The month in review: Regional NSW
By Herron Todd White
The Southern Highlands and Wollondilly residential property markets have been strongly improving over the past 18 months. This increasing trend in prices is most apparent in the lower price bracket (under $1,200,000). There have been marked increases in both volume and value across all of the townships and villages of the Southern Highlands. Our conversations with local real estate agents confirm increasing enquiry rate and market activity. For the year ahead, we anticipate this trend to continue.
The prestige residential property market in the Highlands has been fragile over the past several years, with more recent sales showing in some cases a heavy markdown over what the asset previously traded for. It is fair to say that activity in this sector is now increasing off a low base. The majority of the upper end properties are located in the main townships of Bowral, Mittagong, Burradoo and Moss Vale and comprise up to 3 hectares of curtilage, priced from $2.5 million to $5 million. There is also the rural/residential lifestyle market, with properties situated on the perimeters of the townships and hamlets of Glenquarry, Kangaloon, Robertson, Berrima, Sutton Forest and Fitzroy Falls. Ranging in price from $3 million to $7 million, these properties are generally on larger land holdings from two to 80 hectares.
With respect to trophy sales, a property in Bowral known as The Rift sold in October 2014 for $5 million to an eastern suburbs buyer. Situated on 2.7 hectares of park-like grounds it comprises a magnificent meticulously renovated Italianate manor house dating from the 1890s with a detached 6-bedroom home (previously used as the Manor Coach House). The Rift operated as a guest house between the 1920s and 1930s and accommodated notable residents such as the virtuoso operatic soprano Dame Nelly Melba. During the 1940s and 1950s it was occupied by a series of boarding schools and during the second World War, the School House was used as a temporary location for the Junior School of Rose Bay Convent.
Also sold in October 2014, Aberdeen Estate achieved $4,650,000. The property is located at Fitzroy Falls on 44 hectares (110 acres) and is a large 5-bedroom, 6-bathroom, semi-modern residence with high quality finishes and featuring an indoor pool, tennis court, small vineyard, barn, ornamental lake and manicured grounds. The prestige market is heavily influenced by the fortunes of the Sydney prestige property market. We are expecting this sector to remain steady or perhaps increase slightly throughout 2015.
NSW Central Coast
The NSW Central Coast region is positioned between the Sydney metropolitan area and Newcastle. When speaking prestige property in the region, most eyes quite rightly turn to the beachfront locations or our more gentrified rural residential areas. So let’s kick the discussion off with the tried and true tests of the region’s prestige markets. At the southern end of the coast, these areas include the beachside suburbs of Terrigal, Wamberal, North Avoca, Avoca Beach, Copacabana, MacMasters Beach, Killcare and Pearl Beach or if rural residential lifestyle properties are on the radar, then Matcham and Holgate are generally at the top of the wish list.
Terrigal and Wamberal are the areas that we usually hear about when talk of prestige property starts. Generally, we can associate a pricetag above the $2 million mark for these areas. At Terrigal, a recent sale on the Scenic Highway is a notable one at $2.4 million which secured a very nice rural residential property with a large 5-bedroom, 7-bathroom dwelling with servant quarters, swimming pool, manicured grounds and ocean views.
In terms of units, $2.9 million was recently paid for a 4-bedroom, 4-bathroom unit in The Star of The Sea complex. This is a resort style complex on a headland at the top of the main street. Better than that though, a retired Sydney couple have recently paid $3.7 million for a penthouse opposite the beach.
Next door at Wamberal, $3 million was paid for a renovated dwelling with 4-bedrooms on the beach and $1.96 million for a newish, contemporary dwelling in sought after McGee Avenue. Rumour has it though, that negotiations have been ongoing for a while to secure another beachfront property here with an $8 million purchase price being mentioned and another near new McGee Avenue dwelling at around the $2.3 million mark.
North Avoca is next to Terrigal. To some, this is where the serious buyers go and we often see $2.4 million to $2.5 million sales here for beachfronts, but it’s not unusual to see much higher prices paid – such as the recent sale of a 6-bedroom, 5-bathroom beachfront dwelling at $4.25 million.
A little further south is the popular village of Avoca Beach. Popular with visitors and fiercely protected by the locals, Avoca Beach is one of the prettiest beaches along the coast. Again, prestige property is normally associated with the coveted beachfront strip and we note that a renovated cottage with 4-bedrooms and 3-bathrooms sold during the year for $4.35 million and that a renovator’s delight recently sold for $2.75 million.
Further south again in the MacMasters Beach, Killcare and Pearl Beach areas, prices paid for prestige property varies a little, which we attribute to properties in these areas being a little more tightly held which leads to limited stock available at any one time. Owners tend to hold their properties a little longer and this may be an indicator of the type of people we see in these areas where there is a larger representation of weekender type houses. Well resourced Sydney types prefer these areas for reasons that include the short drive from Sydney, privacy, views, refined neighbours and conveniences. Expect to secure prestige property toward the high $2 million and over in these areas.
That essentially covers the beachside areas for prestige property, but for those more inclined towards prestige rural lifestyle property, the Matcham and Holgate localities are generally regarded as the places to go. There are of course pockets of prestige rural residential scattered about the southern end of the region, but these two areas are generally front of mind. In previous years, there have been a number of $3 million plus sales, but in the past twelve months, prices seem to have peaked at $2.3 million.
Beachfront areas include Toowoon Bay, Blue Bay, The Entrance, The Entrance North and Norah Head while the prestige rural lifestyle areas include Glenning Valley, Tumbi Umbi, Jilliby and the beautiful Dooralong and Yarramalong Valley areas.
A well located beachfront property in Werrina Parade, Blue Bay, recently sold for $2.5 million and we are told the new owners are planning to renovate and extend. Another Werrina Parade beachfront property sold at $1.815 million. We have looked recently at a luxury beachfront unit at The Entrance North which sold for $1.8 million and while this must nearly be a record for the area, its appointments and view was recognised by the buyer.
In years past, parts of Norah Head and Elizabeth Drive, Noraville were seen as the place to buy – if you could afford it. While that reputation may not be so popularly held these days, we are still seeing sales in this location above the $1.6 million mark for an older, but well maintained 4-bedroom ocean cliff-front property.
Further north, towards the northernmost end of the Wyong LGA, the benchmark for prestige property would have to be Gordon Avenue at Summerland Point. The locals would say enough said and move on. But for those readers unfamiliar with the area, Gordon Avenue has lovely frontages to Lake Macquarie, many of which are deepwater frontages and some of the housing there is awesome. A very nice lakefront property with 4-bedrooms and 2-bathrooms recently sold for $1.92 million. Aside from the water frontage, photos of the property indicate the garage facing the lake was actually an aircraft hangar.
So far as prestige rural residential living goes in the Wyong LGA, we think this starts at about the $1.2 million mark for properties at Glenning Valley, Tumbi Umbi, Fountaindale, Wyee Point and Jilliby. Think of a nicely presented larger project style dwelling with four to five bedrooms, double garage, possibly a pool and tennis court on one hectare. These are symbolic type properties, often with a good touch of bling.
As we move the tempo upwards, the Dooralong and Yarramalong Valley areas rule the prestige property roost with prices well into high $2 million being seen over the years. But that said, there has been a dark cloud forming lately with talks again of mining commencing in the area. Let’s hope this doesn’t progress. Possibly as a result of the mining talk, sales in this category have been very limited over the past 12 months.
Those are the more obvious and often referred to prestige areas in our region, but as we drill down a little further and set aside the notion that prestige property equals the highest amounts paid in the region, we see that just about each suburb on the coast has its own place to be or prestige street within it. This is more often the street with the best views in the area, next to a lake or river or simply a street with a reputation inexplicably gained over time.
Setting aside financial considerations, often we find that for some, moving away from one area to a more traditional prestige area isn’t practical, so rather than make the big move they will upgrade within their current area. The reasons for this can vary – they may be comfortable in their present position, may have grown up in the area and are recognised or relied upon in the community, business reasons, there is an unwillingness to uproot school age kids to another location or just otherwise too established to move.
Some examples of localised prestige markets that might resonate with locals as the place to be include: Stratford Park at Terrigal with a very good range of quality housing and close to shopping, schools and beach where some streets within the area are commanding prices up to $850,000.
Umina Heights where some properties obtain sweeping views across the local area toward the ocean. Over the past twelve months, we have seen property prices rise close to the $1 million mark.
Steyne Road, Saratoga which has many north facing properties fronting Brisbane Waters. Some very good examples of residential dwellings with $1 million purchases (and climbing) becoming the norm.
Waterfronts at Koolewong, Point Clare or Tascott for just over $1 million.
Reeves Street, Narara for large blocks and larger dwellings in the high $700,000s.
East Bateau Bay where prices well over $800,000 are regularly seen. Some of the streets we are thinking of include Lakin, Patstone, Burrawong and Harbour Streets and Bateau Bay Road.
Geoffrey Road, Chittaway Point. Lovely river or lakefront properties with prices also seen around the $800,000 mark.
Grandview Street, Shelly Beach. Adjoining the golf course and has the name – beautiful and affordable to many.
Diamond Head Drive, Budgewoi. On the lake with a nice home for $750,000.
Lakefronts at Charmhaven (Panorama Avenue) or Lake Munmorah (Terence or Greenacre Avenues) for less than $700,000 with a very nice standard of dwelling.
Liamena Avenue, San Remo. Lakefront dwelling for less than $500,000.
The list goes on, but the point here is that some of these locations are seldom thought of as being on the prestige property radar in the traditional sense. But those living there are often seen to have made it not only in the eyes of the local area. For our part as valuers, we see that every area has its benchmark and for us, we rely on that in monitoring how each segment of the market is travelling.
This time last year and the year before that, most talk centred around the first homebuyer and investor market that being in the sub $500,000 market. The prestige property had little foothold in the news during this time and while that is still the case, we have seen movement in the next market segment, that being between $500,000 and $1 million. The drivers of this appear to lie in the low interest rates, upward push on values from those upgrading and the noticeable, strong presence of Asian buyers in the market.
This is yet to have a marked effect on activity within the prestige market in our region, but in our discussions with real estate agents and other sources of analysis, we consider this end of the market will be moving again shortly. How soon and how long it will last is not something we are able to comment on with any certainty at this stage.
NSW Mid North Coast
This month we are looking at the higher end of the market and prestige properties along the Mid North Coast.
As we have noted in earlier reports this year both values and sale rates were starting to increase throughout most of the residential market along the Mid North Coast. However, the prestige segment of the market has been lagging behind with slowly rising sale volumes but, at best, continuing stable values and selling prices. This has been brought about by a combination of oversupply of product available for sale and the limited demand within this market segment.
The price point for what can be considered prestige houses varies along the coast. Prestige properties in the major town of Port Macquarie are generally considered to be over $1 million to $1.5 million. The smaller towns and coastal villages tend to have properties over $850,000 considered to be prestige.
Prestige units are mainly located in the larger regional towns with Port Macquarie achieving higher prices than the smaller coastal towns. Once again there have been limited sales in the over $1 million price bracket, but sale numbers in this section of the market appear to be increasing after several years of stagnancy.
Over the past five years the prestige segment for both houses and units has only comprised a small segment of the real estate market (less than 5% of sales), and this is not expected to change dramatically over the next year or so.
NSW North Coast
There is very limited evidence of a prestige market above $1 million within the confines of Lismore City and the rural townships of Casino and Kyogle. At best, the top end of the residential market within the suburbs of Lismore City would be sales in the $600,000 plus bracket (of which there were very few over the past two years), and would typically comprise four or more bedrooms and two or more bathrooms with double garage, inground pool, extensive landscaping on a large site with wide rural or urban views. They would generally be modern contemporary homes in the suburbs of Goonellabah or Lismore Heights or fully renovated heritage style homes within the suburb of Girards Hill, close to the CBD.
Residential properties within the residential zoned areas in Casino and Kyogle rarely sell for above $450,000 and are generally well established properties with extensive landscaping or possess features such as creek or river frontage. The surrounding rural areas may also provide the occasional rural residential property on a few acres in the $600,000 plus price bracket. Again, this is a relatively rare event.
Rural residential properties on a few acres within the surrounding rural residential zoned localities of McLean’s Ridges, Richmond Hill and Clunes provide a handful of property sales over $800,000. These properties tend to have extensive landscaping and modern residential improvements on a large scale and positioned to afford panoramic views of the surrounding rural landscape or river or creek frontage.
In summary, attributes which define the high end of the property market within the suburban localities of Lismore City, Casino and Kyogle include location (being within close proximity of the town CBD and facilities), views and the quality of the improvements. In regard to the surrounding rural residential areas, defining attributes include privacy, provision of panoramic views, quality and useable nature of land, location within close proximity of facilities such as towns with shops and schools and the quality of the improvements.
The market for prestige properties within Lismore and its surrounding localities is also currently slow and limited to high net worth individuals (which are not exactly in high supply). In that sense, the outlook is also fair to moderate.
Byron Bay $1.5 million plus / Lennox Head $1 million plus
Both Lennox Head and Byron Bay (being coastal resort towns) offer a prestige unit market similar to that of the prestige dwelling market. Prestige unit developments within both of these townships are generally located within close proximity of beaches and the CBD which generally hold high appeal and both townships have unit developments which crack the million dollar mark regularly.
This sector after a sluggish two to three year period has really seen an increase in demand within the past six months to a year in both townships.
The prestige market in both localities tells a lot about the market. When the market is in decline they are the first properties to become harder to sell and spend a lot of time on the market and when the market is firming (all market factors being equal) they generally see significant shortage and strong demand which in turn shows an increase in value.
The Byron Bay market is not so much influenced by interest rates because purchasers in those price brackets generally do not have to rely on significant finances from banking institutions. Agents have reported a significant amount of purchases in 2015 within this market have not required valuation or if the purchase price cannot be supported those buyers are financing the residual themselves.
Yamba / Grafton
In Yamba the prestige market is considered to be above $1 million for both houses and units. Since January 2014, four houses and three units have sold in this category. These properties are generally located on a canal or river or have ocean views. This slow but steady flow of prestige sales shows there is interest in the location from the capital cities with larger spending ability compared with the local market. There may be potential for capital increases over the next coming years due to large highway infrastructure work planned. Once this is completed access to the region from the larger populated northern city areas may be increased thereby increasing demand with limited supply.
In Grafton a prestige house is considered to be above $500,000. There are no units considered prestige. Only three houses in this price range have sold since January 2014. The prestige market in Grafton is limited.
It’s interesting how things have crept up around here in the past five to ten years. While talking to an experienced local builder the other day about a property in Bathurst that was selling for just below the $500,000 mark, his comment was that you could just about have your pick of anything for that kind of money. I nodded at first deferring to his greater experience, but then a funny thing happened. Our eyes rolled up searching for the back of our heads which then tilted slightly upwards. In an instant we had mentally scanned the local market assessing the validity of the comment. He knew his established benchmark needed reassessing.
In the past 12 months there have been 15 residential sales in Orange that were above $700,000 out of approximately 679 sales in total. In Bathurst that number was eight out of a total of 635 sales. That’s a market share of 2.2% and 1.25% respectively. This sales percentage in my opinion would also be representative of the share of the properties available in this price bracket. In my book that makes $700,000 the new benchmark for just about having your pick of anything.
Two standout sales include 39 Byng Street, Orange and 275 Keppel Street, Bathurst. Of the sales in Orange nearly all were within a tight radius around Cook Park. 39 Byng Street is no exception and is typical of the style of the area, being a fully renovated circa 1890 brick dwelling with 4-bedrooms, 3-bathrooms, 2-car detached garage and in-ground pool on a 1,409 square metre block. This property sold for $1,030,000 in June 2014. Properties above $700,000 in Bathurst are more widely dispersed across the town.
Blair Athol, 275 Keppel Street is a truly unique property in Bathurst. It is a circa 1892 Victorian style dwelling with 5-bedrooms, 3-bathrooms, 4-car garage and extensive landscaping on a 5,085 square metre block. The former owner was Mr Bruce Bolam. He is a former Mayor of Bathurst and is prominent within the community, particularly commercial property development. He was recently awarded a Medal of the Order of Australia for service to the community of Bathurst. The property was reportedly sold privately last year but to date I have not been able to confirm the sale price with an appropriate level of certainty. Suffice to say, however, it is unlikely I will be doing many valuations where this property would be a useful comparable sale.