By Herron Todd White
Sunshine Coast Property Update
When looking back on the 2020 Sunshine Coast property market, it is fair to say that it has been a year that has challenged everyone.
The year started much the way 2019 ended with good activity and values increasing in most areas. However, this was all put on hold from late March into April when we experienced the escalation of COVID-19, which in turn led to restrictions on social interaction and ultimately nationwide lockdowns and closure of the state’s borders. As a result, there was a high level of uncertainty within the economy and the property market as a whole for a short period.
In the middle of the year as restrictions started to ease, the number of recorded COVID-19 cases continued to decline and the government rolled out its stimulus packages (JobKeeper and Homebuilder), it appeared there was a considerable resurgence of confidence in the market. Agents reported a high level of interest throughout most areas and in particular, beachside suburbs which have historically been sought after. Extremely low stock levels across all of the Coast’s property markets coupled with all-time low interest rates and economic stimulus packages have seen property values increase, all while a global pandemic is occurring.
One notable shift we have continued to see post the initial lockdowns (that also helped to prove that it can be done) is the ability to work remotely. The momentum this has gathered has been a big positive for the Coast market. A significant part of the feedback is that people are looking to leave capital cities for a better lifestyle. They want to live where they want to live rather than live where they work. Given that working remotely is an option across a range of professions, this has helped open up our market even more.
Another market nuance is that there has been a feeling that people have begun to bring their decisions forward. That is to say that if they were thinking of making the move to the Coast, they have started the process a bit earlier than expected to make it a reality. The low interest rate environment has helped this along.
Looking back at each of the property sectors, the prestige market was one that has outperformed everyone’s expectations with a record number of $4 million plus sales being achieved across the Coast. At the moment in 2020, we are tracking at circa 45 sales or properties that are under contract for the year. Our previous best was in 2018 at 32. This market has been extremely dynamic with a significant portion of sales being achieved off market. An example of the growth and dynamic nature of this market can be seen by the example below. 43 Mossman Court in Noosa Heads was purchased in May 2017 for $5.1 million. In 2019 the property was placed back onto the market for two months with a list price of $6.55 million before being taken
The $25,000 federal government housing grant certainly helped stimulate the market with the demand for vacant land increasing dramatically. We understand that land releases in estates such as Stockland’s Aura and Avid’s Harmony were being sold out in a day or two. This level of activity appears to be more common than not with various agents reporting this to be the case across the Coast.
Hinterland markets are also seeing improvement primarily off the back of historically low stock levels. Areas in the northern hinterland and along the Blackall Range are seeing a mix of buyers seeking a tree change and also weekender style purchasing. Given the apparent urgency in the market, some buyers are missing out and this has led to an increase in properties selling in excess of list price.
This fear of missing out has moved strongly into the virtual inspection space. There have been an increasing number of purchases made via virtual inspection and we are not just talking about modest properties. Multimillion dollar properties are being purchased this way, especially given the border restrictions throughout the year. The unit market has been somewhat similar to that of the housing market in that entry-level properties have tended to perform pretty well. There have been a number of unit complexes under construction throughout the year with the larger owner-occupier market performing best.
Further north, the Gympie region has experienced another good 12 months as affordability drives the demand with a number of coastal buyers making the shift up north. These areas are attracting those looking for larger lots and do give you more bang for your buck.
It is becoming more and more apparent that people just want to be on the Sunshine Coast experiencing all the Coast lifestyle has to offer. Like most things, there will be winners and losers. It would appear the Sunshine Coast property market in 2020 has been one of the big winners.
Rockhampton Property Update
See you later 2020! Who would have predicted that? At the beginning of 2020, market indicators were showing signs of increased positivity and we were of the opinion that we were going to see a continued positive trend throughout 2020. Improving sales activity, firming prices, decreasing days on market, continued low rental vacancy rates and increased project activity in the region all pointed to the continued recovery of the property market. Was our prediction correct? To a degree it was, however we probably thought of a more gradual continuation of the positivity in the market as opposed to the now very buoyant sometimes crazy activity we are currently seeing.
The market as a whole has performed beyond expectations in the Rockhampton and Capricorn sector of the market. All sectors have seen an increase in activity. Although the unit sector may not have seen activity as strong as general housing, it has still shown positive signs. Established housing across most price points has been strong. Land sales have been through the roof, with a number of developments selling out and having holds on stages that will not be ready until early 2021. Due to this, builders and tradies are run off their feet.
The type of buyer driving the market has not been limited to a particular sector. First home buyers, upgraders, downsizers, retirees and investors are all active. Investors are now seeing the benefit of low interest rates, low vacancy rates and upward trend of prices.
Due to the increased demand, agents are finding themselves in the position of having multiple offers, more often than not at list price and sometimes above. Property is selling at the first open house, again often with multiple offers. One of the most surprising things coming out of our ever-buoyant market is the number of houses being sold without making it to market with agents having an extensive list of potential buyers ready and waiting.
2020 – what a year!
Speak with a Rockhampton Mortgage Broker today.
Emerald Property Update
The 2020 residential market in the Central Highlands has remained steady in Emerald, with a slow consistent firming in Blackwater and Moranbah. Rent saw the most gains in 2020. We started the year optimistically and then COVID-19 hit which only slowed things for two months and then away we went again. Our economy was one of the least affected in the country as the resource sector continued to drive strong employment demand. This in turn caused rents to rise to their highest levels in the past eight years with very low vacancy rates. All this has been happening while coal prices have mostly been on a downward trend.
Medium house prices in Emerald have only very slightly firmed in the past 12 months while we have seen up to 20 per cent increases in some areas of Moranbah and Blackwater.
We have been surprised at how strong the employment demand in the resource sector has remained despite lower coal prices. Our market for many decades has followed the coal price so the current situation sees us going completely against the trend but then again, 2020 has been a year like no other.
Speak with an Emerald Mortgage Broker today.
Mackay Property Update
What a crazy and wild year 2020 has turned out to be. In January, we sat down and gave our predictions for the year ahead and I am pretty sure not one person could have predicted the pandemic and its enormous effects around the country and the world. I feel my crystal ball is pretty good, but not that good!
So, what did we say in January? We spoke about the improved economic conditions in Mackay resulting in increased confidence and optimism in the Mackay economy which had resulted in a positive shift in the residential market. The main prediction was….
“So what do we think will happen to residential property in 2020? We think the momentum gained in Mackay over the past two years will continue into 2020. We anticipate modest price growth throughout the year across all market sectors, with rentals to remain tight. With continuing record low interest rates, good employment opportunities and a general feeling of optimism across Mackay, we think 2020 will be a good year for the residential real estate market.”
Even in the midst of the global pandemic, I must say, we got this exactly right! During the first quarter of 2020, the Mackay residential market was steaming along. However, when the pandemic hit and the government announced its restrictions, all bets were off. We wrote at the time of restrictions that we thought the market would just tread water and try to ride out the restrictions and pandemic. It became apparent after the first six weeks that the majority of industries in Mackay, particularly mining, mining services, infrastructure projects and government employment, were virtually unaffected. When some restrictions started to ease, the market didn’t just tread water, it surfed a large wave of optimism that the economy as a whole would recover and prosper sooner than our capital city counterparts.
The last six months of the year have seen buoyant market conditions, with all agents reporting increased buyer enquiry, shorter listing times and multiple offers received on most properties. This has seen an increase in property values (modest growth). With respect to rentals, it appears one effect the pandemic had, along with travel restrictions, was to stimulate population growth in the regions. The Mackay rental market is currently one of the tightest in the state with a vacancy rate of 0.6 per cent and rental values increasing throughout the year.
The other major effect on the market that we didn’t see coming was the government’s building boost stimulus package and the effect it has had in Mackay. Virtually every block in town has sold, with developers scrambling to create more allotments before the grant deadline expires. Local builders have reported an increase in enquiry, with construction planned into 2022.
So that was the year that was, an unprecedented time that I personally hope to never see again in my lifetime! Merry Christmas to all our loyal readers and we look forward to giving our predictions for 2021 in February.
Speak with a Mackay Mortgage Broker today.
Gladstone Property Update
Slow and steady growth was what was predicted for the Gladstone region at the beginning of the year. That’s probably what would have happened had COVID not hit us. I doubt anyone from Herron Todd White predicted that a global pandemic would headline 2020. It would have taken an extremely brave soul to predict probably the opposite to what we were all thinking. Gladstone has had its fair share of doom and gloom and we honestly were not sure where the market would go after it had just seen some signs of life after bottoming in 2017 and 2018.
The market remained fairly stable for the first half of the year and we certainly were not prepared for what happened next. My catchphrase of the year has been “there’s nothing like a global pandemic to kick start the market!” And kick start it, it has! The past five months have seen a flurry of activity and the steady growth that was predicted quickly turned into rapid growth. We have seen evidence of some significant gains in value in the area, with some evidence showing increases of over 20 per cent in just 12 months. (We do highlight that not every property has gone up 20 per cent in 12 months, but the market certainly has risen and is continuing to rise.)
Across the second half of 2020, we have seen the market dynamic shift. Gone are the days of buyers having all the power. Vendors are now in the box seat with many properties selling for very close to, if not over asking price. There is much evidence of multiple offers being made for well sought-after property that is appropriately priced. Days on the market have also significantly reduced. You would be hard pressed to find a property in the region that would take over six months to sell. Typically, anything that has been listed for this long that has not sold is priced above market.
Rents have continued to rise in 2020 on the back of record low vacancy rates. The rate has been sitting at 1.1 per cent since July. Letting agents are reporting that up to 20 applications are being made for each property.
New construction activity has certainly leapt forward since the government stimulus packages were announced. We know of at least two local well known builders who are booked solidly for the next 12 months and continue to turn clients away. This has led to an increase in building activity for builders who are not mainstream or perhaps only build one or two houses a year. The stimulus packages in our region are certainly having the desired effect and are keeping numerous trades employed.
The market over the past few months has certainly had a boom time feel to it. The sheer level of transactions occurring and the increase in pricing was definitely not something we would have predicted at the beginning of the year. It will be interesting to see whether the market activity slows up a bit over the typically quiet months of December and January or whether it just powers ahead.
After the year that was 2020, I certainly will not be making any more bold predictions at this point as it could go any which way. I’ll leave that for our first issue in 2021! Stay safe and see you all in the new year. Regan Aprile Associate Director Bundaberg Taking a look back at the start of the year, we were cautiously optimistic of what might happen in the property market. Then COVID reached pandemic proportions and we all believed we would be twiddling our thumbs for the remainder of the year. The government stepped in with a stimulus package and since then, we have not looked back. We in the property industry have had an extremely busy time since February. Sales of vacant land have been startling in that most vacant blocks have been sold so that owners can take advantage of the generous grant from the government. Sales of established residential product have also peaked with most agents running out of stock. If this continues, we consider that prices would inevitably rise. It appears that demand is across the whole range of property prices. Southern buyers are also beginning to be a presence in the local market with the advent of working from home and in some cases, no need to visit the office.
We are still one of the most affordable places around and proximity to the southern tip of the Great Barrier Reef makes the Bundaberg region one to watch.
Hervey Bay Property Update
The year of 2020 is likely to be remembered by many as one of uncertainty and tumultuous changes. The property market was tipped by many economists to fall considerably, however unwavering resilience has been the result along with continuing market confidence. These unprecedented times have been challenging, with sellers being very cautious in the middle of the year and many withdrawing their homes from sale to ride out the storm. The reduced stock levels coupled with ongoing demand pushed prices higher, which continues today. Demand continues to outstrip supply with some property achieving sale prices at five to ten per cent above what would have been realistic twelve months ago. This rising market makes for very challenging times in the valuation space, as sales evidence struggles to keep pace with contract prices. The federal government Homebuilder Grant has been in high demand with vacant land flying off the shelf and frazzled brokers scrambling to organise finance within tight timeframes.
The Fraser Coast has seen a wide mix of buyers from all over the country with some happy to purchase sight unseen in the mid $800,000s which was relatively unheard of in our regional patch. The rental market remains very tight, with limited supply and slowly appreciating rents. New stock is expected to achieve over $420 per week for a four-bedroom, two-bathroom dwelling, typically yielding five to six per cent (gross). As states across the country continue to open, it is anticipated that this trend to escape to the regions will be ongoing in the short term to a moderate degree, however, is likely to settle down in 2021. It is safe to say we all look forward to a more stable, predictable twelve months ahead.
Speak with a Hervey Bay Mortgage Broker today.
Townsville Property Update
It is fair to say that 2020 in the Townsville residential property market has astounded us. Our thoughts back in January 2020 were that the inner city 4810 postcodes and suburbs located within a five-kilometre radius of the city could likely see some increased levels of activity on the back of the stadium completion with the remaining suburbs to remain somewhat status quo.
The year started out as we had anticipated with positive sentiment and momentum from 2019 carrying through to healthy levels of activity within the suburbs located within an eight-to-ten-kilometre radius of the city. The onset of COVID-19 saw the sales momentum quieten during March and April, however by May, sale volumes had returned to pre- COVID levels and have continued to build throughout 2020. Sales growth has become more widespread, extending into the Upper Ross and Northern Beaches area. Median prices have firmed with inner city values starting to show increases. We are hearing from agents that some properties are receiving multiple offers and this is resulting in prices coming in at the upper end of expectations in some areas.
The vacant land market has also surged on the back of home builder grants, with larger developers pushing forward with new land releases to meet current levels of demand.
The rental market has also tightened significantly, reportedly due to a combination of increased demand and a reduction in supply. Agents are reporting that some owners are selling their investment properties due to the positive market environment, which in turn is affecting supply levels. Coupled with this, we are seeing increased demand as people move to the region to escape the pandemic with improving business confidence and employment opportunities facilitating this change.
Overall, 2020 appears to have accelerated our recovery with current conditions now considered sufficient to move us past the start of recovery for the housing sector and cautiously into a rising market.
Toowoomba & Darling Downs Property Updates
2020 – WOW! What a year! 2020 commenced on a generally stable activity and value platform, although the market was already beginning to show signs of being multispeed and property specific with strong demand and value levels in the upper end of the market. In our February 2020 Month in Review outlining our predictions for the year, we forecast this trend to continue throughout 2020 – and it definitely has!
The local market experienced a sharp reduction in sale volumes in April during the initial COVID-19 lockdown phase, but quickly rebounded with solid sale volumes in May and rising to strong sale volumes from June onwards. Selling agents have been reporting strong buyer demand and limited supply, which in some instances has seen strong sale prices being achieved. In particular, selling agents are reporting strong demand from non-local purchasers looking to relocate to more regional areas within an approximate two-hour commuting distance of Brisbane, such as Toowoomba, Highfields, the Southern Downs region, the Somerset region and the Lockyer Valley. Despite the COVID-19 backdrop, there have been several high value sales for this region and here are just a few examples:
- Address: 19 Kara View Court, Rangeville
- Sale Price: $2.4 million
- Sale Date: 20 Feb 2020
- Address: 56-58 East Street, Redwood
- Sale Price: $1.9 million
- Sale Date: 2 May 2020 Address: 15 St Ives Court, Mount Lofty
- Sale Price: $1.75 million
- Sale Date: 16 Sep 2020 (Agent advised)
- Address: 35 Curtis Street, East Toowoomba
- Sale Price: $1.7 million
- Sale Date: 19 Sep 2020
The old adage of location, location, location has continued to be proven correct throughout 2020 in Toowoomba, with properties in the sought-after eastern suburbs of Toowoomba remaining in high demand. In addition, there has continued to be good demand for contemporary style renovated colonial dwellings in the well-regarded suburb of East Toowoomba. An example of this is illustrated below, with a colonial cottage at the road front and a contemporary style renovation at the rear:
- Address: 38 Eleanor Street, East Toowoomba Sale
- Price: $880,000 Sale Date: 21 July 2020
In our February 2020 Month in Review, we noted that there had been a significant reduction in demand for vacant land and slow sale rates for land in new estates, however, a flow on effect of COVID-19 and the government Home Builder Grant has been a sharp reversal of this trend and very strong demand for vacant land in new estates. There are currently very few vacant lots available for sale which are already developed. Some developers have commenced selling the next stages of their estates off Disclosure Plans to give purchasers the best chance of obtaining the Home Builder Grant, and in some instances these lots are already all under contract. Another sector of the market which has continued to experience strong demand is the rural lifestyle sector, with many properties within a short commuting distance of Toowoomba having sold in the $1 million plus price bracket. An example of this is noted below:
- Address: 2199 Gore Highway, Umbiram
- Sale Price: $1.15 million
- Sale Date: 20 Aug 2020
On reflection, the local property market has rebounded strongly from the impact of COVID-19 and it remains to be seen if this continues in 2021.
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.