The month in review: Regional QLD property market updates
By Herron Todd White
Sunshine Coast Property Market
We have all heard the catch cry “location, location, location” when it comes to real estate and typically this brings with it a high price tag. Well this month we look at the champagne locations and see if you can buy on a beer budget.
To get into a property in any of the sought-after locations on a beer budget will take compromise. This typically comes down to size and condition. As a general rule, the smaller the house or unit, and the worse the condition, the more likely it is the price will be lower. Clichés such as worst house in the best street and renovator’s delight all ring true.
When looking at champagne locations, there is no more desirable unit location than Hastings Street at Noosa Heads, particularly for investors. Although you may not be able to purchase a property on Hastings Street on a beer budget, you are able to purchases a one-bedroom investment unit for under $375,000 with access to Hastings Street from within the Virdian Noosa Complex less than 500 metres from Hastings Street. If you want to add a bedroom or two, you just have to climb up Noosa Hill where for around $500,000 you should be able to find something.
Looking to other sections of the coast, namely around Caloundra and Mooloolaba, there are opportunities as well. These spots are close to the beach and in some cases, will provide ocean views. One-bedroom units in both these areas start at around $200,000 and when adding a bedroom you step up to $300,000 and you get an older unit a few street back.
Starting at the southern areas of the coast, the Maroochydore area offers some good opportunities to be located in and around the new town centre. The land sizes are still around the traditional 600 square metres, but the compromise will be on the home. It will be an older style home that will need some work. Price points for these are around the $550,000 level. This is mirrored in the Caloundra and Noosa areas as well with similar lot sizes and house styles. The difference is in the price points. Caloundra is similar to Maroochydore at $550,000 but Noosa steps up to $700,000.
In the rural residential market, there are so many champagne locations, it’s best just to look what you can get. For an acre close to the hinterland township areas west of the highway, you can still get an older home with a shed for around $500,000. When you look east of the highway, they step up to around $600,000. This is still pretty good value given that even when you add water tank and sewerage systems, it would still be at below replacement cost.
To grab a property in a champagne location on beer budget is still possible. You will just have to compromise on the unit or home. It’s a pretty good strategy for future value growth as the land is the constant and, let’s face it, when it comes to land in these areas, they aren’t making any more of it.
Chat with a Smartline Sunshine Coast Mortgage Broker today.
Darling Downs/Toowoomba Property Market
Suburbs encompassing the prestige sector include Middle Ridge, Rangeville, Redwood, Prince Henry Heights, Mount Lofty and the stand out performer, East Toowoomba. These suburbs are located on the eastern escarpment of Toowoomba, enjoying large lots and valley views as well as being within many of Toowoomba’s private school catchment areas. The typical price point for homes in these areas is around $500,000 to $600,000, and for units around $300,000 to $400,000. Below are some examples of these typical price points.
A modern dwelling at 4 Pugh St, Middle Ridge sold for $591,000 in January 2019
A tidy villa at 1/178 Mary St, East Toowoomba sold for $380,000 in October 2018.
Price points for absolute entry level properties in these prestige areas range from about $200,000 to $300,000 for dwellings and $100,000 to $200,000 for units. The biggest compromises with these properties from the typical properties in these suburbs are: location (usually situated on arterial roads or thoroughfares); age of dwelling; and condition of dwelling. The age and condition of a property isn’t a huge compromise when you can renovate and restore the dwelling to a more desirable quality, however location cannot be changed and the difference between a quiet suburban street and a busy thoroughfare is a compromise many buyers are not willing to make.
Below are some examples of entry level properties in these prestige suburbs.
An older style, original condition dwelling at 74 James Street, Rangeville located on a highway sold for $230,000 in September 2018.
A semi-modern, original condition dwelling at 224 Stenner Street, Middle Ridge located on a busy thoroughfare sold for $217,500 in September 2018. (source: realestate.com.au)
Located on a quieter street, however close to the highway, it comprises an older style, original condition unit at 6/5 Murlali Court, East Toowoomba. Sold for $157,500 in July 2018.
An older style, original condition dwelling at 70 North Street, Mount Lofty located on a busy thoroughfare sold for $269,100 in July 2018.
The medium and long-term prospects of buying property of this nature are hard to determine. The Toowoomba market has continued to be multispeed and property specific. The Toowoomba Second Range Crossing will be completed later this year and will reduce the amount of heavy vehicles travelling through the city and should reduce noise and odour issues for properties on or near James Street (Warrego Highway). The market effect will take some time to identify. There has been little consistency and the variations in sale prices and buyer interest make it difficult to establish well performing suburbs and specific property types.
Chat with a Smartline Toowoomba Mortgage Broker today.
Cairns Property Market
Champagne locations in Cairns are not really suburb based but are defined more in terms of their features. Upper end properties are generally located in elevated positions with views, beachfront or canal front locations, inner CBD quality apartment buildings and quality rural residential properties in Redlynch or the Northern Beaches. Another market for champagne properties is Edge Hill/Whitfield.
To purchase a cheap property in these locations requires compromise and as the attractiveness of the area is normally reflected in the underlying land value, the building is normally what you need to compromise on. You will need to look for something that undercapitalises the site or a house or unit that requires renovation or extension. Unfortunately, due to the flat market in Cairns, full renovations tend to add less than they cost, so often you are better buying an already renovated property instead of a renovator’s delight.
There is a real risk that buying something cheap in a good area is really just deferring expenses you will have to incur down the track. Although it may be a stretch, if it is your aim to live in a champagne location, it may be much wiser to purchase a completed project. Many renovators admit that they would never have spent the money they did if they were honest with themselves at the start. Your bank account and you marriage will probably thank you for it.
Chat with a Smartline Cairns Mortgage Broker today.
Rockhampton Property Market
Rockhampton typically has two market sectors where everyone wants to live depending on the buyer’s preference. One buyer profile is seeking to own or surround themselves with grand scale, renovated Queenslander homes. This style of property is limited to the suburb of The Range. The other buyer profile seeks quite the opposite, looking to modern living, often with all the optional extras such as a pool and shed. The location to obtain this style of product is not as restricted and can encompass a number of suburbs including Frenchville, Norman Gardens and even selected areas of park residential areas on the fringe of town including Parkhurst and Rockyview.
Each location has its own unique element which helps to make it into our location, location, location list. The Range has all the charm and appeal of Rockhampton’s rich history as well as elevation and convenience to the CBD and highly regarded schooling. Frenchville and Norman Gardens have well established, leafy neighbourhoods within easy commuting distance of major facilities and Parkhurst and Rockyview have room to move on blocks ranging in size from 1,500 square metres to an acre, with town water available.
Price points vary as much as the suburbs themselves. Absolute entry level into The Range for a dwelling sits at around $200,000. Houses at this price point generally lack any views or elevation however do have the other benefits of the suburb (i.e. the address). Renovation is typically a necessity and over time, the immediate surrounding development will go through the same renovation trend. This is somewhat cheaper than a typical price point in the area which we consider to be anywhere from say $400,000 to $500,000.
North of the river, entry level properties in Frenchville and Norman Gardens are again few and far between at price levels below say $225,000. The product varies somewhat from the Range and will typically be a dated yet functional home. Again, quite a way below the average home in the area around $350,000. The park residential areas of Parkhurst and Rockyview are typically newer areas developed in recent years therefore entry level is much higher at around the mid $400,000s for a 25-year-old brick four-bedroom home on an acre block. The typical home in these park residential areas is typically upwards of $550,000.
From these comparisons, we can easily see there is an affordable entry level into each of the preferred locations of Rockhampton, however obviously compromises will need to be made, whether it be the condition of the home, number of bedrooms (two-bedder verses three-or-four beds), lack of ancillary improvements such as a pool, lack of views or the quality of the immediate neighbours. Typically, given the limited availability of land south of the river, long term most of these compromises are worth considering in the Range. In the north side suburbs, the compromises need to be assessed on a case by case basis depending on the buyer and their intentions, whether they are long or short-term prospects. There is a greater availability of stock on the north side which gives buyers more options to consider in the currently stable market.
Typically, there are some differences between buying a home or an investment in these well regarded localities. An owner-occupier is likely to place more importance on the number of bedrooms or busy road frontage, whereas an investor is likely to be less concerned if the return is at an acceptable level. There are a number of opportunities in the Rockhampton market for future capital gain over the long term and rental price increases in the short term with a tightening rental market being experienced at present. This may counterbalance some of these less attractive features for the investor but may not be practical for an owner-occupier to live with every day.
Gladstone Property Market
One of the most popular and tightly held suburbs in Gladstone is Telina. Much of the suburb borders the botanic gardens and is in close proximity to both the Woolworths Kirkwood and Sun Valley neighbourhood shopping centres. Schools and parks are close by and there is easy access to major transport routes. Entry-level pricing in Telina sits at around the $200,000 mark. Houses at this price point are generally 1980s to 1990s three-bedroom brick homes, or dwellings situated close to or on arterial roads. This is somewhat cheaper than the typical price point in the area which we consider to be anywhere from say $300,000 to $500,000. Other well-established suburbs such as Clinton, New Auckland and Kin Kora also fall into a similar typical price point, however entry level pricing is more in the vicinity of $150,000 to $200,000.
Central suburbs such as South and West Gladstone are always popular due to their proximity to the CBD, shopping, schools and parkland. There are pockets of highly sought after addresses in these locations comprising large, high-quality homes which are almost always elevated and have some sort of view of the harbour or the district. The entry-level price point in these suburbs is around the $150,000 mark. This will get you a circa 1950s dated timber high set home. The highly sought after addresses in these suburbs are typically priced above $400,000. There is plenty of stock in between these ranges, say $200,000 to $400,000. In this price bracket, depending how much you wish to compromise, you can still get a reasonably modern or renovated dwelling with some degree of district or harbour views.
Mackay Property Market
Mackay has many different suburbs to meet all levels of accommodation. While some of these might not be considered champagne, there are definitely beer budget buys to be had.
Some of the more sought after areas in Mackay are located in the modern residential estates, such as Northview Garden, Richmond Hills, Mira Flores and Kerrisdale in the north, as well as Cuttersfield in the south. While prices in these estates can be expensive, there are some cheaper options available.
For example, while Northview Gardens estate comprises large executive style dwellings selling from $500,000 and above, there are scattered smaller dwellings that can be picked up for under $400,000. This will generally get you a smaller three-bedroom, two-bathroom dwelling with limited ancillary improvements. It gets a bit more difficult in the newly developed estates, with building covenants restricting smaller dwellings. However, some of these estates do offer small lot sizes in some sections, allowing purchasers in the $400,000 range to get into these new estates, usually for new smaller dwellings.
The more established suburbs of Mackay, while not classed as champagne, do offer some great buying opportunities on a budget. For example, the median house price in Mackay is around the $340,000 mark. There are many examples of older established dwellings for sale at the low $200,000 mark for those on a budget and able to enter the property market.
Chat with a Smartline Mackay Mortgage Broker today.
Hervey Bay Property Market
Hervey Bay has many appealing locations however the right area will depend on price, buyer expectations and personal preferences. Certainly, property located near the beach is always popular in the suburbs of Pialba, Scarness, Torquay, Point Vernon and Urangan. These suburbs generally have pockets of inferior quality homes scattered throughout, with owner-occupiers looking to renovate older beach shacks or subdivide sites. The transition to more owner-occupiers rather than investors appears to be an ongoing trend. Price points within close proximity to the beach are typically trading between $250,000 and $450,000, which is very affordable in comparison to other beach side locations. Buyers who choose to renovate to a good standard are likely to get their money back if they are looking to sell within a few years and do not over capitalise on the fit out. Gradual capital growth is expected in the short to medium term, given the regional locality and moderate to improving economic activity.
Sale prices within the prestige suburb of Dundowran Beach have risen over the past few years with more transactions now taking place between $550,000 and $750,000. There are still some properties selling between $350,000 and $550,000 which are likely to be older homes that require maintenance.
The demand for Esplanade stock has also improved with some vacant sites selling at $460,000 and above. The majority of homes along the Esplanade are older dwellings with full renovations being a common occurrence and sale prices starting from $500,000 to $600,000 for original stock. Tinana and Oakhurst near Maryborough are some of the more preferred areas for this location, with property selling from $250,000 for a standard brick, three-bedroom home in Tinana and over $300,000 for Oakhurst (rural residential). The Maryborough market is quite flat at the present time which is expected to continue in the short term.
Chat with a Smartline Hervey Bay Mortgage Broker today.
Emerald Property Market
Most of the champagne locations in Emerald are modern owner-occupier estates. The entry level into these areas is a three-bedroom, two-bathroom unit starting at $230,000. These best location areas are mostly under ten years old, have large architecturally designed homes, are owner-occupied, well maintained and presented and usually come with a pool or shed. Scattered throughout these estates are strata titled duplex units. Otherwise to pick up a modern good quality home on a lower budget would mean buying a property in a modern estate but that is flood liable.
Townsville Property Market
Some of Townsville’s most desirable suburbs include those located within close proximity to the City Centre and Strand foreshores. These include the suburbs of North Ward, Belgian Gardens and Castle Hill. Castle Hill is widely regarded as Townsville’s premier address due to its location and elevated views. The median house value in this location is currently around $915,000, with what you get for this money depending on the quality of views. To buy in at an absolute entry level to this location a price of around $400,000 will likely get you a very basic home on a small lot on the lower skirts of Castle Hill with limited views. That is highly dependent on whether you can find something available, as properties in this price range and location are highly sought after.
Belgian Gardens and North Ward are other desirable locations with a current median price of around $450,000 to $500,000 for houses. For this price, you would get a neat, mostly renovated timber framed dwelling on a traditional sized lot. Entry level buy in prices are around $350,000 for something basic requiring extensive renovation works, generally situated on a smaller allotment.
Another option to get into these areas is units. The unit market varies significantly in quality, age and amenities each complex offers with prices starting around $120,000 for older style two-bedroom, one-bathroom units in basic complexes.
The question of whether it is worth buying in at the absolute entry level to these areas is very much relative to the individual buyer. Typically, when the market starts to pulse again, we see price movement in these areas first, which we are already starting to see. Properties at this entry level buy in are likely to require extensive renovation works to bring them to their full potential. When you consider the current median house price in Townsville is around $320,000, you can certainly get a more modern or fully renovated home for the buy in cost in these locations, however these locations provide a great level of amenity which is likely to continue with the stadium currently underway and other projects proposed for the inner city including the Waterfront precinct.
Chat with a Smartline Townsville 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.