Regional QLD March 2018

The month in review: Regional QLD

By Herron Todd White
March 2018

Sunshine Coast

Sunshine Coast is one of the more unique areas in that it covers a larger geographical location than the Gold Coast with around half the population. As such, the coast historically was made up of three shire councils which provided four main service centres. When looking at middle ring properties, it is around these service centres and linking suburbs that we have defined as our middle ring.

Firstly if we look at the old Caloundra Shire situated towards the southern end of the Sunshine Coast, the coastal suburbs of Battery Hill, Currimundi and Golden Beach continue to remain popular. Older houses at $500,000 or under are in high demand, that is if you can find one. The suburbs provide good connectivity to Caloundra, with Battery Hill and Currimundi also in proximity to the new Kawana University Hospital.

Moving to the old Maroochy Shire, Nambour was once viewed as the capital of the Sunshine Coast especially given that the old sugar mill and main hospital were located there to service to the region. Surrounding small suburbs such as Burnside, Coes Creek and some railway towns such as Landsborough, Beerwah and Yandina provide the middle ring properties. To this day they remain relatively affordable with entry points at circa $350,000 to $400,000.

Maroochydore is now regarded as the capital of the Sunshine Coast which is no surprise given that the new town centre is to be located there. Small surrounding suburbs such as Mt Creek and Kuluin to the south and coastal suburbs to the north of the Maroochy River such as Pacific Paradise, Marcoola and Mudjimba have continued to remain popular with price points similar to those in the Caloundra Shire and maybe even a touch higher.

Looking north to the Noosa Shire, areas such as Tewantin, Sunrise and Castaways Beaches provide that middle ring market but the price points change. Tewantin would be in the order of $550,000 but Sunrise and Castaways Beaches jump to $700,000. This is the nature of the Noosa market as it is historically driven by a high percentage of interstate purchasers and investors.

Properties in each of these middle rings tend to be the ten to 30 year old homes usually sitting on 500 to 700 square metres. At an entry price of circa $500,000 to $550,000, the middle rings directly compete with the new estates being generally newer smaller homes on smaller allotments.

As an example, you can get a new 4-bedroom, 2-bathroom dwelling with a double garage of around 150 square metres of living on a 400 square metre lot in one of the new estates at Palmview or Caloundra South (Baringa) at a similar value level as a new 4-bedroom, 2-bathroom dwelling with double garage of around 180 square metres of living on a 650 square metre lot in the new estates at Nambour or the other railway townships.

Overall, this sector of the market performed well throughout 2017 with rentals in these areas also in high demand which is a good sign that the market is healthy. Looking ahead demand for beachside property will always be there. The hinterland towns will also see a benefit as highway upgrades are completed.

Toowoomba

The Toowoomba residential market appears to remain location and property specific with some suburbs continuing to perform better than others. There was a continued trend of low levels of sales activity and value stabilisation throughout 2017, however there appears to be a small rise in sales activity for the start of 2018.

The middle ring market, comprising properties in the $350,000 to $600,000 price bracket which encompasses the median price of approximately $380,000, remains significantly more active than higher price points due to affordability. The prestige market for $1 million plus properties continues to show signs of strong interest and sales results in recent times, but is limited in supply. The middle ring price point encompasses a wide variety of household types, ranging from first home buyers through to retirees.

At the middle range price point there is a very broad range of properties available. Properties include colonials in East Toowoomba, South Toowoomba and Mount Lofty, 1970s brick in Centenary Heights, Kearneys Spring, Middle Ridge and Rangeville, and near new homes in surrounding areas such as Westbrook and Highfields. It is expected that values in this segment will remain relatively stable on the whole throughout 2018.

The majority of this market segment is owner occupied however there is a substantial amount of rental properties that also fall inside this price point. The rental market is in a balanced situation with vacancy rates of around 2.6% as at January 2018, keeping investors interested in the region, albeit at a lower level than in recent years. The current infrastructure projects are believed to have assisted in holding vacancy rates low with many employees living in the Toowoomba area during the construction phases.

Overall, despite the soft market conditions experienced throughout 2017 there is likely to be continued demand across the board for properties around the $350,000 to $600,000 price point and it is predicted that the owner occupier dominated suburbs such as East Toowoomba, Middle Ridge, Kearneys Spring, South Toowoomba, Mount Lofty and Rangeville will continue to record a more stable growth pattern than investor driven suburbs across Toowoomba’s western suburbs.

Rockhampton

For Rockhampton, the middle ring market sector applies to price point, rather than distance from the facilities of the CBD. Being a regional area, we have the luxury of all suburbs being located within approximately ten kilometres of our evolving CBD.

Under current market conditions, the mid-point of our local market is considered to be rather broad in terms of value range, but generally speaking, $250,000 to $450,000 is considered reflective of our local mid-point bracket.

Typical styles of property available in this middle market sector vary depending on locality. South of the river typically provides a neat Queenslander in areas of Wandal or Allenstown, providing 2- to 3-bedroom accommodation up to around $350,000. Northside is more diverse, where a renovated highset 1970s 3-bedroom home can be purchased up to around $320,000, or a semi modern, onground brick 4-bedroom, 2-bathroom home becomes obtainable around $400,000 to $450,000 predominantly in Frenchville or Norman Gardens. Berserker provides a mix of accommodation styles centrally located to all facilities in the mid to high $200,000s.

Over the past 12 months, this sector remained mostly stable, with selling periods for well-presented properties starting to shorten to a number of weeks, rather than months, when realistically priced.

Buyer profile in this mid sector is mixed, however has been more reliant on owner occupiers in recent years (many first and second home buyers). It is worth noting that in recent months we have seen rental vacancy rates stabilising around 3.7% to 4.5% (down from around 6%), which may lead to more activity from investors in this mid-section moving forward.

Challenges to be overcome in this market sector are certainly not exclusive to the middle ring. The market as a whole is starting to show some very early signs of stabilisation which continues to rely on positive outcomes of our diverse local economy, good cattle and coal prices and overall improved perception of job security in the short to medium term, together with affordable interest rates.

There are a number of infrastructure projects in the pipeline for the region, most notably Rockwood Weir and upgrades to the Base Hospital car park. Rockhampton Regional Council has also heavily invested in upgrading our riverfront which is now nearing completion and there are further plans to integrate this area with our existing CBD. Another large scale infrastructure project on the horizon is the Rockhampton Ring Road, however this remains in the early planning stage at this point in time. Again, these projects are not specifically going to boost the mid-point of our market, but rather our local economy as a whole.

Given the local area has been going through a sustained period of consolidation, the long term prospects of this market sector over the next ten years or so is hopefully going to be a time for stabilisation, followed by slow and steady growth. Rockhampton is known for being a less volatile market than some of our regional neighbours, therefore it is difficult to comprehend the highs of 2008 occurring again, however steady growth is a real possibility now with signs of stabilisation starting.

Gladstone

As with most regional Queensland locations, Gladstone is too small to have different markets (or rings) depending on the distance to the CBD as almost all residential suburbs are within ten kilometres of the Gladstone CBD. We do however have a middle ring from a price point of view and it is definitely the most active sector of the market given that it ranges roughly between $250,000 and $500,000. There has been a marked increase in demand over the past six months or so for properties in this price bracket, especially for well established family homes typically providing 4-bedrooms, 2-bathrooms plus a pool or shed. The buyer profile in this mid sector is mixed, however is more reliant on owner occupiers.

Emerald

Emerald is too small a town to have separate markets for inner and outer rings from the town centre. The mid price point range is $250,000 to $350,000. This market segment is starting to firm. In this price bracket you can get a neat, good quality older home or basic modern home in some of the less sought after localities. Most buyers can’t afford the higher quality executive homes in a good location above $400,000 but are entering the market at the next best thing which has seen values rise 10% to 15% over the past nine months for properties now selling between $250,000 and $350,000. Only twelve months ago there were very few sales between $300,000 and $400,000 but as values continue to firm off the back of a more buoyant resource sector we are seeing sales in this middle price bracket now.

Whitsunday

In the Whitsundays, it is the price point rather than location that comprises the middle ring. The Whitsunday middle ring market is considered to be $380,000 to 460,000 across the suburbs of Jubilee Pocket, Cannonvale and Cannon Valley. This will get you a circa 1990 onground style dwelling, a circa 2000 highset or a 2015 modern slab on ground rendered dwelling.

The Whitsundays is a work in progress after Tropical Cyclone Debbie. We are slowing getting back into full stride. The rental market is considered false in nature as we have people displaced since March 2017 whose rents are being paid by insurance companies at a higher rate and also an influx of tradies to the area who share houses and are happy to pay the higher prices.

We still have lots of scaffolding all around the area. There are still so many businesses yet to start trading again. For example, the Airlie Beach Hotel still has no accommodation as this has yet to be completed by the insurance builders. It will be one year on 28 March. The Airlie Beach Hotel only has one bar and one restaurant open while the others remain closed. The Proserpine Golf Club is still under renovation and many homes and shops have been demolished in the Proserpine area.

Insurance claims and building works to homes is the most common talk at any lunch, dinner or party. I expect that the latter half of the year will see some of this start to diminish.

Mackay

In Mackay, the middle ring would refer to price point rather than any geographical location. Currently the middle market is considered to be around the $350,000 to $500,000 price mark across all suburbs. For this amount you are looking at a real mixed bag of property types. In the well established inner suburbs, this price will get you a renovated good quality Queenslander or 1970s style highset dwelling. In the more modern areas, this ranges from 1990s style 3- and 4-bedroom dwellings in suburbs such as Andergrove and Beaconsfield (lower end of the range), ten to 15 year old modern dwellings in Glenella and Mount Pleasant and larger and new dwellings in estates such as Kerrisdale and Mira Flores.

The Mackay market is starting to show signs of recovery. During the back end of 2017, the market stabilised on the back of increased sales volumes. This trend has continued into 2018, with most agents reporting increased demand and shortening time on the market. Rental demand over the past 12 months has also increased significantly, with vacancy rates for Mackay now sitting under 3% and rental values slowly starting to creep back up

There is a real sense of optimism in town that the worst is behind us. Economically speaking, there is renewed confidence in the resource sector on the back of improved coal prices and employment opportunities. Large infrastructure projects are starting to ramp up, such as the $500 million Mackay Ring Road project, Eton Range Bypass and the Vines Creek bridge projects. We think this year will see some moderate growth in values based on this renewed confidence.

Hervey Bay

Due to Hervey Bay’s geographical layout, there are no defined inner or outer circle areas. It does however have a middle market price range which generally ranges from $400,000 to $600,000. Since July 2017, there have been approximately 173 sales of property within this price range across the Hervey Bay post code. These sales can be broken up as: six units all with esplanade frontage; 97 sales of property on land less than 2,000 square metres; 56 sales of property on land from 2,001 square metres up to two hectares; and 14 sales of property over two hectares. As seen from this evidence, the most active asset class is for low density property on typical residential lots. Within this price range, these properties are generally improved with 4-bedrooms and 2-bathrooms with the higher end of the range having extensive ancillary improvements. It is a positive sign that activity is strong in this price bracket which hopefully leads to more activity in the price range above $600,000 which has also seen an increase over the past six months.

Townsville

The middle ring of Townsville is typically suburbs located in a three to eight kilometre radius of the city and includes suburbs such as Currajong, Gulliver, Railway Estate and Hermit Park.

These suburbs typically comprise older style timber framed dwellings ranging from original condition through to fully renovated. There are also some suburbs in this radius that offer multi unit developments ranging in age, style and design.

Throughout 2017 the most active participants in the market were owner occupiers. This middle ring provides good entry level buying for first home buyers and renovators with entry from the low $200,000s for houses and from as low as $100,000 for units.

The rental vacancy rate in Townsville tightened substantially during 2017, which anecdotally appears to be enticing investors back to the market.

Recent evidence suggests that savvy buyers are already realising the potential for growth in this middle ring radius and once new infrastructure projects in the inner city come out of the ground, this is likely to strengthen interest in the area.

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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.