usual number of purchasers are coming from the Sydney market. When we put this observation to several of the more prominent real estate agents in the region, it was confirmed that this is the case.
It seems that property owners are favouring the New South Wales Central Coast region as not only an affordable alternative to the Sydney market, but relative to the COVID-19 situation, a safer place to be.
In monitoring real estate activity across the region, we again discussed what is happening with several real estate agents. In terms of this month’s spring selling season, most are reporting that listings have been consistent and most are reporting short selling periods. Lower stock levels are their main concern with the focus firmly on building the number of listings. This rings true to us, because we are seeing more sales data with limited meaningful background information provided. This means that real estate agents are selling to their own databases without the need for a normal marketing campaign.
This all leads us to believe that in the current climate of uncertainty, restrictions and government stimulus measures, we will see a lot less obvious spring themed sale campaigns as more sales will be effected off market from the databases of real estate agents.
Tamworth Property Update
The end of winter in the New England and North West brings a welcome feeling of anticipation and hope. While 2020 has provided many challenges to individuals in both Australia and around the world, our region is embracing a ray of positivity and possibility.
Since 2017, the area has battled a nasty drought of proportions not seen for generations. On top on this, the region encountered bushfires and then COVID-19 reared its ugly head. However, 2020 has also brought beautiful, soaking rains to the region and many areas now enjoy the prospect of having the best spring break in years and renewed vigour in the regional economy. At the time of writing, Tamworth’s main water supply, Chaffey Dam, is at 25.4 per cent and rising following good recent rainfall. Many dams are full, creeks and rivers are again flowing, wattle is in full bloom and it seems that the local property market is set to reap the benefits of this change in tide.
Agents in many of the region’s larger centres, including Tamworth, are still reporting a lack of available stock to meet market demand. Anecdotal evidence says this is largely being driven by investors, city-based buyers seeking a lifestyle change, first home buyers capitalising on appealing government incentives and local buyers working in essential services who’ve maintained full employment throughout the COVID-19 crisis.
Spring is usually an active time for the property market in our region. While there are wider challenges in the economy, low interest rates and recent rains continue to drive opportunity for our region. The lack of available stock is holding property prices up in our region with good demand for dwellings in the sub $450,000 investor market.
Demand for owner-occupier stock remains buoyant and an example of this is the demand for $650,000 to $850,000 priced properties in appealing family suburbs in close proximity to town, including Moore Creek. According to local agents, recent buyers of these properties have sought modern residential dwellings with appealing ancillary improvements (workshop, detached studio, pool etc) with the opportunity to garden, grow food and for children to play in the serenity of a private, yet friendly neighbourhood.
Anecdotal evidence is still showing fewer highvalue properties listed on the market. Many owner-occupiers have continued to bunker down through the COVID-19 pandemic (or they may simply be content with their quality lifestyle in a wonderful regional location). Whether or not the region’s spring selling season entices vendors to capitalise on tight supplies remains to be seen.
Further out of town, there is a sense that the better seasonal conditions may encourage more listings of larger rural lifestyle properties (20 to 100 hectares) onto the market with vendors capitalising on green grass and buyers seeking rural lifestyle retreat properties within 20 minutes of the larger regional centres. There is still good demand for these assets.
At the time of writing, the New England and North West (excluding Newcastle and Lower Hunter) has no active COVID-19 cases according the New South Wales Health. While local businesses begin to wake from their winter slumber and a winter of COVID-19 impacted trading, spring is bringing renewed optimism to our region and the region’s farming community is overjoyed by the possibility of experiencing the best spring in years.
Speak with a Tamworth Mortgage Broker today.
Albury Property Update
On 8 July, New South Wales closed its border with Victoria in response to the serious and deteriorating COVID-19 situation in Melbourne and parts of regional Victoria. As a thriving border city, Albury-Wodonga was immediately impacted as residents from both sides of the border were now part of a border zone with various restrictions and permits required for travel to and from Victoria.
Running alongside this disruption, which would see stage 3 restrictions re-introduced in Wodonga, the region received very good rainfall and the criteria for the Australian HomeBuilder Grant and the First Home Owner Grant in both states placed Albury-Wodonga in a good position to take advantage of the incentives despite all the turmoil of the border closure. The property market has experienced strong market activity in vacant land sales from those with the intent to construct new homes within the time frame to qualify for the HomeBuilder grant and first home owners also able to apply for the First Home Owner Grant, so a potential $35,000 in New South Wales or $45,000 in Victoria if the purchaser ticks all the boxes. It looks likely we will see a shortage in land availability and a large supply of four-bedroom, two-bathroom homes across all suburbs in Albury and Wodonga. We have observed similar trends in Wangaratta, Corowa, Yarrawonga and Mulwala. The existing property market appears to be holding despite the pandemic with agents reporting good interest across all segments of the market and a lack of supply being the only real issue.
Like the rest of the nation, we are ready for winter to be over and more ready for restrictions to ease, so the prospect of warmer weather and the spring property market upon us will be a welcome distraction. The region looks terrific, green and spruced up from all the home improvements keeping the population busy over one or two periods of restrictions. The confidence in the market is linked to affordability and opportunity and the way we work in the future will benefit regional property markets. We are already seeing relocation from the major metro cities. The wholesale working from home requirement has allowed employees and employers alike to rethink where they live and why they need to live in a particular location.
Of course the flip side is that the pandemic continues to create uncertainty, which may continue to limit supply as people decide not to list this spring, however there may be an equal number of vendors deciding to get on with selling whilst our local economy remains stable ahead of harder times in the future when stimulus packages are reduced or removed. That said, our region may prosper still from a predicted boom in local tourism and migration from the major cities. We continue to seek innovation in the property industry and more broadly across all industries and communities and as such, the value and purpose of bricks and mortar continue to be redefined and possibly re-purposed as well.
Shepparton Property Update
The local market is coming out of the dormancy of the double whammy of both COVID-19 and winter and it is the strongest it has been in memory (aside from the boom of the early 2000s with 105 per cent loans on offer). A number of agents are reporting that listings are very scarce and overall the number of sales is down, but buyers are abundant and ready to go, creating strong competition for vendors who take the plunge and put their home on the market during the current economic climate. We are also seeing a flurry of owner-occupiers looking to relocate from major cities as they can now work remotely.
Winter had a rush of activity with the federal government’s Builder Boost which saw in the vicinity of 180 blocks of land sold in a six to eight week period, when the usual is around ten to 15 a month. This will inject a huge amount of money into the local building economy for the next 12-18 months.
A few small developers have tried their hand at selling spec homes and have had some good results. This home (pictured) was sold for $465,000 without landscaping after being advertised online and was snapped up in a week. It’s close to the hospital and overlooks a park.
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.