Lloyd Edwards, Ray White Buderim
The start of 2016 was seen by many as the year of the sold sign. It seemed like they were everywhere. As quickly as the for sale sign went up they were quickly swamped by a sold sticker. Of course the vast majority of homes sold, were within reach of the average buyers but where were the high end buyers? They were waiting, weighting up the market before pouncing in the second half of the year. Twelve sales over $1million dollars in my marketing place of Buderim in the last three months of 2016 as an example. So what will 2017 be known as for the high end?
The signs are there that this coming year will be defined by supply with huge numbers of buyers through open homes and only limited property numbers to consider. Definite signs of high demand and short supply has meant that sellers are now showing their confidence with truly special high-end properties coming to the market. Properties like 15 St. Martins Tce in Buderim; possibly one of the biggest and best residences I have seen in my real estate career. The quality of the finish, the volume and that ocean view over an elevated pool means the owner had to pick the right time to market and that time they decided is now. Is this the start of the high end recovery or has it already started in the middle of 2016? Either way 2017 is going to be driven by supply.
Other factors will also reduce supply in the high end. Take the acreage areas around Jorl Crt, Buderim, where re-development has meant that acreage homes have become townhouses close to the University. If you want acreage close to the private schools, then your possible selection has been reduced by up to 40% in recent years. Again this will add pressure to an already tight marketplace.
This pressure will continue over the next few years as the population growth driven into the area by large projects like the SCU Hospital, Aura, Palmview, Sunshine Plaza and the airport expansions. Blocks will get smaller, home builders will get smarter design but the high end buyer will be always be here, their choices will be limited and there is an opportunity here for the astute seller to capitialise on this part of the cycle. And so 2017 has to have the title of the year of high end opportunity.
Grant Smith, principal Century 21 Grant Smith Property
In 2016 Century 21 Grant Smith Property marketed a number of properties that were incomplete or required extensive work to make them habitable.
“It was extremely interesting to market these homes,” director Grant Smith said. “As they are uninhabitable it posed potential issues for financing and insuring the properties.
“These properties are difficult to price position due to lack of comparable data so we utilised the same formula on all three sales. This was to publically auction all three with no conditional offers accepted prior to.
“Each property attracted far more interest than our standard properties for sale, this ultimately draws down to the fact that each property in its own merit was an opportunity for the right buyer.”
Spurred along with strong campaigns, each property attracted between six and 14 registered bidders, an exceptional number of cash buyers in any market.
All three sold above their reserve prices which were set based on market and buyer feedback. All successful buyers were locals and they came from various sources, with print proving beneficial.
“The termite house, deemed uninhabitable by the insurance company and likely to be knocked down was purchased by local builder Muir Developments and has been completely renovated and extended, with all damage repaired.
“The unfinished dream home in Tommys Ct, Buderim, sold $50,000 above reserve by Russell Dell from our new projects division. The buyer intends to finish the dream as a project as does the purchaser of Dakara Ct, an unfinished Balinese renovation.
“Properties sitting outside the box require creative marketing and the right agent, and the flow on last year saw Century21 sell a few of these homes with overflows of buyers, and a surprising volume of new buyers.
“Our experience shows that with the cost of building, buyers are excited by the opportunities of an unfinished property. We may see a few of these properties come back to market, however surprisingly it was, the investors won out in all three auctions.”
Amber Werchon, director Amber Werchon Property
2016 was an extremely positive year for the Sunshine Coast property market. In a review of land sales it is clear there has been increased interest and record sales in the prestigious land market; for example, waterfront development; ‘Entrance Island’.
These level half acre blocks located in a private and secure gated community bring a whole new meaning to waterfront living on the Sunshine Coast.
Achieving an average sale price of more than $1m per block, reflects the dramatic increase in buyer confidence, that has been driven by the positive economic conditions on the Sunshine Coast and the impact of the large infrastructure projects currently underway.
These include the $1.8 billion Sunshine Coast University Hospital (only 700m from Entrance Island itself), surrounding health hub and Oceanside development, Maroochydore Town Centre and the proposed redevelopment of Maroochydore Airport.
Buyers are in awe of the lifestyle that Entrance Island provides with it’s prime location and a once in a lifetime opportunity to own level waterfront land within walking distance of the beach and one of the largest health hubs of the southern hemisphere.
With the Sunshine Coast University Hospital nearing completion and employing a total of 6,500 staff, we have seen a number of the Entrance Island blocks sold to health professionals moving to the area from Brisbane, North Queensland, Sydney and New Zealand. However, initially local buyers were attracted to the physical size of these level half acre lots starting at 2000sqm and the surrounding walkways, parks, bike-ways and recreational facilities, along with the lake where families can safely swim, sail, kayak, and enjoy all that coastal living has to offer!
With 17 original lots, only three remain.
While many purchasers have seen the potential for huge capital gain in such a prestigious development, and some are holding their blocks as an investment, construction is now underway on four lots allowing people to visualise their ideal lifestyle on Entrance Island. There has already been one re-sale on the Island which was a recent record sale for Birtinya waterfront.
According to the latest REIQ Quarterly Market Report, the Sunshine Coast has now been identified as one of the state’s key growth regions, with significant ongoing infrastructure projects injecting money into the local economy and creating employment opportunities; 2017 is shaping up to be an even better year.
Vicki Stewart, principal Stewart Property
Kawana Island, right in the heart of the Sunshine Coast, has become one of our favourite areas to sell.
We have made some long-term friendships with both our buyers and sellers. What a fabulous part of the Coast to retire to or bring up your family.
We first began our association with Kawana Island when a well-known developer approached our office looking for help to move some apartments he’d had on the market for some time.
Utilising our in-house data base of qualified buyers as well as using print media and internet marketing, we had his properties sold in no time.
Since then he has come back to us again and again, and thanks to our success, other sellers have appointed us to sell their homes, and the ball is still rolling. Kawana Island has been a huge success story for us.
Homes on Kawana Island attract a lot of activity, and continue to sell well. Homes offering 4bed,2bath,2car, sell from $650,000 plus and stock levels are very low, resulting in the ‘days on market’ becoming less and less. In fact a good home, well presented and well-priced can sell within a fortnight.
Where we have seen the major activity has been in the apartment sales with some record prices being set.
To give you an example, in that time frame, we have sold
ST. KITTS DOUBLE BAY: We have had 23 units sales ranging in prices from $490,000 through to $1m and we’ve seen prices increase in that time by around 20%.
A majority of buyers are owner occupiers, as opposed to investors, which has been interesting, as they all offer 3,2,2, and a majority are waterfront.
LEEWARD APARTMENTS: We’ve completed seven sales, mostly to investors, ranging from $400,000 to $550,000.
We are seeing prices rise in Leward, more slowly, but in the right direction.
OCEAN REACH APARTMENTS: It’ss just coming into its own, the grounds are incredible and we are seeing more activity than ever, and when you consider you can buy a spacious 3,2,2 apartment on the water for the low to mid $500,000s you can understand why.
AZURE: Flourishing in the investor market with prices rising, sales in this complex range from $315,000 for 2,2, with a spacious balcony through to $510,000 for a townhouse with private courtyard.
ISLAND QUAYS: Popular with owner occupiers and investors, we’ve completed seven sales here with prices from $480,000 to $600,000 for a 3,2 waterfront apartment.
The facilities feature a tennis court and pools. The complex is also pet friendly so you can see why this complex is so popular.
In total, in that time frame, we have sold over $25m worth of stock, just in apartments, and are currently negotiating three more.
Kawana Island is well worth looking at as your preferred part of the Sunshine Coast for living the perfect coastal lifestyle.
Greg Clarke of Ray White Mooloolaba
Unit properties on the Sunshine Coast in good locations are realising a resurgence in popularity compared to the previous four years.
Building appeal, location, views, and lifestyle are important factors for the genuine buyer.
Reducing the number of safe options for overseas holidaying and the lower value of the Aussie dollar, many people choose the Sunshine Coast as a holiday destination with not only the safety aspect, but also value for money. Resort managements are seeing strong growth and returns for their owners.
Increased interest and subsequent sales in the unit market shows an increase of between 5% and 10% in volume and price.
I’ve recently sold six units in Sebel, Maroochydore from $510,000 for a 2,2,1, through to $700,000 for a 2,2,2, penthouse.
Three units in Aqua Vista sold for between $645,000 and $865,000 a piece.
While we’ve seen less than satisfactory results in the past, we now view a positive forecast with the number and value of recent sales in buildings such as the Sebel and Aqua Vista.
I currently have a rarely opportunity to purchase a penthouse with private rooftop deck and spa. High occupancy rates for those looking for an investment property are evident, with the unit unavailable for an inspection until January 14 due to holiday bookings.
Originally Published: http://www.ipswichadvertiser.com.au/
Experts warn of ‘debt bomb’ as housing downturn worsens
That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.
According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.
If that happens, it would also cause an economic “catastrophe”.
Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.
“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.
“That’s higher than any other country in the Western world by a long way.
“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”
Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.
“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.
“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”
He said foreclosures had also risen by 600 per cent in the region.
“The mortgage stress is definitely being felt especially in this area,” he said.
60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.
What does a million dollars buy in Aussie capital cities?
Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.
“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.
But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.
However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.
One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.
Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.
And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.
That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.
“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.
Related article: Experts warn of ‘debt bomb’ as housing downturn worsens
Australia’s best place to invest is here in Queensland
EXPERTS are hailing Queensland’s Sunshine Coast as the hottest place in the nation to invest in property right now.
A lack of housing, a tight rental market and a rapidly growing population mean supply is failing to keep up with demand in the region – creating perfect conditions for investors.
Leading real estate industry figure John McGrath said the Sunshine Coast presented one of the best opportunities for capital growth because of its liveability, affordability and future economic prospects.
“From an investment point of view, where in Australia right now can you invest your dollar and get better returns than the Sunshine Coast or southeast Queensland?” Mr McGrath said.
” I don’t think there is a location that’s going to offer better investment growth in the future.”
His views are echoed by prestige property agent Tom Offermann of Tom Offermann Real Estate, who claims the Sunshine Coast “is on the cusp of the highest growth period in its history”.
“This is being driven by a raft of infrastructure projects that are delivering exceptional lifestyles, which in the past required some compromises for people coming from big cities,” Mr Offermann said.
The region is in the midst of an infrastructure boom, with billions of dollars being invested in upgrading and creating new facilities.
Work is underway on a new runway at the local airport, which is set to become international by 2020, and a new hospital and health precinct has recently been established.
“These are game changers,” Mr Offermann said.
“Astute property investors who recognise what is happening, and take action to secure the best located property they can afford, will reap the rewards of their foresight.”
Local agents say the region is crying out for more investment properties to cater to the needs of the increasing population.
According to demographer Bernard Salt, the Sunshine Coast’s population of around 298,000 residents is set to rise to 550,000 in 23 years, which will require more than 100,000 new homes to be built.
The latest Real Estate Institute of Queensland figures show the rental vacancy rate on the Sunshine Coast is just 1 per cent, with Caloundra having the tightest vacancy rate in the state at just 0.5 per cent.
It’s good news for investors, who are currently achieving healthy rental returns of around 5 per cent.
In its recent report, Herron Todd White noted an increase in investor activity in the Sunshine Coast market, with the sub $350,000 unit and townhouse sector particularly popular.
“It’s not uncommon to see townhouses selling for $220,000 attracting a rental of $280 per week – over 6.5 per cent gross return,” the report said.
For investors looking to capitalise on the growth in the region, McGrath Real Estate founder John McGrath said now was the time to get into the market.
“I think there is a great opportunity, in particular right now, because we’ve seen Sydney and Melbourne have shown unprecedented growth over the last five or six years,” he said.
“Now those markets have come to a plateau and a lot of people are going to be saying; ‘Do we take our profits and reinvest them, or, in fact, do we move up north and get better value for money?’
“So, I think right now there’s a terrific window of opportunity where people can capitalise on the immense growth we’ve seen in the southern states.”
Reed & Co director Adrian Reed the increased international access the new airport would provide would likely change the profile of buyers in the Noosa region.
“We’re currently seeing an increase in Australian expats buying back into the market, but if accessibility becomes easier, we’re expecting a more aggressive upward trend in high-end premium property,” Mr Reed said.
He said that lending restrictions and the impact of the banking royal commission had had little impact on the region’s prestige market.
“The vast majority of deals I’m doing at the top end of the market are cash,” he said.
“They’re self funded retirees who’ve already sold their principal place of residence.”
Owner/builder Paul Saunderson, who is selling his home in Noosa Heads through Peter TeWhata of Tom Offermann Real Estate, said the local market was “out of control at the moment”.
“There are houses getting knocked down and new dwellings being built everywhere,” Mr Saunderson said.
He said the contemporary, four-bedroom, three-bathroom property at 20 Sanctuary Ave, Noosa Heads, which he lived in with his wife and two children, was attracting strong interest from interstate and overseas investors.
“It’s a good investment opportunity because it’s been valued as holiday letting, which is anywhere from $6000 to $10,000 a week during peak season,” Mr Saunderson said.
Jamie Smith of Century 21 On Duporth in Maroochydore said he’d never seen so much activity in the Sunshine Coast property market, with strong interest from both local and interstate investors.
Mr Smith said many investors were looking to buy in the less expensive suburbs, where new housing developments were popping up, such as Caloundra, Sippy Downs, Birtinya and Mountain Creek.
“It’s definitely unprecedented in terms of what we’re seeing on the Coast,” he said.
But Mr Smith said investors who were not already in the market needed to act fast.
“If you were here three years ago, you could have bought between $400,000 and $500,000,” he said.
“Now you’re looking at anywhere from $600,000 plus, so it’s definitely changed a little bit.”
SUNSHINE COAST SUBURBS FOR BEST CAPITAL GROWTH
Suburb Property type Median price 12 month change in price
Minyama House $1.31m 45.8%
Kenilworth House $399,000 40%
Yandina Creek House $820,000 32.3%
Beerwah Unit $375,000 25%
Mount Coolum House $676,200 23.2%
Mapleton House $543,250 21.3%
Mudjimba House $739,500 20.7%
Peregian Springs Unit $475,200 18.8%
Battery Hill House $579,500 18.4%
Montville House $707,500 17.9%
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
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