The month in review: Regional QLD
By Herron Todd White
As at the beginning of 2016, Toowoomba’s median house price remains affordable at approximately $370,000 and despite a noticeably softening market sentiment, sale prices have not yet shown signs of decline. However, it is apparent that the peak of the residential market has passed with agents reporting reduced investor enquiry.
With current property climate in mind, investor interest cooling and upgrader enthusiasm easing, home owners are turning to regeneration and renovation. The key areas where this gentrification is most obviously taking hold is in the affordable suburbs of South Toowoomba, North Toowoomba, Mount Lofty and Newtown. The traditionally less sought after suburbs of Rockville and Harlaxton are slowly transitioning to gentrification hot spots due to their affordability. At a higher price point, the style of dwelling common in East Toowoomba and scattered throughout established parts of Toowoomba, being older style early 1900s cottages, lend themselves to current renovation trends and modern extensions. Not surprisingly, due to the steady trend of rejuvenation of this type of property, the median price in East Toowoomba is $445,000, significantly above that of the broader Toowoomba area.
As for the medium to long term, while the peak of the Toowoomba residential property market has passed, these gentrifying areas look set to maintain current levels of demand and value, however as is expected across the entire Toowoomba region, some slowing in sales activity may occur.
The Sunshine Coast in comparison to other areas of the country is relatively young. Older areas are typically found around the original council centres of Caloundra to the south, Maroochy to the centre and Noosa to the north. The main driver of gentrification is generally that these older areas are well located to amenities and close to the beach, thus creating demand for these locations as desirable places to live.
In the old Caloundra Shire, the areas around Moffat Headland have always been popular. These areas have accelerated over recent years with a number of renovations or re-builds being undertaken. Being close to the beach and the village atmosphere really helps this area along. Remaining with the close to the beach theme, areas around Golden Beach to the south of the town centre and the Kawana strip to the north are seeing 30 to 50 year old housing being up-graded. In Maroochydore in the old Maroochy Shire, areas around the current and proposed town centres are in demand. Typically these are 1970s and 1980s vintage houses with the entry level being circa $400,000. Throw some dollars and nice design features at it and $500,000 should be achievable. Other areas of Alexandra Headland, Mooloolaba and Cotton Tree down on the coast and Buderim up on the hill have been going through this gentrification process over a number of years.
Up north in the Noosa Shire the areas in Old Tewantin near the river and town centre and also Noosa Junction are seeing a significant number of renos and rebuilds, once again, in areas close to shops and cafes and the beach or river.
One example in Old Tewantin is a property purchased for around $400,000. The owners undertook a sharp reno and were able to achieve circa $575,000 – a great result.
The type of gentrification has been restricted mainly to housing but we have started to see the rise of duplexes and small lot housing which have really started to appeal to the lock and leave crowd who would rather travel then have to look after a big yard.
Rockhampton has been going through a gentrification process since late 2005 when the first high-rise unit complex in over 30 years was completed along the river bank. Since then there have been an additional six high-rise unit complexes completed comprising a mix of permanent and short term accommodation and of late the addition of various restaurants and cafés in the Empire and Edge buildings which were both completed in the past five years. Victoria Parade and Quay Street have become the heart of the city and this is supported by Council’s recent announcements regarding the funding and approvals for the Rockhampton Revitalisation Concept Plan which focuses on the Fitzroy River from Quay Street to William Street. A set of new pathways, landscaping concepts, memorial and historical features are all incorporated into the project. Rockhampton has seen an increase in the number of small cafés and boutique shops with a noticeable increase in alfresco and street side dining areas. Within Rockhampton city itself there is a slow but gradual phasing out of old timber and fibro dwellings and replacement with more modern charismatic small and compact unit developments, often available for under $300,000. Given that the current economic climate is considered to be somewhat weak, this process may take some time however the diversity of the local economy is sure to keep the gentrification process ticking over.
Building activity has significantly increased over the past six to twelve months in Hervey Bay. There are currently over eight new estates being developed, mainly next stages of existing estates, with some new estates. Suburbs of Urangan, Wondunna, Kawungan, Urraween and Pialba have absorbed most of this activity, with many developers selling their proposed turn-key dwellings off the plan to southern interstate investors. Prices range between $330,000 and $400,000 for most properties, with the majority of lot sizes between 350 and 700 square metres. Features typically encompass an above average standard and include stone bench tops, split system air-conditioning and landscaping. Higher density living with smaller lot sizes (up to 500 square metres) is now accepted (and perhaps encouraged) by local council and has been well received by the market.
The steady rise in rental return over the past eighteen months has been stimulated by the ongoing influx of personnel for the new medical facilities in Urraween. A tenant can now expect to pay between $360 and $440 for a new 4-bedroom, 2-bathroom dwelling with double lock-up garage.
To date, there has been no significant rise in values for older existing stock, however higher priced property up to $700,000 has been selling within shorter selling periods. The absorption of excess unit stock has now concluded, with new unit development foreseeable and welcomed in the near future.
Gladstone is not a large enough city to see different suburbs being subjected to gentrification. Most new development occurs in newer suburbs on the city fringe. In years gone by, parts of central suburbs such as South Gladstone and West Gladstone were popular with developers building townhouses on larger allotments closer to the city. Most of this redevelopment has ceased however since the market peaked.
The Mackay market is currently in the grips of a falling property market due to the downturn of the mining industry and associated service industries in Mackay. The residential market has fallen between 25% and 30% over the past two years. At present, it is difficult to establish whether any areas will become the new trendy suburb to be subjected to gentrification, as most sectors of the market are just trying to hang on. The Mackay market has had little pockets of development and revitalisation over the past few years. In established suburbs of Rural View, Ooralea, North Mackay and Marian we have seen construction of small shopping centres anchored by major grocery stores with small specialty shops and eateries. Recently, the older established suburb of West Mackay has had a development incorporating a new highrise residential apartment complex and adjoining shopping centre including small restaurant strip. These developments are seen as helping boost the appeal of the existing suburbs. Another major initiative in Mackay is the CBD revitalisation project involving the Mackay Regional Council updating the CBD with new roads, parking and amenities. A recent donation to the Mackay Regional Council was a two storey commercial building within the CBD precinct. The Council intends to convert the upper level into a public library as part of the strategy to revitalise the CBD.
Whitsunday is small compared to most of the cental Queensland areas. New development occurs within pockets of all existing suburbs. The area mainly feeds off the tourism industry which is slowly increasing particularly Chinese visitors and this has also brought about forums on the expectation of these tourists. Just in recent times, purchase of an area earmarked for a China Town has all fallen through with the local council voting not to extend the contract for the purchase of the land. Airlie Beach has always been a favourite with any purchaser with its ocean and island views as have the lifestyle properties in the outer areas.
Traditionally when we think of the suburbs of Oonoonba and Garbutt, we envisage older style timber framed homes on traditional lots generally of a modest to average quality. In 2012 a new infill land estate known as The Village commenced development in Oonoonba with another new infill land estate known as Haven recently commencing construction in Garbutt. While these developments are not gentrification in its purest form, they are providing a change to the landscape of these suburbs. Both these estates are within four kilometres of the CBD making them locationally desirable and have a high concentration of small lot sizes. Due to the higher density of these estates, construction includes a mix of single and double storey masonry block homes. Within The Village there have also been some small complex unit developments. The appeal of these developments is very much price point driven with entry in the high $200,000s to low $300,000s. The major benefit of this style of development is the ability to have a unit sized home on a small low maintenance allotment close to the City and The Strand without the costs associated with body corporate fees. Predominantly small lot, higher density land estates are a relatively new concept in the Townsville marketplace and how these estates present in the long term is yet to be tested.