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NSW Qld Vic

PROPERTY EXPERTS REVEAL WHERE TO INVEST IN 2021

Despite all the pandemic-induced drama, 2020 turned out to be a pretty stable year for property prices in Australia. Most experts believe that this new year will shape up to be stellar for real estate. Property Investment Professionals of Australia (PIPA) chairman reinforced that 2021 will be a much better year than 2020, especially for the residential market, as capital cities are expected to see a higher rate of value increases.

Furthermore, historically low interest rate and pent up transactional energy are likely to provide a boost to the property market early in 2021, as this will continue to push the prices on established residential properties up.

If Australia succeeds to keep COVID contained in 2021, the property market will look to be a promising year, especially on the back of record low interest rates and positive sentiments, Property investors Council of Australia’s chairman Ben Kingsley.
Here are where the experts are highly recommending to invest in 2021:

Lifestyle Towns

Regional and lifestyle property markets have shown some very strong results. Demand has been outstripping supply by some margin and this has resulted in short marketing periods, properties sold prior to auction as well as some very strong auction results. Locations such as the Sunshine Coast and Adelaide Hills are stands outs with the advantages of rural lifestyle and good value attracting buyers.
CoreLogic’s “Best of the Best” report revealed Sunshine Beach, a suburb of Noosa in Queensland, had the best performing house prices over the past 12 months.

In just one year Sunshine Beach’s house prices rose by an eye-watering 27.6 per cent, the largest capital gain in one year of any suburb in the country.

CoreLogic’s Head of Research Australia, Eliza Owen said “Sunshine Beach on the Sunshine Coast has seen the highest annual capital growth in houses nationally, compared with 2019 when St Kilda in Melbourne saw the highest housing growth.”

Regional Victoria

Areas such as Geelong, Ballarat and Bendigo are likely hotspots due to affordability and lifestyle factors. Despite the ongoing pandemic, regional Victoria house prices increased by 5.5 per cent. CoreLogic research director, Tim Lawless said the hottest markets were only a few hours drive from major capital cities, such as Geelong, Ballarat, Sunshine Coast, Newcastle, Wollongong and Daylesford. “They are leading the pack in terms of the strongest growth”.
“People can have the best of both worlds and live in a marketplace with lifestyle benefits and lower prices, as well commute back to big cities if they need to,” Mr Lawless said.

Greater Byron Region

As mentioned in our last email, the Greater Byron Region is set to boom in 2021. Increases in buyer’s demand were across the Greater Byron Region in locations such as East Ballina (185%), Lennox Head (150%) and Bangalow (145%).

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Qld

SUNSHINE COAST HAS BEEN ONE OF THE BEST PERFORMING PROPERTY MARKET IN AUSTRALIA

“The Sunshine Coast’s rental market is seeing huge demand mainly due to shortage of stock”

The Sunshine Coast is emerging as one of Queensland’s strongest residential property markets, outpacing both Brisbane and Gold Coast as an influx of sea-changers to the region bolsters house prices.

The Sunshine Coast has recorded consistent dwelling price growth for both houses and units, while simultaneously, population growth in the region is at its highest level in almost a decade, CBRE research shows.

The Sunshine Coast’s median house price increased by 3.8 per cent to $622,500 in the year to June 2020, and its median unit price recorded 2.4 per cent growth to $420,000.

CBRE notes that the annual rates of growth were higher than the Gold Coast—3.1 per cent and 1.7 per cent respectively—and the Greater Brisbane area, which grew 1.3 per cent and 1.7 per cent respectively.

Key hotspots across the Sunshine Coast and Gold Coast have seen price hikes of up to 25 per cent, fuelled by low interest rates and the promise of a laidback lifestyle free of pandemic pain.
Domain senior research analyst Nicola Powell said buyers were increasingly being attracted by south-east Queensland’s affordability and lifestyle and this was likely to be accelerated by the current health crisis.

Investors in the Sunshine Coast property market are still active with market sentiment having improved which has in turn instilled confidence in the marketplace. The main driver of this sentiment is the Sunshine Coast lifestyle and the major infrastructure projects across the Coast. With interest rates at an all-time low, investors are looking to property as a way or increasing their returns. Across the Coast, gross yields normally tend to range between four and 15 per cent which reflects the relative risk on investment.

Standard dwellings on the coast typically show a return of four to five per cent which is primarily driven by first time investors. We have seen an increase in interstate investors throughout the Sunshine Coast who have been purchasing and constructing dual occupancy style properties which generally provide a higher yield of up to 6.5 per cent. Slightly higher yields can also be achieved through the hinterland townships with properties comprising three to five flats achieving yields in the seven to eight per cent range. Typically these properties are older with ongoing maintenance and additional management fees required.

Internal migration for the Sunshine Coast is 20% higher than any other SEQ region and while the raw number is about 1,000 than the Gold Coast, the Sunshine Coast is half the size of the Gold Coast and so, in effect, is experiencing double the growth rate.

The Sunshine Coast has more immediate household demand in raw number than Moreton Bay, Ipswich and Logan, plus the Sunshine Coast’s current undersupply rate and supply constraints are the greatest in SEQ.
Migrants to this region are highly employable and have a better financial position with the majority coming from the UK, South Africa and Canada. High net-worth relocators from New Zealand continue to increase in number, however as their visa requirements are different, they aren’t included in the above numbers.

In essence the Sunshine Coast has:

  • More people needing houses TODAY
  • Less ability to supply those houses
  • People coming who desire smaller households, increasing the demand for smaller product
  • More jobs to attract those people
  • Better economic circumstances (more affordability) of those coming
So, when it comes to people, the Sunshine Coast is getting more, wanting more housing, with more affordability than the rest of SEQ (raw numbers or per capita rate). This is where the opportunity is at. This is where the future is at.
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Qld

BRISBANE PROPERTY MARKET UPDATE

RECENTLY, THERE HAS SEEN A HUGE TURNAROUND IN BUYER SENTIMENT IN BRISBANE. IT SEEMS THAT EVEN MORE BUYERS HAVE ENTERED THE MARKET IN THE LAST MONTH, AND THIS IS CONTRIBUTING TO THE VERY HIGH DEMAND THAT IS EVIDENT AROUND THE CITY.

Last month, we reported that Westpac Bank updated its property forecasts, with Brisbane prices tipped to surge 20 per cent between 2022 and 2023. Since then, consumer confidence has surged, returning to an eight-month high. It is well known that consumer confidence is a key driver for housing markets across Australia. With the announcement of further rates cuts, we may now see a further surge in housing market activity.

The Domain Buyer Demand Indicator has shown that houses remain a firm favourite for prospective home hunters, with demand rising post-lockdown in Brisbane, and it remains significantly elevated compared with last year. Unit demand has been sliding since late May although it also remains slightly higher than last year, with investment grade stock likely to be impacted most.  

At the moment, the Brisbane real estate market is moving at different speeds. We have the housing market, and the high-end unit market (as a small segment of the unit market as a whole) that are incredibly strong, but the inner-city one- and two-bedroom standard apartment markets are suffering. It is unlikely that we will see a recovery until borders open and international students return. 

In the Brisbane Housing Market, we saw median values for the greater Brisbane region increase 0.6 per cent across the month of September 2020. The current median value for a Brisbane house is now $564,531.  Combined with last month’s house price results for Brisbane, this is a 1 per cent increase across the last two months. On a $500,000 property, this means it will cost a buyer $5,000 more to buy, and on a $1,000,000 property it is now $10,000 more to buy in the same area than it was two months ago.

Brisbane rental market movements

The vacancy rate in Brisbane as a whole fell again from 2.1 per cent at the end of August to 2.0 per cent at the end of September. There are still many areas in Greater Brisbane where vacancy rates are extremely low. The table below highlights where vacancy rates across Brisbane sit at the end of September 2020.

What are we seeing on the ground across Brisbane?

The number of people out at open homes every Saturday has continued to grow throughout October. With listing volumes still lower than 12 months ago, there is fierce competition for quality properties throughout Brisbane.

Demand is very strong. I would argue the strongest that we have seen in more than a decade. There are many reasons for this.

The most recent Herron Todd White Residential Month in Review, it states:

“Money has never been cheaper, and for those with the ability to access it, the opportunity is obvious.” 

An example of a recent auction in Brisbane was the property at 20 Sturt Street Kedron. This was vacant land in Kedron, which is 11km to the north of the Brisbane CBD. There were 39 registered bidders and the vacant 607 sq m block sold for $1,155,000.

From our own “on the ground” experience, we can say that there is not a single property that we have been able to buy that has been listed on the market, that has not been a multiple offer situation after the first open home. Every property we have considered for our client has had high competition.

We are now also seeing properties sell outside of our appraisal range based on previous comparable sales in the area. This shows how strong the current market is, with properties selling between 5 and 10 per cent over the highest end of our appraisal range. This is critical for buyers to understand, otherwise they will simply keep missing out.

There is still off-market activity, and this is generally less competitive. Obviously, this is one advantage of working with professional buyer’s agents who have an extensive agent network.

There is less fear in Brisbane now about property prices falling, so purchasers are eager to act. Interstate migration is also boosting sales, with property buyers looking to secure a home before relocating to Brisbane. There is a sense of anticipation building in Brisbane that we will see high volumes of interstate arrivals once the borders reopen for everyone. Given the changes that COVID-19 has had on all of us, many people are seeking a great lifestyle, which Brisbane provides, while having the ability to work more remotely. 

The dominant buyer group is still the owner-occupier in Brisbane, although we have definitely seen investor activity start to rapidly pick up again. Lending has spiked and owner-occupier lending is now at historical highs, excluding refinancing. First home buyer numbers are up 70 per cent year-on-year in Queensland, according to the most recent ABS lending data. Investor lending also rose 5 per cent in September, but it remains low overall. 

What does the future of Brisbane looking like?

The future for the Brisbane housing market looks very bright. We expect the current price growth to continue given the sheer number of buyers currently in the market ready to buy. With tight vacancy rates throughout most areas in Greater Brisbane, we also see great investment opportunities for those who have been sitting on the sidelines waiting for the worst of the pandemic to pass.

The high-density unit market is still subject to further headwinds – especially in the inner city. With elevated vacancy rates, investors without a tenant in place will certainly feel the impact on their returns. Also with downward pressure on prices, the immediate future looks bleak.

Queensland now has a re-elected Labor government, so there is more certainty than this time last month when we were still in the lead-up to our state election. With the promise of jobs, and more jobs, let’s hope they get it right! With an improving economy, together with the creation of more jobs in the months ahead, this will have further positive effects on the Brisbane market.

Article written by Melinda Jennison – Smart Property Investments

 

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NSW Property Information Qld Vic

AUSTRALIA RETURNS – WHY YOU SHOULD LOOK BEYOND SYDNEY, MELBOURNE FOR YOUR PROPERTY INVESTMENTS

Melbourne and Sydney are undoubtedly the most popular cities in Australia. Melbourne attracts countless people into the city. Rich heritage structures, beautiful landscapes, high development and a great sporting culture make Melbourne an attractive proposition to shift base.

Travel guides will tell you that Sydney is the best city to visit in Australia. It’s home to the Sydney Opera House and the Sydney Harbour, two of the most popular tourist destinations in the country. The golden beaches of Sydney have their own set of loyalists from all across the world. Sydney is also regarded as the financial hub of the Pacific down under.

Education acts as a big pull for families in such cases. University of Melbourne and Deakin University are among Victoria’s best places to study. University of New South Wales and University of Sydney rank up there among the most sought after universities. The sheer reputation of these institutions attract not just local Australians but also overseas students into the two big cities.

The rate at which Melbourne and Sydney have grown is twice as much as other cities in Australia. A flourishing economy, good infrastructure and friendly interest rates have seen people flocking towards Sydney. The real estate prices in the city of Sydney has reached a stage where buying property in the city costs much more money. In fact, it features in the top 10 list of most expensive real estate properties in the world.

So does that mean that Sydney and Melbourne have reached a point of saturation? Property experts believe that the market is softening. Flatlines are appearing because of increased real estate prices which are driving people to settle outside of Sydney. As such, it isn’t a problem given that Sydney has a well-connected transport system and Australia has the whole continent to themselves.

Explore the Untapped Potential of Capital Cities

Property experts have advised investors to diversify their portfolio and put their money and faith in booming markets. Adelaide, Brisbane, Hobart and Canberra – major Australian capital cities have been touted to grow at a rapid pace.

Adelaide and Canberra have emerged as top contenders in the property market. Sydney may have seen flatlines in property growth but Canberra, for instance, has so many takers at this stage. It’s the national capital, a seat of all political activity which results in people actively moving out.

The Brisbane Boom

Reports suggest that the value of real estate residential housing in Brisbane has seen a sharp rise. Rapid construction has resulted in an oversupply in available housing. The real estate prices remain affordable for people to settle in. And it’s not just residents or fellow Queenslanders, a lot of inter-state migration has started taking place in Brisbane.

Brisbane is witnessing a lot of migration into the city which balances the oversupply of housing. With everyone earning largely the same levels of income, the time seems right to invest now in Brisbane rather than Sydney and Melbourne.

BIS Shrapnel expects median house prices in Brisbane to increase by 7% come June 2019. Brisbane has seen a jump in the number of IT and Finance firms setting up shop in the city and is one of Australia’s fastest growing economies.  After Sydney and Melbourne, it’s the 3rd most visited city in Australia by tourists. The University of Queensland, Griffith University and Queensland University of Technology are prestigious universities that are attracting overseas students too.

Adelaide and Hobart are quieter cities but like Brisbane, have tremendous untapped scope for growth. Any fears of Sydney and Melbourne reaching flatlines may not be fully true as studies indicate that property buyers have been making close to $100,000 within 24 months of purchase and leasing out of property. But cheaper investments can always be made in the developing cities.

If you are looking to invest in Australia’s real estate, look beyond Melbourne and Sydney. There are more investment havens to explore. With an increasing number of interstate and overseas migrations taking place, Australia presents a great investment opportunity in real estate

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NSW Property Information Qld

THE SEACHANGE EFFECT AND COUNTER-URBANISM

Full fathom five thy father lies:
Of his bones are coral made:
Those are pearls that were his eyes:
Nothing of him that doth fade
But doth suffer a sea-change
Into something rich and strange.

– Shakespeare, The Tempest 

When Shakespeare wrote the term ‘sea-change’, he was clearly referring to the dramatic transformation of one of his characters by the sea. Stemming from this, we have adopted this same term into our vocabulary to mean a deep transformation caused by any agency. We have all grown up consuming popular media like television shows, movies, magazines and blogs. These give us a chance to explore different values and ideals and in a subtle way, end up influencing our life choices.

A great example of the media’s influence on consumers is the effect the show SeaChange had on Australian migration ever since it ended in 2000. For those who don’t know, the premise of this show is the protagonist’s search for her SeaChange from urban life. After witnessing her life crumble around her in the city, she moves her family to a small fictional seaside town to start anew. This inspired many Australians to follow suit and is still seen as a common occurrence, now more than ever.

The SeaChangers

Increasingly, the SeaChange phenomenon, which was once linked to retirees, now includes the younger generation. Since coastal regions are popular with local and international visitors, the tourism industry in these areas is thriving. The working population is attracted to the jobs created by this and are happy to leave behind their stressful lives in the city for a peaceful and well-balanced life by the coast. Other migrators include alternate lifestylers, specialised service providers and more.

The reason for the change

“I think the notion of SeaChange is more relevant now than it was 20 years ago,”

 – David Mott, ITV.

The concept of counter-urbanism has been explored globally for decades. Most Australians live in an urban setting, but many seem to crave the great escape from concrete and glass to blue skies and the sea. Thus, SeaChangers are choosing the lifestyle afforded by small coastal settlements over stressful city life. This may be because of a number of economic, aesthetic, and environmental factors like:

  • Better housing
  • Debt via mortgage
  • Work-life balance
  • Shorter commutes
  • Lesser crime rate and risks
  • Enhanced family life
  • Safe environment for raising children
  • Pleasant climatic conditions
Case Study: Bellarine Peninsula

The TV show had an enormous effect on putting coastal townships in the Bellarine Peninsula on the map. Although the location in the show was fictional, it was filmed in these small villages which have resulted in SeaChangers seeking to settle down here.

This has greatly affected the real estate prices and the values have shot up tremendously. This happened gradually during the length of the show, doubling up between the 3 years it was on the air. But this rise did not end with the show. The real estate prices have been going up steadily ever since, and today, the median prices have increased by 484% in the 18 years to $900,000.

Although the towns retain their original charm, the migration has added a modern culture to this area, claim the local real estate agents. By keeping the SeaChange dream alive, the rise in property prices hasn’t stopped people from flocking to these idyllic seaside towns.

The SeaChange Effect
Categories
Qld

BRISBANE: RISING PROPERTY MARKET

Brisbane may have laid low for a while, but things are about to take a great turn for the capital of Queensland in 2019. Despite the lack of a good run over the last few years, the public sentiment is about to change and soon enough it will be heralded as one of today’s best-performing markets. While Sydney and Melbourne recover from the descent after their respective property booms, Brisbane has shown a growth, thanks to its affordability, lifestyle and population growth.

Experts have stated that while the boom may not echo similar trajectories experienced by Sydney and Melbourne, this kind of ‘slow and steady’ growth is much better. For starters, investments in Sydney and Melbourne at this point, may not be advisable as they have already reached their pinnacle and are now on a decline. Meanwhile, Brisbane has better rents, low unemployment rate and also a number of infrastructure projects in the pipeline that all work in its favour. Let’s take a broader look at why Brisbane is the market to watch out for.

Due to increased property prices in the southern states, Queensland is once again seeing a stronger population growth than the rest of the country. As everyone knows, population growth is a key driver for property markets. Another thing working for Queensland is its great employment rates. At 4.6 percent, it had the strongest employment rate in the country last year which is growing month on month at an unvarying pace.

Brisbane’s median apartment value in 2018 is only 5 percent higher than it was in 2008. Meanwhile, Sydney’s and Melbourne’s are up 88 percent and 53 percent respectively. And while there might be a decline in the number of apartments, developers are making sure that these apartments meet high quality standards in order to stand out from each other. The lack of low-interest rate driver and the flat income ensures that Brisbane will grow only at 1 or 2 percent but will still stay above the herd when it comes to growth prospects.

The above figures clearly indicate that as compared to other cities, Brisbane is the only one that is showing a growth on all counts – week, month, year to date and 12 months.

There are also some interesting developments to watch out for in Brisbane like the $3.6 billion Queens Wharf development, the Howard Smith Wharf precinct, and Cross River Rail project. These will ensure exponential growths for regions in their vicinity. Interstate migration particularly from New South Wales, will also help increase demand and facilitate economic growth in the state. Some of the suburbs to watch out for include Thornlands, Victoria Point, Wellington Point & Redland Bay.

In conclusion, the values of units and houses continue to be on the rise in Brisbane, breaking free of the defying downturn of Australia’s property market.