By Herron Todd White
Sunshine Coast Property Updates
It’s fair to say that in 2019, the property market on the Sunshine Coast has had a stop – start kind of year. At times, sale volumes have been good with good values being achieved whilst at other times, it slowed down. General value trends have however been decent.
As anticipated, in the first half of 2019 we experienced a slowing in the market on the back of the slowing Sydney and Melbourne markets, the effects of the banking Royal Commission and the lead up to the federal election (May 2019). This uncertainty led to general enquiry falling away which effectively led to a lack of urgency in the market. Buyers were taking a wait and see approach. On the back of this, stock levels increased in some areas as well as the number of days on market. The main buyer segment affected was the investors.
Move forward a few months after the election, and with an election result that was perceived by the market as being favourable, we were off and racing. This injection of confidence led to an instant increase in enquiry. An indication of this anecdotally was that an agent advised that they had four new leads on the Monday after the election on a multimillion dollar property that was contracted the week prior. Then when you combine this with the recently reported market improvements in Sydney and Melbourne and passing effects of the banking Royal Commission, the news got better.
The beachside areas, as always, have been performing well with supply remaining generally tight and values picking up. The coastal strip in the sub-$800,000 price range is expected to continue to be in demand however it is becoming increasingly difficult to find good quality homes under this level. Units in these areas are a little difficult to gauge. The larger permanent occupancy style product has become increasingly popular with empty nesters.
When we turn a little further inland, estates of Aura at Caloundra South and Harmony at Palmview are still generating some good interest but it does appear that this market had slowed a little. It looks like this has mainly been by the investors pulling back a little. This may improve given the aforementioned market improvements in Sydney and Melbourne and passing effects of the banking Royal Commission.
The prestige market has had an uptick also right along the coast with the main focus continuing to be the northern coastal areas surrounding Noosa. Like other areas of the market, we experienced a little flat patch but this has certainly changed with supply being gobbled up and new value levels being hit. On the back of the record house sales in 2018, it is now units turn. A beachfront unit in Hastings Street, Unit 6 Noosa Court, is reportedly under contract for just under $10 million, and this isn’t even the best unit in the complex (exact sale price not revealed). It was listed for $11 million for just less than three months and surpassed the previous record unit price for 2/23 Hastings Street of $8.25 million. At $10 million the Noosa Court sale analyses to $41,666 per square metre making the Noosa Heads beachfront unit market the most expensive in Queensland.
The infrastructure projects underway continue to be a great talking point for the region. The Maroochydore CBD, Sunshine Coast Airport expansion and the Sunshine Coast International Broadband Submarine Cable project are all under construction and all massive for the area. Add to these new projects such as the recent announcement that the Sunshine Coast will get Australia’s first Kelly Slater Wave Company wave pool and the news just keeps getting better. How this is affecting the coast can be seen from the latest population figures where the Sunshine Coast is the fastest growing region in south-east Queensland.
All in all, 2019 has ended pretty well. It is pretty clear that elections, election results and the uncertainty created by them can have a significant impact on the market. 2020 is set down for both local and state elections so we will probably see some slow down and we can deal with that. As long as we don’t see any major shocks to the global economy, we should go pretty well.
Speak with a Sunshine Coast Mortgage Broker today.
Rockhampton Property Updates
Time to reflect on the year that was – already! At the beginning of the year, there was a lot of high anticipation for a buoyant year in the market off the back of the market stabilising throughout 2018 combined with the vast number of infrastructure projects in our midst.
Upon reflection, the market didn’t fully react the way we had anticipated, however there are glimpses of positivity, mostly surfacing in the past two months.
We had predicted the price point sub-$250,000 would start to move as a result of the tightening trend in vacancy rates. In reality, this has not occurred. Whilst these rates have continued to fluctuate between 2.2 percent and 3.3 percent for the course of the year (a balanced market for Rockhampton has historically been between two percent and three percent), the sub $250,000 price bracket has continued to remain fairly flat. Whilst some local banks are reporting a definite increase in first home buyer loan applications, they have their sights set on the $250,000 to $350,000 price point, leaving market conditions in the sub-$250,000 category relatively unchanged from 2018.
At the other end of the scale, the prestige market sector has had a stellar year with a new price ceiling achieved and an unrivalled number of sales in the calendar year, compared to number of sales in previous years.
The Capricorn Coast has performed as expected with a continuation of improved activity and modest price increases for most market sectors. The coastal unit market and vacant land (particularly sloping allotments) remain weak.
Fortunately, we highlighted the risk of a number, if not all, of the planned infrastructure projects being unable to come to fruition as per the planned commencement dates. This has indeed happened. Whilst each project remains in the pipeline, only the northern access corridor and Capricorn Highway duplication have commenced construction. The Rookwood Weir, South Rockhampton Flood Levy and GKI are all yet to get out of the ground.
Something we had not anticipated in the Rockhampton market has been the premium purchasers have been prepared to pay for very well presented, renovated properties. There have been a number of cases across all locations and price points where a well-presented property has generated strong interest in the market, often attracting multiple offers, resulting in a sale price right at the upper end of a supportable market value range.
2020 will be a year to watch our local market closely.
Speak with a Rockhampton Mortgage Broker today.
Gladstone Property Updates
It’s always nice to know you are able to predict the future. I really wish I could do the same with my lotto numbers!
The Gladstone residential market behaved almost identically to the way we predicted at the beginning of 2019.
All market sectors in the Gladstone region have shown some form of recovery across 2019. We have seen value increases as high as 15 percent for different property types. This year we also saw two $1 million plus sales in Gladstone, the first that have occurred in over four years.
Affordability is still the key driver of the market and is bringing newcomers to the region.
Rents continued to rise across 2019 on the back of tightening vacancy rates. The current vacancy rate is approximately 1.8 percent. The last time we saw a rate that low was in mid 2012 at the height of the LNG boom.
The new construction trend has continued albeit slower than we had anticipated. Apart from small lots (sub 500 square metres) there is little developed land available at market attuned prices. A number of developers with significant stocks of 600 to 800 square metre lots have increased their sales rates by combining two lots to form larger allotments that are definitely more attractive to purchasers looking for space for the shed or pool.
Mortgagee in possession activity has continued in 2019, however we have started to see slight declines in the volume of these transactions over the past couple of months.
Bundaberg Property Updates
The Bundaberg residential market has been as predicted – steady as she goes. Whilst sales have been regular, values do not appear to have strengthened in the past year.
Rentals are tightening and it appears that the lower end of the market has a lot of competition with up to ten groups turning up to inspect the open houses. Hopefully this demand will begin putting pressure on the contract prices and we may see an increase in the new year.
Speak with a Bundaberg Mortgage Broker today.
Mackay Property Updates
Wow, I can’t believe we are writing the year that was already and that the year 2020 is just around the corner!! It’s always with a bit of trepidation we write this column, as we get to test our predictions from the start of the year against the events that happened through the year. So here we go. At the start of the year we predicted; “We think the residential market will continue its momentum throughout 2019, following through from 2018. There appears to be no slowdown in employment opportunities related to the resource sector and infrastructure projects throughout Mackay and the adjoining Bowen Basin. These increased employment opportunities, coupled with (relatively speaking) cheaper cost of housing and rentals (compared to boom time levels) have seen many people move to the Mackay region. Notwithstanding any major economic crisis associated with world trade and the market for our most valuable export (metallurgical coal), we think the Mackay residential market will go from strength to strength during 2019 with growth predicted in both rental values and market values.”
So how did we go? Not too bad at all!
Besides a lull in the market just before the federal election, the Mackay market has continued to press ahead throughout 2019. Agents have reported strong demand across all market sectors throughout 2019, with market values rising slightly (between three percent and five percent generally, slightly higher in some areas).
The big mover in 2019 was the rental market. Vacancy rates for residential property remained low right throughout 2019 and have sat below two percent all year. Market rents have also increased during the past 12 to 18 months, between ten percent and 20 percent.
At the start of the year, we stated, “The tightening of the rental market will see increases in weekly rentals, which will have the two-fold effect of:
- Bringing investors back into the Mackay market based on increasing yields and potential for capital growth; and
- Increasing demand for owner occupier purchases as cost of rents increase and become more difficult to secure.”
This prediction was half right. Yields on residential properties have increased as rental value increases have surpassed capital value increases. The tightening of the rental market has also seen the number of tenants leaving to purchase property increase. However, investors have not returned to the market in numbers predicted at the start of the year. This can be possibly attributed to a number of factors, including more difficult lending criteria for investment purchases and costs associated with things such as insurance eroding net yields.
Lastly, we stated at the beginning of the year, “The difficult part is predicting the extent (of price growth). Momentum is a funny thing in real estate. At the moment, there is a definite shift in sentiment, both in the general economy and residential market, with all the momentum on the positive side of the ledger. We are quite optimistic about the year ahead and after the downturn we experienced between 2013 and 2017, that makes a refreshing change!”
We think it is pretty safe to say that 2019 was a good year for the Mackay residential market and general economy. With record low interest rates, increased employment opportunities and continued relative affordability in Mackay, it’s seen as an ideal time to enter the property market. There are still a few hangovers from the downturn that haunt the Mackay market. Firstly, even with increased demand and slight increases in value, the median house price for Mackay is still down around 20 percent than the peak or between $60,000 and $100,000. This equity erosion will limit potential purchasing power and ability to sell for those who bought during the peak times. Also, the lending policies of the banks for our postcode 4740 are still causing some concern.
Speak with a Mackay Mortgage Broker today.
Emerald Property Updates
At the beginning of 2019, we predicted steady growth but cautioned keeping an eye on coal prices. The first half of 2019 was steadier than we were expecting. The election may have had something to do with that as after the election, the market started moving in a positive direction with more turnover and rents increasing.
Coal prices dropped throughout the year and the median sale price fluctuated about three to five percent over the past 12 months to land in a similar position as the start of the year at $310,000. Jobs growth has remained high throughout 2019 and rent is what stood out to have the most growth.
We definitely saw values increase for good quality properties that had multiple potential buyers, with two sales hitting over the $1 million mark. All in all, a slightly steadier year than we anticipated unless you had a property which offered uniqueness or the lot with pool, shed and size, although the second half of the year appeared much stronger than the first. Buyers in general appear to be showing caution in the main with perhaps the last boom still fresh in many minds.
Whitsunday Property Updates
The Whitsundays has just cruised through this year. There has been some movement in the tourist and hotel industry with the Conway Caravan Park, Airlie Beach Hotel and the Coral Sea Resort all being sold.
This year has also seen Daydream Island and Hayman Island back up and running following the aftermath of Tropical Cyclone Debbie and with the completion of expansion of the airport, it is anticipated that this will bring more tourists to the area, which will have the flow on effect of employment and growth for the area.
The residential market for single residential houses just seemed to be steady as she goes. The unit market is yet to find its feet. With high body corporate fees, this sector appears to be struggling in 2019.
Townsville Property Updates
The year started out positively following on from the improved sentiment of late 2018 with the inner city 4810 postcodes and in particular North Ward and Belgian Gardens seeing good levels of interest and activity.
In late January and early February, our city was hit by a massive weather event which is reported to have been the largest rainfall event to have occurred over the Townsville catchment in the past 120 years. As a result, a number of suburbs including Idalia, Rosslea, Hermit Park, Railway Estate and other low-lying areas experienced extensive flooding.
A period of upheaval in the market followed with a reported 3,300 properties damaged. The rental market experienced a significant level of demand from displaced occupants and along with damage to rental stock, resulted in a very tight rental market.
Following this event, property transactions were likely being driven as much by emotional factors as market fundamentals, however as the year panned out, the market has stablished and anecdotally interest and volumes of sales have been positive, however we are yet to see if this is a post flood boost or improving activity levels. To date there have been limited sales of flood affected residential dwellings to clearly define what factor the market has priced in as a result of this event.
Of interest during the second half of the year is that Townsville appears to have attracted the attention of buyer agents and investor strategy groups with a number of sales through these groups having occurred during the year. This is something we have not seen in our local market for many years.
Overall the property market is finishing 2019 on a positive note despite having a period of upheaval following the weather event, with the rental market seeing an easing in vacancy rates as occupants return to their repaired properties and repaired rental stocks coming back to market.
Speak with a Townsville Mortgage Broker today.
Toowoomba/Darling Downs Property Updates
Toowoomba has been fortunate to benefit from major infrastructure projects including the completion of the Toowoomba Second Range Crossing and the imminent Inland Rail project.
As predicted in February, despite these major infrastructure projects, the Toowoomba and surrounding suburbs residential markets have continued to remain relatively stable throughout 2019 following a slowing level of sales activity in 2017 and 2018. This followed the peak experienced throughout 2014 into mid 2015. Although sales activity has been steady across the board, the market has continued to be multi-speed and property specific. There has been little consistency with variations in sale prices and buyer interest making it difficult to establish well performing suburbs and specific property types.
The rental market is in a balanced situation with vacancy rates remaining relatively low.
The infrastructure projects are believed to have assisted in holding vacancy rates low with many employees living in the Toowoomba area throughout the construction processes. As mentioned in February, the key development areas for new housing included the suburbs of Glenvale, Cotswold Hills, Torrington, Kleinton, Highfields, Cambooya and Westbrook. Demand for vacant land has slowed significantly as a result of reduced investor demand and limited local buyer enquiry for lots less than 500 square metres in size. Sales rates for land in new housing estates are slower compared to recent years when projects often sold out off the plan. Developers are starting to look at buyer incentives to attract interest in their respective projects. Unit development has also slowed as evidenced by the Building Approvals graph below:
West of Toowoomba, the towns within the coal seam gas hub of the Surat Basin have reverted to levels which are more aligned with their predominantly rural based economies. As such local employment factors are now contributing to the trends witnessed in each of these towns. Enhanced interest for dwellings is being experienced from owner occupiers as affordability has returned. A significant over supply situation remains in the unit market which continues to place downward pressure on this sector. The Roma market is relatively inactive and downward pressure appears to remain while Dalby is showing good signs of stabilisation with a strong occupancy rate currently being enjoyed leading to positive movement in rental values.
In general, there were no surprises in the Toowoomba market and predictions made at the beginning of the year appear to have been relatively accurate. We give our predictions a score of eight out of ten!
Speak with a Toowoomba 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.