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/
Negative gearing changes will affect us all, mostly for the better
Don’t have a negatively geared investment property? You’re in good company.
Despite all the talk about negatively geared nurses and property baron police officers, 90 per cent of taxpayers do not use it.
But federal Labor’s policy will still affect you through changes in the housing market and the budget. Here’s what you should know.
Labor’s negative gearing policy will prevent investors from writing off the losses from their property investments against the tax they pay on their wages. This will affect investors buying properties where the rent isn’t enough to cover the cost of operating the property, including any interest payments on the investment loan.
Doesn’t sound like a good investment? Exactly right: negatively gearing a property only makes sense as an investment strategy if you expect that the house will rise significantly in value so you’ll make a decent capital gain when you sell.
The negatively geared investor gets a good deal on tax – they write off their losses in full as they occur but they are only taxed on 50 per cent of their gains when they sell.
Labor’s policy makes the tax deal a little less sweet – losses can only be written off against other investment income, including the proceeds from the property when it is sold. And investors will pay tax on 75 per cent of their gains, at their marginal tax rate.
Future property speculators are unlikely to be popping the champagne corks for Labor’s plan. But other Australians should know that there are a lot of potential upsides from winding back these concessions.
Limiting negative gearing and reducing the capital gains tax discount will substantially boost the budget bottom line. The independent Parliamentary Budget Office estimates Labor’s policy will raise about $32.1 billion over a decade.
Ultimately, the winners from the change are the 89 per cent of nurses, 87 per cent of teachers and all the other hard-working taxpayers who don’t negatively gear. Winding back tax concessions that do not have a strong economic justification means the government can reduce other taxes, provide more services or improve the budget bottom line.
Labor’s plan will reduce house prices, a little. By reducing investor tax breaks, it will reduce investor demand for existing houses.
Assuming the value of the $6.6 trillion property market falls by the entire value of the future stream of tax benefits, there would be price falls in the range of 1 per cent to 2 per cent. Any reduction in competition from investors is a win for first home buyers.
Existing home-owners may be less pleased, especially in light of recent price falls in Sydney and Melbourne. But if they bought their house more than a couple of years ago, chances are they are still comfortably ahead.
And renters need not fear Labor’s policy. Fewer investors does mean fewer rental properties, but those properties don’t disappear – home buyers move in, and so there are also fewer renters.
Negative gearing would affect rents only if it reduced new housing supply. Any effects will be small: around 90 per cent of investment lending is for existing housing, and Labor’s policy leaves in place negative gearing tax write-offs for new homes.
All Australians will benefit from greater stability in the housing market from the proposed change. The existing tax breaks magnify volatility. Negative gearing is most attractive as a tax minimisation strategy when asset prices are rising strongly. So in boom times it feeds investor demand for housing. The opposite is true when prices are stable or falling.
The Reserve Bank, the Productivity Commission and the Murray financial system inquiry have all raised concerns about the effects of the current tax arrangements on financial stability.
Negative gearing would affect rents only if it reduced new housing supply.
And for those worried about equity? Negative gearing and capital gains are both skewed towards the better off. Almost 70 per cent of capital gains accrue to those with taxable incomes of more than $130,000, putting them in the top 10 per cent of income earners.
For negative gearing, 38 per cent of the tax benefits flow to this group. But people who negatively gear have lower taxable incomes because they are negatively gearing. If we look at people’s taxable incomes before rental deductions, the top 10 per cent of income earners receive almost 50 per cent of the tax benefit from negative gearing.
So you shouldn’t be surprised to learn that the share of anaesthetists negatively gearing is almost triple that for nurses, and the average tax benefits they receive are around 11 times higher.
Treasurer Josh Frydenberg says aspirational voters should fear Labor’s proposed changes to negative gearing and the capital gains tax.
But for those of us who aspire to a better budget bottom line, a more stable housing market and better opportunities for first home buyers, the policies have plenty to find favour.
Revealed: The top 10 suburbs to buy a bargain home and reap long-term capital growth returns – but experts warn there’s a catch
The top 10 suburbs for buying a bargain home have been revealed.
The top two on the list were Norlane and Lovely Banks, two northern suburbs in Geelong, Victoria, while the remaining eight all come from Queensland.
Hollywell in the Gold Coast was named as the best Queensland suburb for an affordable home with long-term capital gain, according to property researcher RiskWise.
The Gold Coast suburb, located 70km south of Brisbane’s CBD, is close to shopping centres, good schools and the beach.
Experts have warned buyers not to confuse a ‘bargain’ property with a ‘cheap’ one.
The coastal suburb also has many older properties which will have plenty of potential after renovation, according to realestate.com.au.
It has a median house price of $786,614, according to property data researcher CoreLogic.
Mount Ommaney, Sinnamon Park and Gordon Park in Brisbane also make the list, followed by Gaven on the Gold Coast and Doonan in the Sunshine Coast.
Mount Ommaney, an outer suburb located 14 kilometres south-west of Brisbane’s CBD, has a median house price of $852,729.
Sinnamon Park, also located south-west of the Brisbane CBD, has a slightly lower median house price of $747,272.
RiskWise’s list ends with Gordon Park, Stafford Heights and Twin Waters in Queensland.
All the suburbs listed had a median house price of $300,000 to $870,000, with Norlane having the lowest price at $370,931 and Doonan with the highest at $871,189.
RiskWise chief executive Doron Peleg warns the public that a ‘bargain’ house does not necessarily mean buying a ‘cheap’ one.
RiskWise listed down suburbs where capital growth was expected to increase steadily over the years.
‘It’s more about knowing where to buy for long-term capital gain,’ Mr Peleg said.
‘Sure, there are a lot of well-priced houses out there, but if they are not expected to grow in value down the track, then they really aren’t the best buy.
‘These (Queensland) suburbs, which all enjoyed capital growth of 13 per cent of the past 12 months, are expected to continue to do well as they have a number of things going for them.
‘For starters, they are relatively affordable and all within 100km of Brisbane which means, provided there is a good public transport and road infrastructure, commuting to work is not too much of an issue’.
Property Experts Reveal Surprising Areas Investors Are Snapping Up
We all know Sydney’s property market has taken hit after hit recently — but there are other lesser-known areas that are experiencing a sudden property boom.
That’s according to Australian real estate experts, who claim that while investors may have deserted Sydney and Melbourne, their attention has turned to other regions across the country.
According to Daniel Walsh of investment buyer’s agency Your Property Your Wealth, investment activity has now firmly shifted to Queensland.
“Net migration has now overtaken Melbourne due to the affordability that Brisbane has to offer,” he explained.
“We’re also seeing rising demand particularly in the housing sector in southeast Queensland where yields are high and jobs are increasing due to the amount of government expenditure around infrastructure which is attracting families to the Sunshine State.
“With Brisbane’s population growth at 1.6 per cent and surrounding areas like Moreton Bay at 2.2 per cent, the Sunshine Coast at 2.7 per cent and Ipswich at 3.7 per cent, we are forecasting that Brisbane will be the standout performer over the next three to five years.”
Realestate.com.au chief economist Nerida Conisbee agreed, saying Sydney investors especially had started to turn their attention north.
“Interest is strong in the Gold Coast across the board although there’s more action on the south side in places like Tugun and Burleigh Heads,” she said, adding there was also a notable trend towards Tasmania, Adelaide and pockets of NSW.
“In Tasmania, most activity is definitely taking place in Hobart, but it has shifted — a lot of the action was in the inner city, but it’s now happening in the middle and outer ring suburbs, as well as in Launceston.
“Tweed Heads and Byron Bay (in NSW) have also had strong price growth at the moment,” she said, adding that in Sydney, trendy inner-city suburbs like Paddington, the premium end of town and areas like Winston Hills in the city’s west were defying the downward trend.
Ms Conisbee said long-neglected Adelaide was also finally booming after recently hitting the highest median house price ever recorded, largely driven by jobs and economic growth off the back of defence contracts, the announcement of the new Australian Space Agency and other investment in the area.
“Inner Adelaide, beachside and the Adelaide Hills tend to have the most activity but there’s also quite a lot of rental demand in low-cost suburbs so we’re expecting to see a bit more investment there in those really cheap suburbs over the next 12 months,” she said.
“There you can get houses for $250,000 so for an investor, it’s a relatively low cost in terms of outlay and the area is seeing really strong rental demand which means you’re more than likely to get tenants, so for investors it’s a really attractive area.”
Mr Walsh said Sydney still remained a solid investment option in the long term — but stressed it was just not the right time to buy in the city due to its market cycle as well as lending constraints.
“While property prices in Sydney have softened by about 9 per cent this year, they are still high, which means it’s not an affordable option for many investors,” he said, noting the city’s high buy-in prices coupled with relatively low rents made the yields quite unattractive.
“At this point in time, the high costs of entry as well as holding costs make it a location that should be avoided — but not forever,” he said.
“The thing is, Sydney is still Sydney, which means that it will always be in demand.
“Its population is forecast to grow by some three million people in the decades ahead, plus it remains our nation’s economic engine room.”
He said the entire NSW economy remained “robust” with unemployment falling to 4.4 per cent last year, with Sydney’s major infrastructure program also proving there was “much to be positive about” in Sydney.
“Sydney homeowners and investors who bought a number of years ago are still well ahead because they chose the optimal time to buy and they remain focused on the future,” he said, adding the optimal time to re-enter the market probably wouldn’t be for at least another year or two.
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