Southern Highlands The Southern Highlands and Wollondilly residential property markets continue their upward trajectory both in volume and price. Over the past 18 months, this increasing trend has been most apparent in the lower to middle price brackets (up to $1,500,000), across all of the townships and villages of the Southern Highlands with listing sales periods having reduced dramatically. The lower price bracket (under $700,000) was the first market sector to start increasing, with a flow on effect to the middle price bracket (up to $1,500,000). The main market drivers are interest rates and affordability, with a notable increase in Sydney based buyers.
There has been good land sales activity in the now established residential subdivision precincts such as Renwick Estate (Mittagong), Bingara Gorge (Wilton) and more recently smaller more affordable lots at Darraby Estate (Moss Vale) and Nattai Ponds (Braemar). New construction activity has also been evident, most commonly project style homes within these new residential estates. There has also been a marked increase in renovation and extension activity in the well located, older style and character homes within the townships of Bowral and Mittagong.
The retiree market in the Highlands remains strong with the take up of low maintenance seniors living and medium density properties and projects. The upper end of the market has bottomed, albeit there is still some caution evident, but we are starting to see an upward trend.
In general, the increase in prices in the region has been at a steady rate and not a ramp up so we consider the market movement over the past 18 months to be sustainable and that it should continue over the next twelve months.
Southern Tablelands The Southern Tablelands region is steady to firming. Goulburn has seen good growth generally over the past five years. There have been good land sales in the new, modern residential estates in Goulburn, including the Belmore Estate, Merino Country Estate and the Mistful Park estate. There is good construction activity of new homes being built. Sydney investors are currently quite active in the Goulburn market. The market in Crookwell is steady.
The rural residential property market (two to 100 hectares in land size) is steady throughout the Tablelands.
NSW Central Coast A number of sectors appear to be firing at present in the Central Coast region. The first home buyer, second and subsequent buyers, downsizers, upsizers, renovators, even the prestige market is getting a run. We think the region’s market could possibly be in a state of confusion.
Several economists have said consumer confidence is strong and it’s hard to disagree. Some local property writers have said the number of sales under $400,000 in the region has shrunk and it’s also hard to disagree with this – especially when considering the rise in the value base that we have seen over the past two years and what used to be in the under $400,000 market now sits above this level.
Sales statistics, measures and commentary via listening and reading what’s fed to us in the media is fine and in most cases we can accept this information as being fairly accurate on the whole. But we’ll approach this month’s subject on what’s hot a little differently for our readers and drill down to look at actual instructions we have received lately to see what areas and price points we have been providing answers on.
We hope this provides a useful and thought provoking snapshot of where we are at present, although the way the market is behaving, the situation could change very quickly.
The most popular areas within the Gosford Local Government Area according to the number of instructions received by us since May 2015 have been Narara, Terrigal, Umina Beach, Gosford and Wamberal.
Narara has been mentioned as a popular suburb lately and there seems to be some truth to this. This is a well established area where the median value for housing at present is around $515,000 which will secure an older style, but renovated 3- or 4-bedroom home with garaging. The attraction of this area lies in its level of affordability and proximity to shopping and transport.
Terrigal and Umina Beach have long been popular areas and it’s not surprising to see that we visit these areas more often. Terrigal is a seaside suburb with a vast range of properties available from basic to prestige dwellings and units. The median value for dwellings at present is $800,000 with units sitting at around the $554,000 mark.
Umina Beach has been the star performer on the coast for several years and judging by the number of times we have visited the area lately, there doesn’t seem to be any sign of this changing. The median value in Umina Beach housing is currently around the $605,000 mark which is an increase of approximately 15% since this time last year, but we have also seen a few large increases in properties sold and resold within a two year period. The big driver in this area is value adding, usually in the form of secondary dwellings or granny flats. It remains to be seen whether prices being paid at the moment for properties as is or after value adding are sustainable – we have our doubts.
This investment is mainly in the unit market and with the number of units and apartments recently approved numbering over 600, we see the potential for an oversupply to emerge quickly if developers don’t exercise control in the commencement of these new developments.
Wamberal has always been seen as an alternative to Terrigal and with good reason. It’s a popular family suburb with beaches and sensibility. The rising popularity of Wamberal can be seen in the current median value of $842,000 which is an increase of 20% over the past year.
The Wyong Shire is sometimes looked upon as the more affordable end of the region and while that may be the case, the opportunities available here have outnumbered those found in the southern end of the region. A look at the number of times we have visited the various suburbs in the Wyong Shire tells us that real estate activity is more even across the shire with little variation seen in our visits between one suburb and another.
Due to the current level of construction activity occurring, we have been visiting Hamlyn Terrace, Woongarrah and Wadalba more frequently. These are developing suburbs where project style homes are well represented. Expect to secure a standard 4-bedroom, 2-bathroom and double garage dwelling for between the high $500,000s to mid $600,000s. These areas are new and attractive to young families because of their equally new schools and the amenities available.
The older and established suburbs of Bateau Bay, Berkeley Vale and Killarney Vale seem just as popular as ever, but there seems to be more renovation or value adding activity going on here. Value adding in these areas includes the construction of secondary dwellings or granny flats and while this is an area gaining in popularity, we wonder what the long term effects on value and amenity will be.
NSW Mid North Coast
This month we are looking at which sector is firing and we consider that the lower to mid market value properties appear to be the most active along the Mid North Coast.
During 2015, the larger coastal towns (Port Macquarie, Forster, Tuncurry, Taree, Wauchope) have seen rapid increases in both demand and values. However the current lack of listings across the market has dampened sales somewhat. Demand has remained strong but the appearance of the market slowing has been related to the current lack of available properties to buy.
This current lack of stock available for sale has caused values to climb, especially in the lower market segments (for both dwellings and units) as multiple buyers compete for limited properties. This has seen a rise in the number of properties sold at auction, with potential purchasers bidding directly against each other and pushing up sale prices.
We have noticed that in this lower segment, investors are still very active, with many mum and dad investors, interstate and self managed superannuation funds all competing within the same market segment. This may be causing values to rise but, conversely, it is generally causing yields and returns to fall.
There remains good demand for rental properties and rents have steadied after a rapid rise at the start of the year, caused by a large influx of highway workers and CSU construction workers and students.
New dwellings, mostly located in developing estates, have been in high demand by both owner-occupiers and investors. This has seen vacant land values rise in these estates. Also the current rental returns for these properties make them attractive. Off the plan sales increased dramatically during 2015 compared with previous years.
As noted previously, the local residential property sector on the Mid North Coast is still in a state of growth, however the rate of increase (in both number of sales and values) appears to be steadying somewhat throughout the region, except for Port Macquarie.
It will be interesting to see if sale rates and values continue to increase at the current rate over the next few months with the seasonal influx of properties listed for sale in spring.
Overall, the demand for dwellings and units in the low to mid value market segments as well as rental returns are expected to continue to increase over the remainder of the year but at a slower rate than the first half of 2015.
Bathurst Lately agents have consistently mentioned that there is strong interest for rural properties, particularly over the $1 million mark. This is surprising as this market segment is not often noted for being on fire. The drivers for this shift include local buyers and retirees and professionals from capital cities. For instance approximately 20 agricultural business personnel with Macquarie Bank are said to be relocating to Orange, although this has not been confirmed. For local buyers such properties are viewed very favourably and owning one is an aspirational goal for many.
The region is popular because of the natural beauty of the gently undulating country, diverse economy, good road, train and plane transport services and a large choice of quality rural properties.
An example of a recent sale is 66 Henry Lane, Emu Swamp which has 28 hectares and a 4-bedroom dwelling. Don’t let the name fool you, there is no swamp and not a lot of emus. The property was previously purchased for $820,000 in 2011. The dwelling was extended and renovated in 2013 at a cost of $250,000. The property included many handy extras such as undercover cattle yards, a cattle crush, machinery shed, workshop and a wine cellar. In June this year, it sold for $1.25 million after only 86 days on the market.
While this is positive for the region it is unlikely that the drivers of this market segment will filter through to the broader market where the median house price is about $300,000 to $350,000. The sustainability of this trend will depend on economic conditions locally and nationally and the continuation of the good rainfall of recent years.
66 Henry Lane, Emu Swamp
Wagga Wagga After four years of overall static growth in the vacant land sector, the past twelve months has seen an increase in sales and strengthening in land values across Wagga Wagga. This is despite the additional supply that has come from the expansion of Gobbagombalin, Forest Hill and Lloyd.
Gobbagombalin has seen stages of land being released and being absorbed by the market. This is driven by investors with thoughts of building a new dwelling to be leased and by owner-occupiers.
The reduction in the first home builders grant early in 2016 may also have had an impact on the increased sales activity in this sector. If it’s affordable, new home owners who have not owned a house before generally want to build new dwellings. They are less interested in old established homes which require on going maintenance.
It will be interesting come twelve to eighteen months time to see if there will be an over supply of land.
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