By Herron Todd White
July 2019

Toowoomba Property Updates

The Toowoomba property market is relatively affordable compared to many locations in Australia, therefore half a million can purchase a wide range of properties. The $500,000 price point comprises many different properties such as renovated older character homes within the established inner suburbs, original and renovated 1970s to 2000s brick homes in many suburbs, new houses in developing areas, and homes on larger acreage lots in close-by neighbouring suburbs.

With this month’s focus on the $500,000 price point, we have provided recent examples of property sales in this segment.

Below is a sale of a typical, brick circa 2000s home in the established area of Middle Ridge. This property sold for $510,000 and comprises a four-bedroom, two-bathroom dwelling with double garage.

As an investor, you could typically get $400 to $500 rent per week.

An alternative for buyers seeking larger lots is represented by the sale of a modern three-bedroom, two-bathroom dwelling in the satellite suburb of Top Camp for $491,000. This property features a 3,684 square metre lot, playground and cubby house.

As an investor, you could typically get $400 to $500 rent per week.

For those seeking older style character homes, this property in East Toowoomba sold for $500,000 and comprises a renovated four-bedroom, two-bathroom dwelling with an extended deck.

As an investor, you could typically get $400 to $500 rent per week.

Comparing these sales to sales of 12 months ago, half a million in the rural residential and renovated, older homes market is still getting you a similar quality dwelling. However, the market seems to have moved upwards in Middle Ridge and similar suburbs with $500,000 getting you an older, brick dwelling in original condition.

See below sale in Middle Ridge 12 months ago.

The $500,000 price point in Toowoomba and surrounding areas is well above the median house price which is around the $390,000 mark. Therefore, there are many areas across the region where homes can be secured at this price. Areas which may generate superior capital growth or resale appeal are likely to be concentrated in the eastern suburbs including Mount Lofty, East Toowoomba, Rangeville and Middle Ridge.

It is also possible to secure two dwellings at this price point in Toowoomba. Some older style detached dwellings (two to three bedrooms, one bathroom) in the western suburbs including Harristown, Newtown and Wilsonton are selling for between $200,000 and $300,000 and can provide strong rental returns. Two older style or even semi-modern strata units can easily be purchased for under or up to $500,000, reflecting the affordability of the Toowoomba residential market.

Speak with a Toowoomba Mortgage Broker today.

Sunshine Coast Property Updates

In the past, we have suggested that the best place to park your lazy $500,000 is in an older original dwelling along the coastal strip, basically, as close to the beach as you can. This certainly would have paid off as it’s now difficult to enter this market at this level, although not impossible. There are still some beachside localities that provide this opportunity. Once again, given the coastal lifestyle which is not going out of fashion any time soon, go for it.

These areas include Golden Beach, Battery Hill and some parts of Kawana to the south and to the north, Pacific Paradise, Marcoola, Mount Coolum and the back of Coolum Beach. These are probably the only areas in which you may find a freestanding dwelling for around $500,000.

For investors, units in these beachside localities also provide good opportunities for under $500,000 with locations around Noosa Heads, Coolum Beach, Mooloolaba and Caloundra all providing good access to tourist amenities and good rental returns at this level. It has continued to be the smaller complexes with lower body corporate fees which have been the best performing.

One market that is still offering value for money which we touched on last year is the hinterland townships along the rail corridors, from Glass House Mountains and Beerwah in the south through to Palmwoods, Yandina and Eumundi in the north. These towns have seen some good growth over the past 24 months with a number of new subdivisions offering larger allotments with the ability to put a house and land package together for under $500,000.

Entry level rural residential in the southern hinterland areas and along the Blackall Range on land sizes of between 2,000 and 20,000 square metres still offer very good value for money. In most cases, you have the ability to purchase at well below replacement cost and in turn get a lot of bang for your buck.

As we touched on last year, with the larger estates of Aura in Caloundra West and Harmony at Palmviews there are options of smaller lot sizes with some as small as 67 square metres which has helped this lower end of the market to easily find a property for under $500,000. It is expected the supply of these modern small lot developments is likely to continue as more land is developed and we think the high levels of supply may limit growth in the future.

The diversity of the property mix on the coast and hinterland provides a number of opportunities for owner-occupiers and investors. It is difficult to identify one location, however being as close to the beach can be a good start, although I would not discount the larger lots in the hinterland given the ability to purchase below replacement cost.

Speak with a Sunshine Coast Mortgage Broker today.

Cairns Property Updates

$500,000 in Cairns is above the median house price and well above the median unit price so with that amount of money in your back pocket you should have a reasonably pleasant house hunting experience, although it is the bottom end of the range for a house in one of the better-regarded suburbs close to town.

The first decision to make will be what is most important – the location or the house? In the southern corridor for example, $500,000 will buy a very nice modern home of good size in an average location. In Edge Hill or Whitfield it will buy a nice block of land with a house in need of fairly significant renovation. Closer to the city in Parramatta Park or Cairns North, it will buy a reasonably nice Queenslander. On the Northern Beaches, it will buy a nice home in a newish subdivision or an older home in an older established area closer to the beach. There always seems to be a trade-off around this price point.

$500,000 is generally not first home buyer territory in Cairns so you will be competing with others who probably have a bit of equity and know what they are looking for. You will be priced out of the rural residential market and most CBD apartments with views that are large enough to live in.

Speak with a Cairns Mortgage Broker today.

Rockhampton Property Updates

This month we take a look at what you can get for a lazy half million. Upon reflection from this time last year, we are happy to report our position on the property clock has improved slightly, rising from the bottom of the market to a position now considered to be in the recovery stage, albeit very slow. This view has been formed after seeing a tightening of the vacancy rates, improved rental returns and apparent air of confidence after an election result which has seen the national spotlight shine on Central Queensland, much warmer and brighter than it has been for quite some time.

For purchasers looking to spend $500,000 in the Rockhampton region, there are a number of options. Modern homes in North Rockhampton, predominantly Parkhurst, Frenchville and Norman Gardens, will provide the option of purchasing an established four-bedroom, two-bathroom dwelling with double garage in a well-regarded locality.

Alternatively, in our sought-after localities south of the river, a Queenslander, typically in neat, updated condition, with or without views can be purchased in the areas of Allenstown, Wandal or the Range.

Each of these options are generally sought by owner-occupiers, typically second or subsequent homeowners looking to upgrade before the local market starts to see an improvement in prices.

Investors on the other hand, have more options available to them for the use of their $500,000. Whilst they could seek a return on something like the above, returns would be considered quite low (in the order of four to five per cent). Perhaps purchasing two cheaper properties in our investor pockets in the older, established and centrally located suburbs would provide a greater return on investment. These property types include anything from an aged Queenslander, to ex Queensland Housing Commission stock to 1970s high set homes.

The Rockhampton unit market is generally fairly thinly traded, however, $500,000 could see you purchase an established two or three bedroom riverfront unit depending on the aspect, size and level.

Sets of flats remain a constantly sought after option for investors. Currently, $500,000 is likely to buy a set of up to five flats. With recent sales of flats showing gross returns ranging in the order of seven to 10 per cent, this is a high yielding option under current market conditions although growth potential can vary greatly depending on the age, condition and location of the property.

The short to medium term performance of Rockhampton and the region overall is generally considered to be a period of stabilisation. Capital growth is not expected to be huge but returns should remain fairly solid in the interim with vacancy rates showing a tightening trend, currently below three per cent in most sectors of the market.

Buyers at this price point should be reasonably comfortable investing in the current market, where prices seem to have been stabilising over recent months and there are a number of infrastructure projects in the pipeline for the region, including the Bruce Highway upgrade throughout the Parkhurst and Rockyview region (currently under construction), proposed Rookwood Weir, Capricorn Highway duplication and the Rockhampton Ring Road projects to name a few.

Speak with a Rockhampton Mortgage Broker today.

Gladstone Property Updates

Several options are available for those with a cool $500,000 to park in the Gladstone property market.

An option for investors who are willing to wait until market conditions improve is to pick up a handful of older style two-bedroom units or townhouses around the city fringe. There have been multiple transactions of this type of property in the past year, with values mostly sub-$100,000 and showing gross returns of approximately four to seven per cent. More modern three-bedroom, two-bathroom townhouses are fetching between $150,000 and $200,000.

For owner-occupiers, locations such as Boyne Island and Tannum Sands have the added lifestyle appeal due to their close proximity to the beach and the Boyne River. In these suburbs, $500,000 is generally able to purchase a large, well-established dwelling on a moderately sized block which may even benefit from river or sea views. Although dwellings at this price point are typically older and perhaps slightly more dated than dwellings at this price point elsewhere, the added benefit of being within close proximity to the beach and the Boyne River compensates for this.

There are also properties located within various established suburbs of Gladstone itself or even some of the outer rural residential areas which are certainly able to command this sort of money. Dwellings in these areas are typically generous in size (above 180 square metres of living), well-appointed and often include a shed or pool and sit on large allotments.

Bundaberg Property Updates

The options for a lazy half million are endless in this very affordable part of the country where the turtles come home to nest. If it’s rural residential that floats your boat (unlike the recent sinking of the HMAS Tobruk LSH 50) then a mid-1990s home in the Tantitha estate consisting of five bedrooms, two bathrooms, with a pool and a four-car detached garage would fit the bill. There is also a two-bedroom granny flat at the rear of the 5,100 square metre allotment.

If it’s an investment property that you would like to drink to (with a Bundaberg Rum obviously) then you could buy two renovated circa 1950s timber weatherboard homes of three bedrooms and one bathroom in some of the older suburbs such as Bundaberg South or Walkervale.

If it’s a slightly more modern home that you are after, you could purchase two 1980s original brick homes with three bedrooms and one bathroom.

You could also purchase two units circa 2005, both being two bedroom and one bathroom with a built-in garage for the lazy half a million.

Passing the Bundaberg Brewed Drinks factory, home of the world-famous Bundaberg Ginger Beer, you can drive the 13 kilometres to Bargara and purchase a brand new contemporary style four-bedroom, two-bathroom home with a two-car built-in garage.

Also on the coast, you could fly down to Elliot Heads, like an aviation pioneer, our very own Bert Hinkler, and purchase a mid-2000s esplanade front home of four bedrooms, two bathrooms and two-car built-in garage and a pool with excellent ocean views for $470,000.

All in all, the Bundaberg region is a very affordable option to purchase for investment or to live in.

Speak with a Bundaberg Mortgage Broker today.

Mackay Property Updates

This month, we take a look at what a “lazy half million” might get you in Mackay and reflect on where we have come from 12 months ago.

Last year and the few years before that we wrote :

“For $500,000, you are looking at a large executive style rendered dwelling around ten years old or newer with shed and pool in the northern beaches, still with some change to be had for the back pocket. In the better quality estates in the north, you can now get good quality brand new dwellings from most of the builders in Mackay for under the $500,000 mark. In the traditional older suburbs south of Mackay, there have been very few sales of older style Queenslanders over the $500,000 mark. You can get a fully renovated large Queenslander for this price. It feels a bit like Ground Hog Day writing this article. The residential market in terms of value has not seen any material increases over the past 12 months. The biggest difference with spending the lazy half million in the current market is that you have to act twice as quickly on a lower level of available stock to secure a property before it sells from under you! The past 12 months has seen increased buyer activity with greater demand and shortening time on market.”

Well, I know how Bill Murray feels, but it’s still Ground Hog Day in the Mackay area. The residential market continues to bubble along, with good momentum on the back of increased employment opportunities in the resource sector, large infrastructure projects and general optimism in the Mackay economy. One blip was the recent federal election, where local agents reported a slowdown in the market for the month leading in, waiting to see which party was elected and possible taxation issues on the property that would arise. Now that the dust has settled, agents report increased interest again. Yesterday, we also heard that the Adani Carmichael mine cleared another hurdle which will add further confidence to the resource sector and associated service industries in Mackay.

Last year we wrote:

“For investors, anecdotal evidence from agents indicates that rental vacancies are starting to tighten and in some cases, rental values have increased slightly. For an investor with half a million, there have been recent sales of duplex and small flat buildings. There have been buildings containing four or five flats selling under $500,000 with gross yields between eight and nine per cent. Older style duplex properties have been selling between $250,000 and $300,000 on gross yields around the seven per cent mark. This still holds true in Mackay, with one small exception. Over the past 18 months, rental vacancy rates have tightened significantly and currently sit around the three per cent mark with rental values starting to increase.”

Well, it’s been a big 12 months in the rental market. Vacancies have tightened even further, to fall below two per cent with rental values increasing significantly over this period, between $30 and $60 per week. A recent report by ANZ and CoreLogic listed Mackay as a regional city that is actually cheaper to buy than to rent!

We also stated:

“It is considered to be an ideal time to invest in Mackay. Values are currently at levels not seen in almost 13 years. Optimism is returning to the mining industry on the back of increased prices for coking coal and flow on effects to the resource sector including increased employment opportunities, not only in mining but in large infrastructure projects currently underway including the $500 million Mackay Ring Road project and the new sports precinct project.”

This statement is considered to remain relevant. With the potential for capital growth, it is still considered a great time to invest in Mackay, with good yields currently available on dwellings and units. A flow on effect is that we are already witnessing tenants who are missing properties or not willing to pay the higher rents starting to enter the market as owner-occupiers. This should see the momentum over the past two years continue into the short-term future.

Speak with a Mackay Mortgage Broker today.

Hervey Bay Property Updates

A lazy $500,000 can buy a diverse range of property on the Fraser Coast, depending on individual preferences, purpose and strategies. Sale prices of vacant land along the Hervey Bay Esplanade have improved over the past few years with sites now selling for just over $500,000 for 1,000 square metres offering restricted ocean views and an easterly aspect. Older renovated homes located within a few streets of the Esplanade have started to show increased demand, with some selling for just over $500,000, however there is still adequate supply below this price point.

Duplexes continue to provide a steady rental return at six to seven per cent gross for the investor. A popular choice for older residents is the generic circa 1990s on ground, two-bedroom, one-bathroom unit which typically sell for around $220,000, so a lazy $500,000 could scoop up two of these quite comfortably. More modern townhouse type units built circa 2007 providing three-bedroom, two-bathroom accommodation can be purchased for between $260,000 and $320,000. Rental vacancy rates have been consistently low for a while now, which has put some pressure on rents with a slight increase for most property types. Demand continues to be steady for rental stock which looks set to continue in the short to medium term.

The property market in Maryborough remains very affordable compared to Hervey Bay. Gross rental yields in Maryborough have been typically ranging between seven and ten per cent, with blocks of flats selling for well under $500,000. It would also be possible to buy two renovated Queenslanders in this location and still have change left over. Capital growth is considered to be a lot slower in this location however for an investor looking for a steady return this area is definitely worth a look.

Speak with a Hervey Bay Mortgage Broker today.

Emerald Property Updates

The market continues to slightly firm in Emerald, particularly for higher quality properties above $500,000. You can still purchase two good quality strata titled units for $500,000 but the housing standard for this price has lifted. The bottom bar has now lifted for modern, large, good quality homes in good locations on lot sizes from 700 to 1,100 square metres where $500,000 would now be between the bottom end and middle of the range depending on what ancillary improvements are in place. Rental on these properties starts at $400 per week and as high as $550 per week. With anything on acreage selling below this price point, it would have to provide below average standard of accommodation.

Whitsunday Property Updates

When looking at purchasing in the Whitsundays, $500,000.00 opens up a number of options for investors and owner-occupiers.

An owner-occupier or investor could purchase a modern four-bedroom dwelling with a pool or a shed in the suburbs of Cannonvale or Jubilee Pocket and would look at a rental return from $480 up to $550 per week. Month in Review July 2019 53

You are also able to secure yourself a rural residential lifestyle property located just on the outskirts. These are mainly slightly older dwellings located on one to two hectare lots and usually have a shed or a pool.

Within Airlie Beach, you can purchase a three-bedroom unit with views. Any investor in this market is usually looking to holiday let for the higher return. You might be able to secure yourself an older dwelling but it would need work for this price in Airlie Beach.

On Hamilton Island, you are looking at a unit within the Whitsunday Apartment complex. These are one bedroom with views over Catseye Bay. These units can be owner-occupied or holiday rentals.

The Whitsunday market is holding firm at this stage with most real estate agents advising low tenancy vacancy rates.

There have been no massive gains over the past 12 months and it appears to be holding steady.

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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.