By Herron Todd White
June 2020

Sunshine Coast Property Update

COVID update: When we try to break down the COVID-19 world and market place, the overarching theme is that we appear to be in a in a state of flux. As we moved further down the line through April and into May (about eight weeks), stock levels continued to remain extremely low with no significant increase in property listings. Pressure on owners to sell remains limited but this may be delayed until the various support and stimulus packages come to an end (government’s Job Keeper allowance and bank mortgage holidays).

When reviewing valuations of sales completed by our office and specifically properties contracted during April and into May, in excess of 95 per cent of the sales show a discount of five per cent or less from the list price. Also, 98 per cent of the sales occurred within 90 days. As previously stated, it remains extremely important to understand the circumstances of any sales that transact in this period.

As COVID-19 infection rate results improve and the restrictions start to ease, there is a feeling that there is some light at the end of the tunnel. Subsequently there have been reports that overall enquiry has increased and open homes are resuming.

  • Some of the demand has been in the pipeline for some time from a combination of potential purchasers who were in the market prior to the restrictions and upgraders and investors who sold in the first quarter of 2020.
  • Interest continues to flow with both capital city and ex-pat international purchasers looking to secure property on the Sunshine Coast. Some of this is being fast tracked.
  • Should this demand be absorbed and if there is an increase in supply in the coming months, it will be interesting to see if there is an increase in new demand to fill the void.
  • Some new purchasers are wanting to find a bargain, although this is not apparent in the market to date, especially in highly sought after areas.

Now, on to renovation.

They say “idle hands are the devil’s tools”, but when the pubs and clubs are shut, there are not too many other options. It appears they pick up a shovel, hammer or a paint brush. During the COVID-19 restrictions, it seems that one valuable commodity has been created….TIME. At the moment, there is plenty going on in the home improvement and maintenance space.

As we have previously mentioned, stock levels are extremely low. With the combination of these stock levels and the uncertainty of the market, the thought of selling and upgrading the house has slowly been losing some of its appetite, especially if you really like the area you live in. The feedback from local tradies, hardware shops and garden centres is that business has been pretty good as people look to upgrade their existing property. We have also received feedback that a local swimming pool building franchise has 21 new projects halfway through the month of May compared to seven for all of April. This appears to be occurring right throughout all the established areas of the coast, with older homes being transformed to little gems.

Sure, some of this home improvement activity has been completed to add value to the home so that when they do go to sell, it is presented in the best possible condition. If the property has a reasonable floor plan, the recent results of these renovated properties have shown good returns. We note that some feedback from agents is that a number of builders have been looking for some little side projects just in case there is a bit of a slowdown in the future.

Speak with a Sunshine Coast Mortgage Broker today.

Rockhampton Property Update

Monthly COVID-19 update: Over the past month, residential property in the Rockhampton region (including the Capricorn Coast) has continued to tick over, with properties still being listed and sold despite the global pandemic. There has been no evidence to date of a decline in values, in fact, some sectors of the market are continuing to improve slightly (i.e. modern, well-presented homes on the Capricorn Coast). Regionally, we have been fortunate to continue with a very small number of COVID-19 cases which, combined with the recent easing of restrictions, is likely to support this trend to continue should the number of cases remain low in our region.

Now, let’s talk renovations.

Over the past 12 to 18 months in particular, there has been a notable increase in renovation projects in a small sector of the Rockhampton market. Generally, small pockets of South Rockhampton, such as The Range, Allenstown and Wandal are sought after for their proximity to the CBD, schooling, hospitals and elevation available in some areas to provide city views to the east or vast hinterland views to the west. However, given that the south side is characterised by Queenslander style homes and there is no room for growth or expansion due to the area being surrounded by flood plains, renovation presents the only option for those in the market wanting both southside convenience and contemporary living.

In the balance of the market, renovation activity is generally holding steady, with some basic dwellings receiving a renovation to then be on-sold. This has started to occur after a period of very limited renovation in the low to middle sections of the market and this change is considered to be a combination of low interest rates, a preference by first home buyers to want properties with nothing left to do and a consistent, moderate upturn in the local economy.

Whilst the majority of the renovations seen are by long term owner-occupiers entering into a major renovation to create their forever home, there are a number of investors picking themselves up a bargain and completing a simple renovation (i.e. no structural changes) to then resell with the intent of turning a profit in a market which is starting to recover from an extended period of no capital growth. There has been a number of sales evidenced over recent months where a building company has purchased a rundown property in an average suburb, renovated, professionally styled the home and resold at an expected profit with a short turn around. Styling and presentation is a key factor linked to the level of profit made. First home buyers still prefer new homes, however there are some who end up buying these more affordable, renovated existing homes with nothing left to be done.

Buy in price points for renovators vary greatly. From sub-$200,000 for the investor-renovator through to $600,000 for the long term owner-occupierrenovator. End values then vary just as much. The added market value of basic renovations tends to match cost and when the market is starting to recover, a small profit may be had. When a major renovation is undertaken however, it is a very different outcome. There is little to no evidence that the added value of the renovation will match or exceed the cost to construct. This is where it is important to be aware of the market in which you are renovating to determine where renovation dollars are best spent. Is it wise to make structural changes to the home or stick to cosmetic works only? A dwelling with a poor layout would benefit from a structural change to rectify, however if the existing layout is functional, that money may be better directed elsewhere. Being aware of town planning is also important when planning a renovation, particularly in older areas where perhaps a heritage overlay or neighbourhood character overlay is required to be complied with.

For Rockhampton in particular, the renovator market is likely to continue the current trend as factors that drive the decision to renovate are considered a constant in the local market.

Speak with a Rockhampton Mortgage Broker today.

Gladstone Property Update

There is nothing new to report on COVID-19’s impact on Gladstone’s property market. It’s just about business as usual for our market. Sales continue to tick over with no evidence of any further declines in value. Rental vacancies remain tight with a vacancy rate of 1.6%, the lowest they have been since the peak of the market. Affordability is still the key driver in our market and while we are not out of the woods just yet, it’s looking more and more likely that COVID-19 will be remembered as just a very minor blip on the radar for Gladstone’s residential market.

In terms of renovations, there has really been very limited activity in the past 12 months, apart from every man and his dog doing minor maintenance or landscaping work during lockdown! The reason for the lack of renovation work is really unknown. Despite the market looking up, a significant portion of homeowners in Gladstone would have negative equity in their homes from the market downturn, so in essence cannot afford to renovate. We’ve seen the odd, full internal renovation, in most cases of a mortgagee sale property that is in a state of disrepair and that sold towards the bottom of the market range. Completing only minor cosmetic works to these types of properties adds considerable value to the property. While not quite considered a renovation, construction of new sheds on existing properties has surged over the past several months. The reasoning behind this sudden increase in sheds being built is also unknown. Interestingly, the size of the sheds is also increasing. Once upon a time, a six metre by six metre shed in the back yard was the norm, however this is no longer the case. Longer and wider sheds with higher clearance are becoming the norm along with features such as mezzanines and internal bathrooms. We have also noticed a distinct uplift in pricing for sheds in the region. Costs appear to have jumped about $100 per square metre in the past few months and this sudden jump in cost has not yet been reciprocated in the added value of a shed to a property.

Emerald Property Update

Most towns on the Central Highlands appear to be going back to normal trade apart from Moranbah which continued to strengthen throughout COVID-19. We have seen a pick up in activity over the past two weeks in both sales and rentals.

Renovations is a good thing for most towns on the Central Highlands with costs able to be recovered in most situations.We are seeing most mortgagee homes and lower end properties being purchased and shortly after being renovated. With a rising market we see renovators cashing in on true added value to their properties. Builders are probably evenly split currently between new homes and renovations in the area. We have now had four years of steady growth coming off a bottom in 2016, so there are many with equity to undertake improvements to their properties and we see this continuing.

Speak with an Emerald Mortgage Broker today.

Bundaberg Property Update

COVID-19 Update: The past few months have shown little evidence of declines in values in the Bundaberg region. Properties are still being listed and sold and being refinanced. This is due mainly to the limited number of COVID-19 cases in the region and hopefully with the recent easing of restrictions, this confidence should remain.

We are very much like the Hervey Bay market when it comes to renovations. Bundaberg renovations have actively slowed over the past few months as consumers appear to be conserving their dollars. Judging by the local Bunnings carpark, locals seem to be doing odd maintenance jobs around the house and yard instead of major renovations. Local builders have reported that the demand for new owner-occupier homes remains consistent.


Agents reported a slight decrease in sale volumes towards the start of COVID-19 restrictions, however as the government slowly starts to lift restrictions, volumes are slowly starting to improve. New listings and property values appear to have held steady with no material change in market value.The Mackay rental market was already tight prior to the pandemic with vacancy levels under two per cent, however agents have reported increased interest, particularly from fly in fly out workers who have been unable to travel due to restrictions and will be further hampered by the effects of Virgin’s possible closure.

We have not seen any indication to suggest that renovations have changed during lockdown. We consider renovations to have remained steady and are still predominantly occurring in inner city locations (Mackay, East, West and South Mackay). They are generally of older style, low set or high set dwellings purchased for less than $300,000. There are a mix of owner-occupiers and investors looking to renovate, however the investor types tend to be tradespeople who can undertake much of the work themselves and flip them straight away.

Depending on the size of the dwelling and the degree of ancillary improvements, they are worth between $350,000 and $550,000 on completion. Smaller dwellings on smaller than average lots with basic ancillary improvements are worth between $350,000 and $400,000.Larger dwellings with significant ancillary improvements and over 700 square metre allotments are worth anywhere between $450,000 and $550,000.

Speak with a Bundaberg Mortgage Broker today.

Hervey Bay Property Updates

The Fraser Coast has slowly started to come alive again since the lifting of the first stage of restrictions, with day trips now permitted to Fraser Island. Small cafes have reopened at this stage, with some larger establishments only offering take away meals and bottle shop drive through service. Some retail outlets which appear to be doing quite well in these tough times include the local fishing supply store, office supplies and printer refills due to so many working from home. Queensland Health reports that the Wide Bay had a total of 24 cases of COVID-19 with 24 now recovered and no active cases, which is very encouraging for the region. We look forward to stage two in June when caravan parks and camping will be permitted once more. The supply of housing stock on the market has dropped considerably, however demand remains steady with some contracts considered to be at the upper end of market parameters. The vacancy rate for rentals remains low with rents stable. Property values are also stable, with no noted change across any price point.

Renovations have slowed over the past few months on the Fraser Coast as consumers appear to be conserving their dollars and energy. Local builders have reported that the demand for new owneroccupier homes remains consistent with locals providing enough work for the rest of the year. Work in the construction industry has continued throughout the crisis which has been sobering for regional employment.

Speak with a Hervey Bay Mortgage Broker today.

Townsville Property Update

Anecdotal evidence suggests that the supply of new stock being brought to market remains low as potential sellers hold off listing properties in the current environment.We are continuing to see sales occur, albeit at lower volumes compared to pre-COVID-19 and to date value levels appear to be holding.

Over the past 12 months there has been a noticeable increase in the number of house flippers in the market, typically operating within the five to eight kilometre radius of the city centre in suburbs such as Railway Estate, Currajong and Gulliver. The buy in price for homes with renovation potential in these areas is typically in the low $200,000s with end values created in the high $200,000s to mid $300,000s depending on the extent and quality of the works undertaken.

The rise in popularity of lifestyle home renovation shows such as House Rules and The Block are also contributing to the increase in renovation projects being undertaken by home owners. The reason behind this increase could be contributed in part to the change-over cost from their current home to an upgraded property.Furthermore, location seems to be a factor in the decision to renovate.Owners not wanting to take a gamble on location by moving are opting to stay where they are and renovate to accommodate their changing circumstances.Apart from upgrades to kitchens and bathrooms, we are seeing decks and outdoor living spaces added and house extensions to create more living space and utility.

The renovator market is likely to continue tracking on its current course during 2020 with the cost of borrowing remaining low and a preference from buyers at this time for renovated properties requiring little work with the age old saying of “I’d rather be opening a can of beer (or bottle of wine), than a can of paint” ringing true.

Speak with a Townsville Mortgage Broker today.

Whitsunday Property Update

The Whitsundays are starting to reopen with cafes and some tours now operating within the government restrictions. Cafes and restaurants are still providing take away services. People are out and about enjoying the lightening of the restrictions.

Local agents confirm we are not seeing any reductions in sale values, however volumes of sales are lower than what was previously occurring prior to the pandemic.

Renovations in the Whitsundays! While I have not seen any contracts for renovations and or additions over the last couple of months, it must be happening as Bunnings appears to be the best shop in the Whitsundays! The car park appears to be busy all weekend. While we had to all stay at home it appears that the DIY home owners have been hard at work!

We need to get our tourists back. Let’s hope that we can track on a positive note with limited to no cases new cases of COVID-19.

Darling Downs Property Update

COVID monthly update

Market activity has slowed significantly over the past six to eight weeks as a result of COVID-19. Many vendors withdrew their properties from the market during the initial shut down period and many selling agents are now reporting having limited stock on the market. Selling agents are also reporting that genuine buyers are still active in the market (ie. those who had sold just prior to the COVID-19 shutdowns and need to buy elsewhere or government employees relocating) and cash buyers are beginning to emerge, seeking the opportunity for a good buy.

The restriction on open homes for several weeks resulted in selling agents receiving genuine buyer enquiry rather than sticky-beakers. Open homes have re-commenced in the past week and agents are reporting moderate attendance so far.

In the broader Darling Downs region, property managers are still reporting good demand for rental properties. There is limited short-term rental accommodation homes in this region and accordingly, it has been somewhat insulated from an influx of short-term letting properties such as those listed on AirBNB coming back on to the longterm rental market.

Commentary has been made by both CoreLogic and representatives regarding the potential for increased demand for properties within a two hour radius of capital cities after COVID-19, due to buyers seeking a lifestyle change to less crowded regional areas and with new work from home routines having been established. This applies to many areas within the Darling Downs region and is cause for optimism in our area.

Renovate your way out

There has been a significant growth in property owners undertaking extensive renovation projects in recent years, possibly driven by television shows such as The Block. In the Darling Downs region, this is particularly evident in the city of Toowoomba. The well regarded and sought after suburb of East Toowoomba has seen a significant amount of home-owner renovations in recent times. A majority of properties in East Toowoomba are older, character timber dwellings and there has been a noticeable increase in the number of these properties being brought back to life. Some note-worthy renovations for this locality have maintained the original cottage style façade but have been extended to the rear with two level, contemporary style additions.

There have only been a few renovations carried out in this style so far in East Toowoomba and they have generally been completed by owners of local, custom building groups as their own personal residence and then on-sold. Therefore, it is difficult to comment on the profitability of carrying out such an extensive renovation. In many cases, this has created a great deal of interest in those particular builders and resulted in additional renovation projects for them to complete for paying customers.

Well-renovated character dwellings in East Toowoomba are generally in the $750,000 plus price bracket, depending on the size and features of the dwelling, ancillary improvements such as pools and particularly the land size. Renovation costs are currently quite high and in many cases, the cost of completing an extensive renovation is not reflected as added value on a dollar for dollar basis.

Nearby suburbs such as Mount Lofty and North Toowoomba are also seeing some renovation of older timber homes, but to a lesser extent than that of East Toowoomba. There is significantly less home renovation being carried out in the lower price brackets and in other suburbs across Toowoomba. We also note that there is limited renovation activity in our regional areas such as Warwick, Stanthorpe, Gatton, Kingaroy and Dalby.

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