By Herron Todd White
Sunshine Coast Property Update
The spring selling season in the property market is promoted as the best time to sell your home. This is a viewpoint that has been inherited from the southern markets of Melbourne and Sydney. You can understand why, given that they begin to defrost after suffering through another winter where the weather is less than ideal. Given its perfect weather all year round on the coast, it’s not necessary.
The Sunshine Coast is one of the fastest growing regions in the country. With the infrastructure, climate and lifestyle on offer, people just want to be here, so it doesn’t feel like there are any periods that are significantly busier than any other. After the post-Christmas and New Year slowdown, activity tends to remain fairly consistent from mid- February right up to December.
To say it has been a weird year is an understatement. The escalation of COVID-19 with the restrictions on social interaction, community lockdowns and the closure of the state borders all led to significant uncertainty in the market. Typically, events like the COVID-19 global pandemic would have serious impacts on the property market, however this is simply not the case. With Queensland being on the forefront of containing the spread of the virus, agents confirm that the market remains strong.
As we have previously mentioned, the new world of being able to work more remotely is likely to increase in the future. The new International Broadband Submarine Cable and the expansion of the Sunshine Coast airport may make this region even more attractive and has in effect opened our markets up further. This and people who have thought about moving to the coast and finally making the call has led to these strong levels of demand.
The lack of supply has become an issue generally throughout the market but especially for properties within sought after precincts. Low supply combined with high levels of demand has led to upward pressure on values.
An example of this is a property in Parkedge Road, Sunshine Beach which was purchased in May 2020 for $1.75 million and was resold in July 2020 for $2,145,436. Then when you look at the other end of the spectrum, a property in the Aura estate at Caloundra was constructed mid 2019 at a cost of circa $495,000 and has just sold to an owner-occupier for $550,000. At present, it is not uncommon to sell above list price.
The question around the spring selling season is whether we will see an increased level of supply. From discussions with agency heads from up and down the coast, there are no indications that stock levels will increase above the current low levels. Subsequently we are seeing a significant number of off market transactions. The very nature of off market transactions is that to encourage vendors to sell, a purchaser will have to pay a premium. The level of off market activity is a further indication of the strength and value increases being experienced at present. The question is whether these market conditions will continue. There is no doubt that there are some clouds on the horizon. What will happen after JobKeeper? How long will the borders remain shut? Can the outbreaks in Victoria and New South Wales be controlled? Will there be a second wave in Queensland? All questions that remain unanswered.
The one thing that is certain is that there will be areas that are winners and losers. It would appear that, at the moment, the Sunshine Coast has got its head in front. The sustainability of this remains unknown.
Rockhampton Property Update
To date in 2020, activity has been tracking well across most market sectors in the region. COVID-19 has had no negative impact on the market thus far. At the end of 2019, we had expected 2020 to be a year of modest growth and this expectation has been met (if not exceeded) despite a short period of uncertainty in April. We have seen a transition to a seller’s market with limited stock available in selected sectors and some properties which have been listed for quite some time now selling at or near their list prices as they are now reflecting value for money.
Spring has arrived early in Central Queensland with warmer days already here. There has historically been an increase in activity in spring and summer and 2020 is not expected to be any different. Rather than a springtime rebound however, we expect more of a continuation of the moderate price growth and selling activity that has been building throughout the year.
There are a number of sectors performing well in the region. New construction activity is definitely improving, therefore the vacant land market (particularly level and easy to build on lots) has been performing well, with a focus in some estates on first home buyers. There has also been an increase in the number of sloping allotments selling on the Capricorn Coast. This sector has been weak for a number of years previously.
Also performing well has been the mid to upper level of the market. Properties around the $600,000 price point have been selling well. smaller number of sales however it is important to note this is due mainly to the limited supply rather than limited demand. At the opposite end of the scale, we are finally seeing the lower entry level housing (out of flood) starting to transact with investor enquiry on the improve.
Should Central Queensland’s COVID-19 situation remain largely unchanged, the expectation is that spring 2020 will be a highlight of the year for the Rockhampton region as there are a number of infrastructure projects either mid construction or ready to begin. This, together with record low interest rates, affordability and the nature of our local industries (health, mining, education and agriculture) being able to continue in the face of COVID-19 are what is driving the market at this point in time.
Speak with a Rockhampton Mortgage Broker today.
Emerald Property Update
Activity has remained consistent throughout the year with very little effect from COVID-19. Prices are continuing to firm sharply in Moranbah and softly in Emerald and Blackwater. Vacancy rates are below two per cent and rents have continued to firm in all places.
We see spring as the determining period for the track we take over the next 12 months. Coal prices are currently very low and mining companies are currently in talks about budgets and what the next 12 months entails. The outcomes will be known over the next four to six weeks.
Currently the price range above $450,000 is performing well, with an oversupply of stock in the $300,000 to $400,000 range. We see spring at best having the same volumes as the previous nine months with no spike in activity and a premium paid for modern and good quality properties.
Speak with an Emerald Mortgage Broker today.
Mackay Property Update
As reported in earlier editions, the main employment and economic industries in Mackay are mining, mining services, government and infrastructure, all of which were declared essential services and have been pretty much unaffected by the COVID-19 restrictions put in place earlier this year.
What the restrictions did early in the year was to put a pause on an already improving residential market, however after about the first six weeks, it became apparent that the effects to the Mackay economy were not going to be as significant as other areas and the momentum seen prior to the pandemic started again. The main difference was that nervous sellers were holding off listing, resulting in a shortage of available stock to meet the demand. It was common to see homes selling in well under four-week marketing campaigns with multiple offers presented and this characteristic is still present. On top of this, the rental market also began to tighten as people moved back to Mackay for employment. This saw increased pressure on rents which have been rising over the past three to six months. Vacancy rates currently sit well below two per cent and with a shortage of available rental properties there will continue to be pressure on the rental market.
The big mover (in terms of volumes) has definitely been vacant land and new home construction. The recent government stimulus measures of $25,000 for construction of new homes, plus first home buyer grants and state government grants of $10,000 have really done their job, with vacant land selling at an incredible rate (comparatively speaking) and local builders reporting huge demand for new home construction. Any trip to the multiple display villages across various estates and seeing the carparks full and people everywhere is testament to this increased enquiry. The upcoming construction boom will also have a positive effect on employment in Mackay.
All in all, the market in Mackay is well positioned to continue this positive momentum to the end of the year. The historic low interest rates, good employment across the Mackay region, a shortage of available stock and general optimism that the Mackay economy will continue to power through the pandemic are all positive features, however, there are a few small red flags to keep an eye on.
Firstly, the pandemic is not over, and should it make its way to Mackay or into the Bowen Basin mines, resulting in quarantines and possible shutdowns, it could have a significant short-term effect.
The $500 million Mackay Ring Road project is nearing completion, with the employment relating to this project also decreasing. We do then swing into the Walkerston bypass, plus the northern access upgrade to the Bruce Highway is underway to offset this. Also, the price of metallurgical coal is low and with a rising Australian dollar, this may put pressure on big miners to cut some costs.
Speak with a Mackay Mortgage Broker today.
Gladstone Property Update
As reported in earlier editions of the Month in Review, the effects of COVID-19 have really kickstarted activity in the market again and it appears as though the spring selling season may have sprung early this year!
All the fundamentals are in place for a bumper spring selling season this year with demand starting to outstrip supply, current vacancy rate of only 1.1 per cent, rising rents, record low interest rates and the new building boost grants. We are starting to see more and more multiple offers being made for properties with the end sale price often being above the asking price. Again, for good quality stock, the number of days on the market has also drastically reduced with many selling in a matter of days or weeks, not months.
The only thing we potentially see slowing the sales rate down over the next few months before Christmas would be the lack of available stock, which essentially benefits the market anyway as values will continue to rise as demand outweighs supply. We have already seen good evidence of this in 2020 and predict further growth over the short to medium term.
Hervey Bay Property Update
Spring has traditionally been an active time for the Fraser Coast market with an influx of southern travellers escaping the cold winter to enjoy our sunny beachside climate along with the annual migration of whales resting in the waters of Hervey Bay. This year has posed a challenge for agents with many non-local buyers not able to visit or even personally inspect properties
Agents are currently reporting limited stock across most asset classes. This is a result of vendors not listing, thinking the market is in decline due to COVID-19 which is not the case. Since the recent announcement of the HomeBuilder grant by the federal government, vacant land supply across Hervey Bay has been rapidly declining to a point where most lots that can be developed and titled this year have sold. Builders are reporting good forward contracts, however, have some concern about meeting government deadlines with the amount of construction planned over the next 12 months. With declining stock and strong demand, we may begin to see capital growth over the short to medium term.
Overall, the Hervey Bay property market is improving and on an upward trend. There continues to be strong demand for property priced below $400,000 which includes established housing and house and land packages within some estates. Buyer demand is improving for higher priced property up to $700,000 either close to the Esplanade or in elevated locations. These properties are however expected to offer larger homes with extensive ancillary improvements or views. The buyer pool for the top end of the market over $700,000 is also improving which is encouraging for the region with some Esplanade properties being demolished and rebuilt with large, contemporary homes.
Vacancy rates for investment property are very low which is starting to lead to a gradual increase in rental returns with gross yields typically above five per cent per annum gross.
Speak with a Hervey Bay Mortgage Broker today.
Townsville Property Update
The residential market continues to see strong levels of activity with sale volumes trending higher and general market sentiment remaining positive. House sale volumes started strongly in 2020 before dipping in late March and early April with the onset of COVID-19 restrictions. By May, sale volumes had regained momentum and have continued to consolidate on the strong start to 2020.
We are seeing sales taking place more consistently across all Townsville suburbs, with much less focus than before on the central (4810 postcode) suburbs. Agents are reporting that new listings and stock levels are low.
Anecdotal evidence suggests that the residential land market has seen a surge in activity on the back of the homeowner grants with land in a wide range of locations and price points seeing activity.
The spring selling season will correspond with the support mechanism JobKeeper coming up for renewal, resulting in some businesses again having to stand on their own. What impact this will have on job security and the property market is as yet unknown.
Whitsunday Property Update
The beautiful Whitsundays has been tracking along at a good pace. COVID-19 has had a huge impact on the tourism activity and industry, however, this is not showing any downward signs in the residential market.
Agents are advising that their listings are low due to the amount of sales that have occurred over the past three months. There is not one market that is moving on its own; there are the lifestyle properties, land and we are also seeing some unit sales and of course residential dwellings.
We are very mindful of the fall out COVID-19 will have on the region. The packages the government has made available with JobKeeper and JobSeeker are helping the region given that we rely so heavily on the tourism industry. We would love to see the borders open and more flights into the region.
There appears to be many caravaners who have escaped the southern states and are here travelling north enjoying our winter and injecting some muchneeded capital into the region. Most free camping facilities are almost to capacity.
Who knows, with most people working from home, we may see an influx of people moving to the area and working in our paradise. With overseas holidays being on hold for a while, we would love to see everyone in the Whitsundays! Noelene Spurway Property Valuer
Toowoomba Property Update
Spring has traditionally been a great time to sell a house in Toowoomba. The annual Carnival of Flowers event in September is seen locally as the catalyst for a ramp-up in buyer enquiry as Toowoomba emerges from the cold, frosty winters and the influence of strong westerly winds. This year has a different feel as sales activity and buyer enquiry has been unseasonably strong.
Residential vacancy rates are at a ten-year low and now sit below one per cent. Vacant land stocks have been absorbed and new home construction is set to boom between now and the end of 2020. Sales activity is expected to remain buoyant over the next few months while the government stimulus packages are in place. There have been some examples of market leading sales which further support the strong market conditions. A customdesigned, resort dwelling in Middle Ridge sold for $1.41 million in May.
A historical homestead in Newtown sold for $1.54 million in May. This sets a new price benchmark for the suburb and reflects the large lot size and historic property attributes.
The good start to the winter crop season across large areas of the Darling Downs may also have contributed to the strong market conditions. Primary producers are often active in the Toowoomba residential market when seasons are strong. A well-regarded private schooling sector is attractive to primary producers and Toowoomba is often viewed as a suitable location for retirement.
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.