Month in-review-october-2016-residenital

National Property Clock
October 2016
Houses
Entries coloured orange indicate positional change from last month.
Liability limited by by a scheme approved under Professional Standards
Legislation. This scheme does not apply within Tasmania.
This report is not intended to be comprehensive or render advice and neither
Herron Todd White nor any persons involved in the preparation of this report,
accepts any form of liability for its contents.
Peak of
Market
Approaching
Peak of Market
Rising
Market
Start of
Recovery
Bottom of
Market
Starting to
decline
Declining
Market
Approaching
Bottom of Market
Dubbo
NSW Central Coast
Newcastle
South West WA
Toowoomba
Perth
Darwin
Alice Springs
Gladstone
Mackay
Rockhampton
Bundaberg
Emerald
Townsville
Whitsindays
Brisbane
Hobart
Burnie
Devonport
Gippsland
Hervey Bay
Launceston
Mildura
Mount Gambier
Tamworth
Warrnambool
Adelaide
Melbourne
Sydney
Canberra
Albury
Ballarat
Bathurst
Bendigo
Cairns
Echuca
Mudgee
Orange
Wagga Wagga
Shepparton
Coffs Harbour
Gold Coast
Griffith
Horsham
Ipswich
NSW Mid North Coast
NSW North Coast
South East NSW

Peak of
Market
Approaching
Peak of Market
Rising
Market
Start of
Recovery
Bottom of
Market
Starting to
decline
Declining
Market
Approaching
Bottom of Market
National Property Clock
October 2016
Units
Entries coloured blue indicate positional change from last month.
Liability limited by by a scheme approved under Professional Standards
Legislation. This scheme does not apply within Tasmania.
This report is not intended to be comprehensive or render advice and neither
Herron Todd White nor any persons involved in the preparation of this report,
accepts any form of liability for its contents.
Melbourne
Ballarat
Dubbo
NSW Central Coast
Gold Coast
Newcastle
Brisbane
South West WA
Toowoomba
Perth
Canberra
Darwin
Alice Springs
Gladstone
Mackay
Rockhampton
Adelaide
Bundaberg
Emerald
Townsville
Whitsunday
Hobart
Albury
Burnie
Devonport
Cairns
Echuca
Gippsland
Hervey Bay
Launceston
Mildura
Mount Gambier
Shepparton
Tamworth
Warrnambool
Bathurst
Bendigo
Grifith
Mudgee
Orange
Sunshine Coast
Wagga Wagga
Sydney
Coffs Harbour
Horsham
Ipswich
NSW North Coast
NSW Mid North Coast
South East NSW

25
Overview
Sometimes you can get caught up in looking at how
markets are operating in the middle. This month,
we’ve asked our offices to highlight which of their
suburbs, sectors and price points are the strongest in
the current market, and which are the weakest.
By understanding how these two extremes are
performing, the whole picture of property in your
areas of interest comes into sharper focus.
Sydney
After several years of strong growth in all segments,
residential property in Sydney is currently
experiencing a mixture of activity throughout the
various pricing brackets.
Overall auction clearance rates were at 80.7% for
the week ending 4 September 2016, slightly up on
the previous week of 78.5%. While the clearance rate
is up compared to the 12 months prior (73.1%) total
auction numbers are down more than 30% from
1,075 to 720 (Source: Corelogic).
The total number of listings as at 4 September 2016
is 19,303, which is interestingly 1.3% up on the 12
months prior, however new listings at 6,522 are down
21.2% in this traditionally strong spring listing season
(Source: Corelogic).
Private treaty median price for houses in Sydney
currently sits at $860,000 and for units at $690,000
(Source: Corelogic), however the most popular price
points understandably vary widely between regions.
The eastern suburbs for example suggests that those
paying in the $1.5 million to $2.5 million range will get
a 2- to 4-bedroom semi or will pay $800,000 to $1.25
million for a 2- to 3-bedroom apartment.
Generally speaking the inner west will set you back
from $1.2 million to $2 million for a dwelling with
2- to 4-bedrooms or $500,000 to $800,000 for an
apartment with 1- or 2-bedrooms.
In the southern regions you will typically be looking
at an older style house with 3- to 4-bedrooms in
the most popular price bracket of $1 million to $1.5
million or a 2- to 3-bedroom unit in the range of
$600,000 to $800,000.
These price points are not only the most popular due
to being considered entry level for their respective
areas and property types but simply due to the sheer
volume of these styles of property. However it is not
necessarily these most favoured price points in terms
of transaction numbers that generate the most buyer
enquiry and competition.
While not always generating the same amount
of volume, it appears that the $2 to $3 million
price bracket for houses and $1.5 to $3 million
for apartments are in high demand currently
across these Sydney metropolitan areas. While
not necessarily accounting for the most in terms
of transaction numbers, demand is currently
outstripping supply leading to continually strong
sales results in these price brackets.
In the eastern suburbs a 3-bedroom terrace home
at 3 Tasman Street, Bondi recently sold for $2.32
million. On the border of Tamarama, the renovated
two level home with no parking sold after the first
inspection.
Other examples are a semi-detached 4-bedroom
dwelling on approximately 250 square metres with
modern interiors and a deep garden in neighbouring
Bronte at 20 Evans Street which achieved $2.67
million; and the ever popular Paddington delivered
a strong result at 16 Dudley Street with an attached
2-bedroom, 1-bathroom terrace home on 115 square
metres which sold at auction for $1.95 million.
Month in Review
October 2016
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26
3 Tasman Street, Bronte Source: realestate.com.au
Numerous examples also exist in the inner west
suburb of Strathfield. Popular for its central location
and proximity to schools and transport links, large
modern homes on an average 600 square metre
parcel now achieve in excess of $3 million.
The recent offering of an architect designed
5-bedroom residence at 45 Highgate Street resulted
in an auction result of $3.07 million.
Homes on larger parcels are extremely sought
after for their development potential or for the
opportunity to build the dream home on an oversized
lot. At 39 Broughton Road an original 4-bedroom full
brick residence sitting on 929 square metres with a
north east facing rear yard sold via private treaty for
$2.42 million.
Source: realestate.com.au
Prominent Sutherland Shire agent John Schwarzer
from Highland Property Agents has been
experiencing the highest volumes of enquiry from
buyers in the $2 to $3 million bracket looking for
larger modern houses and oversized apartments with
an average of between 35 and 45 buyer inspections
per property each week. Buyers looking at large
modern houses tend to be in their mid-30s to mid-
40s, while the down sizer market dominates the
apartment market in this price bracket.
A recent example is a re-sale of a new apartment in
the Breeze complex in Cronulla. 120 buyers inspected
the brand new 3-bedroom, 2-bathroom apartment on
level 4 and boasting ocean glimpses which sold prior
to auction for $2.54 million.
“Breeze” at Cronulla. Source: realestate.com.au
Month in Review
October 2016
Residential

27
At the opposite end of the spectrum off the plan
apartment sales appear to have been affected by
recent changes to the way foreign investors can
finance their purchases. Local investors have also left
the Sydney scene chasing more attractive returns
and stronger prospects for capital appreciation in
other states.
With many first time buyers priced out of the market
over the past few years, the combination of investors
leaving the market and an abundance of new unit
projects already underway and even more with
approval, may re-open the door of opportunity to get
into the Sydney market.
The south western Sydney property market has
been very active in the past 12 to 24 months, most
notably the developing new estates. While we
have seen prices within each estate vary, the most
active segment of these markets has been modern
dwellings between $650,000 and $800,000. This
sector of the market is characterised by established
dwellings comprising of 3- to 4-bedroom homes with
2-bathrooms and a good level of fit-out.
Gregory Hills
Sold June: $689,000
4-bedroom, 2-bathroom home on 400 square metres
On the market for 39 days
Example (Source: RP Data)
Oran Park
Sold September: $740,000
4-bedroom, 2-bathroom home on 489 square
metres
Month in Review
October 2016
Residential
The reason that this sector of the market is so active is affordability when compared to the greater Sydney
market. Local agents have reported high competition between interested sub-groups which include first home
buyers, upgraders and investors, combined with record low interest rates and developers controlling the level
of supply of new stock.
On the opposite end of the spectrum are properties in the $1 million plus price bracket in this region. While
sales indicate a gradual increase over the past 12 months, this sector of the market is typically not as active.
This market is solely characterised by owner-occupiers looking for an executive style dwelling. Typically
there is far less supply of these styles of homes as owners are buying these for a long term life style choice,
however when they do become available, agents are able to move this stock on fairly quickly.

28
Carnes Hill
Sold July: $1.15 million
4-bedroom, 2-bathroom dwelling on 500 square
metres
Sold June: $1.11 million
5-bedroom, 3-bathroom dwelling on 631 square
metres
Gledswood Hills
The off the plan unit market in the north and west is
also showing signs of struggle with many valuations
unable to match the individual purchase price
achieved in the stronger market of 2015. Examples
of this are in Parramatta, Wentworth Point and also
on the north shore in St Leonards. Whilst these
areas have a large proportion of units being built we
have also experienced this across the wider Sydney
market.
Prestige market
Prestige residential property in Sydney is generally
considered to represent those properties greater
than $3 million. Prestige homes are scattered
throughout the greater Sydney metropolitan area,
with the highest concentrations in the eastern
suburbs and eastern beaches, inner city and inner
east, inner west and the lower and upper north
shores.
The prestige market as a whole is currently
dominated by a lack of supply, which is most keenly
felt in traditional blue ribbon prestige areas such as
the eastern suburbs and lower north shore.
As a result, transaction numbers remain somewhat
subdued, although strong buyer demand for this
limited available stock level is translating into bullish
prices being achieved in some instances.
With an overall strengthening in the prestige dwelling
market combined with limited stock levels, the
Month in Review
October 2016
Residential
In the northern suburbs of Sydney a lack of quality stock has seen prices continue to improve. Although not at
the rates seen in previous years the $2 million to $4 million market continues to strengthen. The proximity to
transport, high quality schools and leafy well regarded suburbs are the large attractions for upsizing families.
Properties still achieving strong results have all the must have items ticked.
One price point or sector of the market that has slowed is the below average stock or dwellings with a variety
of issues, such as a busy road frontage, irregular shaped blocks or numerous building issues. These properties
are not achieving the premiums they once enjoyed in the stronger market some 12 to 18 months ago when there
was a level of panic in the market. This readjustment occurred in the later part of 2015 and early 2016 and some
vendors of below average properties are still trying to push for strong prices resulting in a property sitting on
the market for a long time and being discounted to meet the market. It appears the panic has well and truly
disappeared from the market with buyers unwilling to pay overs for an inferior product.

29
prestige apartment market has shown recent signs
of strong price growth primarily driven by the empty
nester buyers, who previously struggled to realise
adequate selling prices as a flow on from the impact
of the GFC.
While the prestige market is not stimulated as
strongly by the impact of interest rate fluctuations,
we do consider that savvy participants closely
watch the performance of global and local markets
and remain concerned about the under performing
and fluctuating equities market and moderate
performance of the local economy. Should stock
levels increase, we consider that buoyant market
conditions currently enjoyed in the prestige space
may weaken.
Canberra
2016 has been a strong year for the ACT property
market with most Canberra suburbs recording a
median price growth. Active sections of the market
include standard housing at the entry level price
points in some Canberra fringe and outer suburban
locations. Generally purchasers are looking for
large blocks within established suburbs that provide
access to good education and employment services.
Entry level price point for this style of housing
ranges between $450,000 and $550,000. Most
homes within this section of the market provide
3- and 4-bedroom accommodation, generally built
circa 1975 and in many cases are ready for some
renovation and upgrading.
Inner suburban locations in Canberra’s north and
south set a higher price point at generally $1 million
plus. This section of the market is also relatively
buoyant with families looking to move up the
property ladder with their second or third purchases.
Again block size, location and proximity to schools
and other services are the main drivers. This section
of the market ranges from $1 million to around $2.5
million. Market activity for property in the $3 million
plus price point is slower, although transactions have
still been recorded at the higher levels throughout
2016.
Price points in the medium density market range
from $250,000 to $300,00 for a 1-bedroom unit
recently constructed in a fringe Town Centre location
to $400,000 to $500,000 for a centrally located
unit in Canberra’s inner north or inner south. Both
investors and owner occupiers are active, however
strong supply within the medium density market has
had an impact on activity.
With similar results expected for next year, this year’s
hottest suburbs include entry level areas on the
fringe of the ACT right through to prestige suburbs in
Canberra’s inner south.
Domain senior economist Andrew Wilson says that
pinpointing the strongest suburbs is trickier in
Canberra than it is in other cities.
The nation’s capital is home to a compressed market,
with a higher entry point in affordable suburbs
and a lower entry point in prestige suburbs, when
compared to Sydney and Melbourne.
“When the market rises, it rises as a whole,” Dr Wilson
says. “Most suburbs will record price growth in 2016.”
Illawarra
As previously reported, the residential property
market in the Illawarra has gone from strength to
strength since 2013 with no particular price point or
location being left out. All purchaser types have been
affected, from first home buyers, investors focused
on returns and prestige buyers. Demand from buyers
has shifted south from Sydney into the Illawarra and
even the Shoalhaven has come out of a long market
slump.
PriceFinder reports that the most active price
ranges for house sales in the Illawarra during the
2016 financial year vary for the different Local
Government Authorities. The highest volume of
house sales in the Wollongong LGA was 420 sales
in the $600,000 to $700,000 range. The most
house sales in the Shellharbour LGA was between
$400,000 and $500,000 with 292 sales. Kiama’s
Month in Review
October 2016
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30
LGA has the highest range with 68 sales in the
$700,000 to $800,000 range while the Shoalhaven
LGA has the lowest with 756 house sales between
$300,000 and $400,000 (see below graph).
Affordability and availability is the key to the most
favoured price points. When a property is deemed
affordable it has the broadest market including first
home buyers and mum and dad investors. The more
common types of property will also become available
to the market more often, leading to higher volumes.
The least amount of activity in the Illawarra is, not
surprisingly, the prestige market. While this market
has been relatively strong over the past three years,
there is still a limited amount of activity, mainly due
to a limited amount of supply of this property type to
the market. Prestige properties in the Wollongong,
Shellharbour and Kiama LGAs tend to be in the $2
million plus price bracket while this drops to $1.5
million in the Shoalhaven LGA and is limited to beach
front or large acreage style properties.
Southern Highlands
The Southern Highlands residential property market
continues to see strong activity from local and out
of region buyers. The most active market is close
in to the townships of Bowral, $700,000 to $1
million, median $771,0004 (+13% 2015), Moss Vale,
$450,000 to $700,000, median $508,000 (+15%
2015) and Mittagong, $550,000 to $800,0001,
median $605,000 (+14% 2015), where agents report
a severe shortage of listings. Buyers are moving to
the Highlands from greater Sydney, North Shore
and the Hills District in particular, seeking a lifestyle
change with accompanying economic benefits.
Pleasingly, an increasing proportion of purchasers
are owner occupiers and families. Properties will
be a mix of modern well appointed, well maintained
renovated older style dwellings. The emerging
precincts on the outskirts of townships such as
Bingara Gorge (Picton), Renwick (Mittagong) and
Darraby (Moss Vale) are also trading at a brisk pace,
with price points from $550,000 to $900,000 where
improvements will be modern and contemporary.
There is an increasing amount of property across
the Southern Highlands in the $2.5 million plus
category, primarily the rural lifestyle market, (ten
hectares plus) that can remain on the market in some
instances for up to two years. These properties are
generally located outside the main townships in the
hamlets of Exeter, Bundanoon and Sutton Forest and
are thinly traded, with purchasers more specific as
to their requirements, eg equestrian facilities, house
and guest accommodation, landscaping or water
being some of the selection criteria.
Southern Tablelands
As with the Highlands, there is now a mix of property
types in the Southern Tablelands, Goulburn region.
The traditional well located older homes are still
sought after, however there has also been a push for
modern family homes. Land releases are continuing
in North and West Goulburn and land sales are
increasing in the new and modern residential estates
including Belmore Estate, Merino Country Estate
and Mistful Park Estate. The most active market
is the $200,000 to $600,000 sector, median
$350,000 (+5% 2015). There is also good activity
in construction of new homes. Goulburn is rich in
heritage architecture and there is good renovation
construction activity in these older character homes.
The main buyer profile is Sydney based investors
tapping into their equity as well as tree change
purchasers from Canberra. In general the region is
enjoying a strong level of sales activity, although the
top end properties ($1 million plus) are trading at a
slower pace then the sub $750,000 market.
Month in Review
October 2016
Residential

31
Newcastle
The residential property market in Newcastle
and The Hunter over 2016 has exhibited mixed
performance throughout the different areas of
Newcastle, Hunter, the Upper Hunter and Port
Stephens. These locations are in substantially
different stages of the property cycle, which could
overall easily be described as two speed. Considering
our patch as a whole however, it is the upsizer who
is dominant, this being the hard working, 30 to 40
year age group with not enough room in the current
home to accommodate the new exciting addition to
the family.
Let’s start with Singleton, which is still experiencing
declining prices with little to no positive change
expected in the near future. There are very little to
no investors prepared to lose money, nor could they
easily obtain finance if they wanted to. Agents have
commented that purchasing in the area is limited to a
needs only basis with their vendors accepting losses.
Purchasers are upsizing at a discounted price point
due to the over supply of property within the market.
The price point for a typical 4-bedroom, 2-bathroom
home ranges between $400,000 and $500,000.
Suburbs surrounding Maitland including Chisholm,
Thornton, Gillieston Heights and Clifftleigh are
experiencing a substantial increase of new residential
housing development. This market is seeing a
combination of investors competing with first home
buyers who can still obtain their grants for newly
built residences. On average a typical newly built
4-bedroom, 2-bathroom property would be within a
price point of between $500,000 and $600,000.
Port Stephens has a more specific type of
purchaser, with higher rates of investors and holiday
accommodation. This area is also experiencing high
demand for land for new residential development.
Agents have stated that purchasers are looking for
properties that can be knocked down due to the
limited amount of new land available.
The price point which is most favoured within the
Newcastle patch is the 30 to 40 age group of second
home buyers and upsizers. This demographic of
families is purchasing their next home within the
price point of approximately $500,000 to $700,000
which will purchase the extra bedroom and second
bathroom within the desirable 20 minutes of the
Newcastle CBD. Specifically it is the well performing
suburbs of Hamilton, Mayfield, Lambton, Adamstown
and Charlestown where capital growth for 2016 is
between 5.3% and 10.5%. There is a combination of
factors as to why this price point and demographic
is the most active, which also goes hand in hand with
why the Newcastle property market is at peak levels.
Investors are continuing to experience difficulty
entering the market due to lending restrictions, even
though there is confidence in property growth. First
home buyers are having very little success securing
a property as the lower end of the market is also
in high demand from the same 30 to 40 years age
group of buyers who have the skills and experience to
extend and renovate.
NSW Mid North Coast
This month we are looking at the areas of the
residential market that are the most active and
slowest on the Mid North Coast.
With the federal election now over and an interest
rate drop of 25 basis points in August, the property
market in Port Macquarie has again shown signs of
gaining momentum. Real estate agents report that
they are scratching the bottom of the barrel for
listings.
Therefore demand within the Port Macquarie
township mainly between the market range of
$350,000 to $450,000 for 3-bedroom older houses,
2– to 3-bedroom villas and new dwellings within the
outer suburbs close to the university have been hot,
hot, hot with sales being achieved either prior to
advertising or within days afterwards.
Recently we have noticed that property prices have
started to become inflated as buyers compete for
properties. This has spurred sales of vacant land
within the outer suburbs of Port Macquarie and
in the small surrounding villages with many new
subdivisions close to being sold out prior to being
registered.
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October 2016
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32
Subdivisions at Crestwood, closer to Port Macquarie,
are seeing higher priced and higher quality
dwellings being built on these lots fuelling the outer
subdivisions such as Sovereign Hills and Lake Innes
where a more reasonably priced lot and dwelling can
be achieved.
We have also noticed an increase in construction
of dual occupancy style dwellings. These generally
comprise a 3-bedroom, 2-bathroom dwelling with an
attached 2-bedroom, 1-bathroom flat for the owner’s
parents or as a separate rental.
We suspect that this momentum may continue for
some months, especially with the Christmas holiday
season still to come.
Bathurst
A quick RP Data search shows that around three
quarters of all residential sales are between
$300,000 and $500,000. We would expect a
correlation between this sale price and the average
income in the area. The majority of home-owners are
able to service mortgages at these prices. The size
to which dwellings can be built is determined by this
limitation in relation to the cost of construction. In
this bracket properties range from slightly dated 60
year old 3-bedroom, 1-bathroom dwellings to modern
brick veneer 4-bedroom dwellings with an en suite. At
$500,000 such a dwelling could comprise over 200
square metres of living area alone. A new limitation
is then reached in that there is a point when a
dwelling can be too large for practical purposes. That
corresponds with why the majority of properties at
$600,000 or more comprise small acreage.
At the moment anything under $300,000 is being
snapped up as soon as it is available. The reason
that there are not as many sales in this price
bracket is because fewer become available. Likewise
although new dwellings continue to comprise a large
percentage of sales, this is influenced by the lack
of listings that are currently becoming available in
established areas. This would also skew the areas of
higher activity, but not necessarily the level of change
in value. This is further influenced by the personal
circumstances of purchasers determining the time
frame available to allow location to be as important a
determinant as the need for accommodation.
Coffs Harbour
Coffs Coast district has a fairly low economic base
with a limited amount of high paying work available.
As such the majority of the pressure for property is
on the affordable sector being sub $500,000. At this
price pint the majority of purchasers are investors
and first home buyers or to a lesser extent people
locating to the area. Rental demand is high which
translates to strong rental returns making Coffs
Harbour an attractive place for investors.
Typically Coffs has been a fairly transient community
which is why rental demand is high. Recent major
infrastructure upgrades primarily centred around the
Pacific Motorway to the north and south of Coffs has
seen a steady influx of road workers over the past five
to ten years. These workers are transient and slowly
moving away from Coffs Harbour currently working
to the north on the Corrindi Beach to Ballina upgrade
and south at Warrell Creek. Although this demand
is slowly shifting away the planned Coffs Harbour
bypass which is expected to start some time in the
next five to six years will see these workers returning
and increasing pressure on future rental demand.
What do we expect to buy for under $500,000?
Increasingly less for your money, however the median
price for a home is currently around $430,000 which
buys you a 3- to 4-bedroom home probably in the ten
to 40 year age bracket located within good proximity
of beaches, schools and all major services. There is
a vast array of properties available for sale within
the Coffs Coast region however more affordable
localities can offer the same type of property for less.
For example, for the same 3- to 4-bedroom home in
Nambucca Heads to the south, you will be looking to
pay around the $330,000 mark.
Conversely the slowest price point is the prestige
market ($1 million plus) which is dependent upon high
net wealth individuals. These are limited in the local
market with prospective purchasers generally coming
Month in Review
October 2016
Residential

33
from Sydney or out of town. The difficult global
economic conditions over the GFC period resulted in a
reduced number of buyers seeking properties in this
value range and location.
There are positive signs that the market has turned
upwards for prestige property with improved
conditions over 2016. Sales activity for residential
product between $1 million and $1.3 million increased
although property over $1.5 million is still thinly
traded with selling periods in excess of 12 months
generally expected.
This market improvement is being experienced in
the more traditional sought after beach locations
such as Sawtell, The Jetty, Diggers Beach, Korora,
Sapphire Beach and Woolgoolga. We note this market
is dependent upon the greater economic conditions
throughout New South Wales and more specifically
the metropolitan markets at the time of sale.
Lismore
Whilst Lismore City caters for all potential buyer
types, the vast majority of sales activity appears to
be located within the $250,000 to $350,000 price
bracket.
The primary reason for this is that it appeals to not
only the first home buyer but also the savvy investor.
Generally speaking the gross rental yields for a single
residential house or unit would barely register 5%
for properties above $400,000. However, within the
$250,000 to $350,000 range, we start seeing better
returns, particularly if current mortgage lending rates
stay below 4% for the medium to long term.
Coupled with basement areas, it is not uncommon
for property owners to retrofit the space into a self
contained granny flat to generate a bit more coin
(regardless of whether such improvements are
Council approved or not!).
Dwellings and units in this price range are generally
original or may have some minor cosmetic
improvements, hence making the potential capital
gain that could be gleaned from investing in a new
kitchen, bathroom or even addition of an en suite if
existing space permits) an inviting prospect whilst
potentially improving the rental base.
Within this price range, one would expect to purchase
a 3-bedroom, 1- to 2-bathroom, single or double
garage brick and tile home in Goonellabah with
potential rent from $275 to $375 per week depending
on location, availability of services and general
condition.
At $250,000 to $350,000 the range is simply seen
as being affordable and a good starting point for a
reasonable quality of accommodation. From that
base, first home owners and investors can value add
to the existing structure.
The slowest moving sector, particularly in the
past three years, is the typical, unrenovated brick
and tile 2-bedroom, 1-bathroom unit with carport,
usually within a complex of three or four units. This
seems rather peculiar given that the price range is
approximately $150,000 to $200,000 and is still able
to rent for around $200 to $250 per week. However,
hidden costs such as an ill-managed body corporate
and outstanding maintenance issues may give cause
for concern.
Other reasons could be that first home buyers simply
have higher expectations and want that 4-bedroom,
2-bathroom home with a double garage as their first
home. It does happen. We have completed a number
of To Be Erected valuation reports with first home
buyers buying land for around $180,000 to $200,000
and then requiring a new build contract at $200,000
plus. Images of a chained millstone around the neck
pop up in one’s mind when witnessing this paradigm
shift.
Times have certainly changed since the 1950s and
1960s.
Modern, residential properties in the $400,000 plus
price bracket are generally reserved for upgraders
and there is reasonable demand.
In the rural townships of Casino and Kyogle, the
favoured price range for investment property is
lower at $175,000 to $275,000, but interestingly,
the rental is higher as a gross yield percentage to the
market value of the property. Similar to Lismore City,
Month in Review
October 2016
Residential

34
original 2-bedroom units within Casino and Kyogle
are also hard to move with overall market value being
relatively stagnant and even dipping throughout the
year.
But then again, a Casino or Kyogle $110,000 to
$120,000 unit is still able to attract rent of around
$170 to $200 per week.
Lastly, the old adage of location, location, location still
weighs in heavily in the eventual sale price achieved
with convenience of location to shopping, schools and
services contributing to demand for housing close to
the CBD and local neighbourhood centres.
The Clarence Valley
The most favoured price points in the Clarence Valley
are below $400,000 in Yamba and below $300,000
in Maclean and Grafton. Investors are the main buyer
demographic for this price point and will tend to get
a 1950s to 1970s refurbished dwelling. In Yamba, you
would be looking at a dwelling located on a busy road.
These price points can be pushed up in Yamba from
$500,000 to $800,000 for well located properties,
however there will tend to be more of a mix of
investors and owner occupiers. Grafton and Maclean
will also push up to $450,000 for modern homes for
investors and owner occupiers.
The slowest price for the region is the $800,000
to $1 million bracket in Yamba and anything over
$450,000 in Maclean or Grafton. These will tend
to be people moving up to the region from capital
cities and there are also some professional couples
purchasing in this price bracket.
The slowest price point depends on what is happening
in the capital cities, however the locality of the area in
relation to cities and local industries has the largest
impact on the slowest price point.
Byron Bay and Surrounds
The most favoured price point in Byron Bay and
Lennox Head is between $700,000 and $1 million
where you will get a standard dwelling in Byron and
good quality home newly renovated in Lennox. In
Mullumbimby and Ocean Shores the most favoured
price point is between $500,000 and $750,000 for
a standard dwelling. The main demographic for this
price point is owner occupiers who are a mix of local
buyers trading up and people relocating from the
major cities.
The main reason that this price point is so favoured
is due to this bracket offering an affordable coastal
living family home to middle income earners who
want to enjoy the resort style of living.
The slowest price point in the region are for prestige
properties priced $4 million and above. These
properties are pretty much only available to the
rich and famous and are owner occupied or kept as
holiday accommodation. Although there are more
transactions taking place at the moment, it is still
a very thinly traded sector of the market and high
volatility is associated with this end of the market.
The other slow price points are the secondary rural
residential areas. The demographic tends to be local
buyers, however due to being that little bit further
away from the towns and airports, tends to be the
reason they are in the slower price point category.
Ballina Shire
The most favoured price points in Ballina are between
$500,000 and $650,000 which tends to be owner
occupiers, particularly young families. You will get a
standard dwelling in this price bracket which includes
recently built houses. These are considered the most
affordable dwellings in the location for families.
Families priced out of this bracket in Ballina can move
slightly further inland to Wollongbar where they can
build a new standard home for between $450,000
and $550,000.
The slowest price point for the area is anything priced
over $1 million. Although the area has seen a few
good sales over the $1 million mark, transactions are
limited. Professional couples are the most likely buyer
group over this price point.
Month in Review
October 2016
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35
Melbourne
Prestige
Suburbs in Melbourne’s inner east such as Balwyn,
Balwyn North and Deepdene are seeing strong
activity especially in $3 million to $4 million price
range. While the market has slowed slightly since
this time last year primarily because of restrictions
placed by Australian banks on Chinese investors, the
area is still in high demand mainly due to the coveted
Balwyn High School zone. Properties within this
highly sought after zone can generally add anywhere
from 15% to 30% to value compared to those
properties located outside the zone (AFR, 2016).
The most common properties in the $3 million to $4
million price bracket are recently constructed French
Provincial style dwellings while the older post war
style dwellings that originally established the area
are being snapped up and demolished to make way
for the contemporary dwellings highly popular with
the Chinese buyers still in the market.
Properties priced at $4.5 million and above on larger
blocks of over 1,000 square metres with older style
dwellings are taking longer to sell and are the slowest
point in this market. Properties of this sort can take
on average two to three months to sell, whereas
smaller blocks with recent constructions are selling
much faster and generally within 30 days as they
are the property of choice for many of the Chinese
buyers who still highly influence this sub market.
The most active price point in the inner east right
now would be $500,000 to $1 million. The buyer
demographic is varied and includes young first home
buyers, families, overseas investors and empty
nesters looking to downsize. Most of the properties
purchased at this price point are apartments, units or
flats. This price point is popular as it is attainable for
a large portion of the populace through saving and
lending and there is a high volume of stock available.
The slowest price point would likely be $2.5 million
plus, due to lower supply and stricter lending to
foreign purchasers. This price point is largely
unattainable for many potential purchasers.
Richmond has been the most active market within
the inner eastern suburbs with 198 properties sold
at auction so far this year. It is made up of period
dwellings, new and old apartments and modern
townhouses. It has appeal for both first home buyers
and young families due to its proximity to the city
and it is well serviced by amenities.
Docklands has been the least active market in terms
of auctions, with just five properties sold at auction
this year, although more have been sold privately.
Docklands is considered less desirable to families
due to lack of parks and schools and has also been
affected by the major banks restricting lending to
foreign purchasers.
Seddon and Yarraville (six kilometres and eight
kilometres respectively from Melbourne’s CBD)
appeal to buyers who might be priced out of other
inner suburbs and are attracted to Victorian and
Edwardian period era streetscapes, fast train and
road links into the city, proximity to the bay and the
village atmosphere. These two inner west suburbs
have selling price points firmly entrenched in the
$750,000 to $1 million range. Over the past 12
months, 58% of houses sold in Seddon have fallen
within this range while in Yarraville this rises to 63%.
In both Seddon and Yarraville, couples with children
with income levels of $78,000 to $130,000 are the
dominant household types. The most common age
bracket in Seddon is 25 to 34 while at 35 to 44,
Yarraville has a slightly older age profile (RP Data,
2016).
An example of a recent sale is 46 Wilson Street,
Yarraville, a circa 1900 single fronted 3-bedroom,
2-bathroom renovated weatherboard home on a 105
square metre block which sold on 26 June 2016 for
$908,000.
46 Wilson Street, Yarraville (Source: RP Data, 2016)
Month in Review
October 2016
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Victoria

36
Moving out to Sunshine, 12 kilometres west of
the CBD, the most purchased house price falls in
the $601,000 to $750,000 range (39%). While
household structure and age profiles are similar
to suburbs such as Seddon and Yarraville, income
levels drop substantially with $31,000 to $52,000 the
dominant household income level (RP Data, 2016).
Sunshine is the most westerly suburb of Melbourne
with intact period homes. In addition, Sunshine as
well as adjacent Sunshine North have larger block
sizes and this factor combined with local employment
and public transport draw buyers to this corner of
Melbourne. Sunshine North in particular has average
lot sizes of 600 to 700 square metres. The recent
rezoning of parts of Sunshine and Sunshine North
to Residential Growth has helped drive interest and
prices upwards and many single residential lots are
now being subdivided into three lots. The median
house price in Sunshine North has risen from
$473,000 to $533,000 or 12.7% over the 12 months
to September 2016 (REA, 2016).
The outer western suburbs of Melbourne provide an
opportunity for many buyers to enter the market.
The price bracket with the most transactions over
the past 12 months is $501,000 to $600,000 for
Point Cook; $401,000 to $500,000 for Truganina;
$301,000 to $400,000 for Wyndham Vale and
$251,000 to $300,000 for Melton (Source: RP
Data, 2016). As the distance from Melbourne CBD
increases, the most popular price bracket decreases.
In Point Cook $501,000 to $600,000 will buy
you a 3- or 4-bedroom house on an allotment of
between 400 and 600 square metres. Similarly in
Truganina $401,000 to $500,000 will buy you a
3- or 4-bedroom house on an allotment of 400 to
550 square metres. In Wyndham Vale $301,000 to
400,000 would secure a modern or established
3- or 4-bedroom house on an allotment of between
300 and 600 square metres. In Melton $250,000
to $300,000 buys you a 3-bedroom established
house on an allotment of between 500 and 700
square metres. Clearly, 3- to 4-bedroom houses are
the most commonly purchased. This is because the
demographic in these areas is mainly young families
who require a minimum of three bedrooms for their
growing families.
On the other hand, the slowest price points in these
areas over the past twelve months are $1 million
to $1.25 million plus in Point Cook and $751,000 to
$1.25 million in Truganina; $751,000 to $1.25 million
plus in Wyndham Vale and $401,000 to $1.25 million
plus in Melton (source: RP Data, 2016). In most cases
it is the higher price points that have the least sales.
This is mainly due to the low supply of dwellings at
these price points. These areas are predominantly
new estates with similar land sizes and similar
pre designed dwellings. There are not many
architecturally designed high specification homes
that could obtain a higher sale price. Furthermore,
demand for high priced dwellings in these areas
is low as larger budget purchasers may prefer a
superior location, for example closer to Melbourne’s
CBD.
North
The price point most active in Melbourne’s north
is $700,000 to $1.2 million. This price point is
especially active in inner suburbs such as Brunswick,
Northcote, Thornbury, Preston and Coburg. This
price point is popular in properties within close
proximity of the CBD.
A suburb that continues to be one of the most
dynamic in Melbourne’s north is Northcote.
Northcote has had a quarterly median house price
change of 18.2%. This can be explained by the
suburb’s proximity to the CBD, its public transport
connections, trendy bars, cafes and live music
venues. Northcote has also experienced a number
of high end sales. 25 Simpson Street, Northcote (see
below) sold for $2.34 million on 27 August 2016.
Month in Review
October 2016
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37
25 Simpson Street, Northcote (Source: RP Data,
2016)
One of the slowest and least active suburbs in
Melbourne’s north is Broadmeadows, highlighted by
its median house price of $390,000 and quarterly
growth of 2.2%. Broadmeadows has also had less
than 30 sales within the suburb in the last quarter
(source: REIV, 2016). A possible reason for this small
amount of activity is the huge supply of affordable,
newly constructed homes in Melbourne’s outer north
suburbs such as Craigieburn and Greenvale.
East
In comparison to this same time 12 months ago,
Glen Waverley has experienced a considerable
slowdown. This was expected as such rapid growth
rates were simply not sustainable and the change in
foreign investment rules also reduced the number
of competing buyers in the market. Although those
properties located within prestigious school zones
are still achieving high market sale prices due to
modest competition between local and overseas
buyers, it is those secondary properties located
outside the school zones which tend to be the
slowest.
Within Wantirna South the most favoured price
point tends to be between $750,000 and $950,000.
For this, buyers can expect to purchase a partially
renovated or updated 3- to 4-bedroom, 2-bathroom
house on a 600 to 800 square metre block of land.
This particular price point tends to be favoured by
more established families and investors, both groups
with a heavy Asian influence and many of whom tend
to buy in the area because of the high performing
schools and proximity to local amenities.
17 Mockridge Street, Wantirna South (above) is a
typical example of what can be purchased for the
favoured price point in the suburb. This property
sold for $800,000 on 18 August 2016.
Outer East
Suburbs such as Healesville, Upwey and Tecoma
tend to be favoured by young families and first time
buyers. The main reason for this relates to the more
prominent sale prices of between $500,000 and
$550,000. These properties, although generally
quite large, tend to be in their original condition
and in need of updating. Interestingly however,
weatherboard properties tend to fetch a premium in
comparison to their brick veneer counterparts, with
purchasers favouring this style.
With the increasing number of subdivisions
occurring or which have occurred within recent
years, properties in Croydon which are either new
or up to five years old tend to be preferred by
purchasers. Similar to other suburbs, families are the
predominant purchasers, however retirees looking
for a home which requires minimal maintenance
and upkeep are also favouring these new units.
Furthermore the suburb is considered as more leafy
than its neighbours which again suits both sets of
purchasers. The price point most favoured tends to
be between $650,000 and $720,000 and for this
they can expect to secure a 3-bedroom, 2-bathroom
Month in Review
October 2016
Residential
17 Mockridge Street, Wantirna South (Source: RP Data, 2016)

38
townhouse with approximately 150 square metres of
living.
In contrast the $1 million to $1.2 million range is
perhaps the slowest. The number of properties in
Croydon which sit within this price range is limited
and those which do come onto the market can
take some time to sell. Buyers of such properties
tend to be local residents looking to upgrade to a
larger home, however similar to the outer eastern
suburbs, at this price point weatherboards are
favoured and tend to sell much faster. For example,
9 Moore Avenue, Croydon (see below) which sold
for $1.11 million in April sold within 26 days of being
advertised (Source: RP Data, 2016).
9 Moore Avenue, Croydon (Source: RP Data, 2016).
The $1 million plus price seems to be the key
pulling factor preventing more sales from
proceeding. Purchasers at this price range also
have neighbouring suburbs such as Ringwood
and Ringwood East to consider, both of which are
closer to the Melbourne CBD and benefit from their
proximity to newly refurbished local amenities.
South East
Relatively affordable homes (roughly $400,000)
in the new estates are in hot demand. This demand
typically comes from first home buyers, investors
and downsizers. For this price, a new or recently built
3- or 4-bedroom home can be purchased depending
on the quality of finish. Many agents are reporting
that their biggest problem at the moment is finding
new listings. Once they have the listing, the house
practically sells itself. According to one agent in
Officer, an existing home recently sold within three
hours of it being listed on the market.
There are still rural lifestyle properties located in
parts of Officer that haven’t been overtaken by new
estates and some of these sales fetch over $1 million.
However these properties are not in high demand
and take far longer to sell. Buyers in this market
commonly represent older couples and families
looking for a location further from the city. The
lifestyle market is slow by contrast, representing not
necessarily a dead market, but a market not as active
as that mentioned earlier. It can be assumed that
this is a result of the higher price point and a product
that’s not in as much demand as those in the estates.
Mildura
Demand for housing in Mildura is greatest in the
$225,000 to $450,000 price bracket. Buyers in
this range are predominantly owner occupiers and
comprise a mix of first home buyers and people
trading up from cheaper first homes. It is difficult
to find a well maintained dwelling for less than
$200,000 in Mildura, however cheaper houses can
be found in some of the surrounding towns.
The volume of sales above $500,000 is relatively
low, however there is generally buyer interest if
properties have good outdoor living areas, shedding
or swimming pools. Selling periods for properties
priced above $600,000 are often longer than three
months, but there are exceptions. Often we find
that buyers of more prestigious housing are people
relocating to Mildura for either work or retirement
purposes and this group is generally able to act
quickly when they see a property that suits their
needs.
Echuca
Most agents are reporting a distinct lack of stock
across the board but particularly in the standard
$300,000 to $400,000 price bracket. This is having
some interesting impacts on the market including
an increasing number of off market transactions
as agents have buyers ready along with upward
Month in Review
October 2016
Residential

39
pressure on pricing and in some instances some
increased pricing for rural residential properties in
close proximity to town.
The tighter supply conditions has been seen through
most market segments with several significant
larger sales which appear to have been buoyed by
lower interest rates and an expectation that they
will remain low in the short term. These include
several sales in excess of $1.2 million in recent times
and another property which has allegedly just gone
under contract for $2.75 million.
Gippsland
In the Sale and general Wellington areas, the
$250,000 to $350,000 continues to perform
consistently. First home buyers and young families
generally dominate this market segment, purchasing
circa 1970 to 1990, 3- to 4-bedroom brick veneer
properties in established locations. The higher
end properties, generally being those with asking
prices over $650,000, tend to experience longer
selling periods, with few buyers active in this market
segment. Slowing activity in offshore and onshore
gas and oil operations based in nearby Longford
tends to impact this market segment.

Month in Review
October 2016
Residential

40
Brisbane
Good old Brisbane has seen the broad gamut of
market activity from feast, to famine, to… “mehh”.
By that I mean, here we are in one of the most
attractive, saleable and liveable cities on the
continent… and we still haven’t seen our market firing
strong right across the board. There have certainly
been winners and losers but overall, average punters
were expecting bigger value gains in the past four
years. A lot of talk in 2013 was around Brisbane being
‘THE’ place to invest, but it’s generally failed to rise to
expectations.
Enough of that – as the oil baron said, “It’s time to
drill down!”
At present, there’s no doubt the strongest markets
continue to be within 10 kilometres of the CBD. That’s
a common theme here in Brisbane – stay close to the
city centre and you won’t get hurt. There are a few
reasons why you buy within a reasonable distance
of the big smoke. Number one, this has traditionally
been our most successful sector. In Brisbane,
the closer in you are, the better your chances of
consistent capital gains and ongoing tenancy.
You do, however, need to be selective about property
type and quality. The mantra must be whenever
possible, choose detached housing in a decent
location above all else. It will reduce the risk and
improve your chances of success. As we’ve been
saying for some time now – be very cautious about
new units and off-the-plan purchases, particularly
those designed to appeal to investor buyers. They are
almost impossible to justify as a good choice in the
current market.
Another reason this inner zone is our best? There’s
no doubt that compared to Sydney and Melbourne,
our property prices are an absolute steal. We’re
regarded by many as the third big capital (apologies
to Perth) so if you’re a transient investor focussing
on between big cities and you’re looking for more
property bang for your buck, it’s hard to ignore
Brisbane and the suburbs closer to the centre.
Price points of appeal within this magic radius
are broad. Any purchase between $500,000 and
$1 million is sure to catch the eye of buyers – and
most are looking to owner-occupier stock for solid
investing. Our valuers say the strongest interest
comes from young professional couples as well as
families who want to be in close proximity of schools,
public transport and services. We also find once you
go above the magic $1 million mark, the number of
potential purchasers begin to decline significantly.
Cheaper buy-ins for investors do tend to be in
suburbs a bit further out. There are plenty of sub-
$500,000 options in areas like Kingston, Slacks
Creek and Caboolture and certainly tenant demand
remains fairly strong, however you must still look
for good land content with a detached home if you
want to mitigate risk. When talking famine market, it
is in fact these further flung addresses that struggle
most.
Once again property type is key to performance.
Townhouses and units in outer suburbs are very
slow to sell. This is evident in areas such as Marsden
and Kingston where there are a lot of established
townhouses as well as a continual supply of new
townhouses that are mainly sold to interstate
investors. This high level of supply is well and truly
exceeding demand and turnover can be a bit retched
at times. There’s also quite a large price difference
between a new townhouse and an older established
townhouse – although the rental return on the
older townhouse is comparatively strong. As such,
the smarter investor who feels they must look at
attached housing a bit further out should consider
purchasing a discounted older townhouse that may
need a bit of renovation rather than something brand
spanking new.
Toowoomba
Toowoomba’s residential market has continued to
soften, showing a further decrease in median house
prices across the Toowoomba urban area (postcode
4350). The June 2016 quarter gave a median of
approximately $350,000, down from approximately
$370,000 in the March 2016 quarter. To date, the
September 2016 quarter is returning a median
house price of approximately $330,000, however
this is based on a limited volume of settled sales
transactions and should be treated with caution.
Month in Review
October 2016
Residential
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41
While this is proving to be a slowing market, the
capacity for long term gain remains attractive to
first home buyers, upgraders and renovators due to
Toowoomba’s relatively affordable price points.
Price segmentation of residential properties over the
past 12 months shows that 40% of all house sales
recorded are between $300,000 and $400,000, the
price point which encompasses the median house
price and consistently proves most active. Sales
less than $300,000 and sales between $400,000
and $500,000 make up approximately 20% of all
house sales respectively. Properties in the price
range exceeding $700,000 appear to have the least
movement, however see strong interest and sale
prices. This high end property market is restricted as
a result of limited supply and limited land in higher
end suburbs such as Redwood, East Toowoomba,
Middle Ridge, Mount Lofty and Prince Henry Heights.
The majority of buyers in the median price range
consist of local and non-local owner occupiers and
investors. However, investor interest appears to
be easing parallel to the slowing market conditions
and increasing vacancy rates. Buyers in this price
range are able to acquire a range of different
homes consisting of 2-, 3- and 4-bedroom, brick and
timber, older and recent. These types of properties
are spread across older suburbs such as Newtown,
Centenary Heights, Harristown, South and North
Toowoomba, ranging all the way through to brand
new sub divisions in areas such as Glenvale and
Cranley, situated further from the CBD.
Overall, while the relatively strong sales and price
growth demonstrated in 2015 has not been met this
year, the current cooling of the market may stabilise
with large infrastructure projects currently under
construction, including the second range crossing
and QIC shopping centre development acting as
catalysts for future economic growth across the
region.
Gold Coast
The most popular price point in the north-west
Gold Coast and southern Logan area is the bracket
between $380,000 and $410,000. At present and
seemingly over the past two years, this range is
very popular in Yarrabilba with owner occupiers
(particularly first home buyers) and investors. There
have been a large number of sales lately in this price
range of very recently completed houses which have
never been occupied. They are generally good value
for money and provide the benefit of buying a new
house without the lead in time and perceived stress
related to building a home. Purchasers of completed
house and land products benefit from different
lending criteria and the limited paperwork compared
to the additional documents and contracts required
for construction loans.
In this price range you get a new 4-bedroom,
2-bathroom house with double lock-up garage
located on lots ranging in size from 290 to 450
square metres with living areas of between 120 to 150
square metres.
In contrast to Yarrabilba, there is a limited market
for standard housing above $550,000 in areas
slightly further west including Jimboomba and the
surrounding suburbs. This area is traditionally a rural
residential locality. Buyers have numerous choice
from new to second hand dwellings. A modern house
can be purchased for around the $550,000 price
point, typically constructed between 2008 and 2012
on around one acre with around 190 square metres
of living area. These rural lifestyle properties are just
that much further away from all amenities, schools,
shops etc with longer travel times, however appeal to
purchasers seeking a larger property than a standard
residential lot.
These property types in the Jimboomba area are
almost exclusively owner occupiers or investors who
live short distances away.
Whilst prices in these areas have increased, they tend
to gain momentum and decline quicker than more
centrally located properties with shorter market
cycles.
Central North
In the central north Gold Coast, Helensvale
remains one of the boom areas. There has been a
strengthening in the $500,000 to $650,000 price
Month in Review
October 2016
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42
point. The buyer demographic is mainly owner
occupier family buyers looking for spacious 4- or
5-bedroom homes on large blocks.
The photos show two properties purchased in this
range. The first is a semi-modern dwelling purchased
for around $550,000. The property is on a quiet
street with good opportunity for capital growth
through renovation. The second is a modern dwelling
in a relatively new area of Helensvale. This property
is a well presented 4-bedroom, 2-bathroom dwelling
with a pool and covered outdoor areas selling for
around $650,000.
One of the quieter market segments in the central
north areas is semi-modern units and high rises
around the Broadwater. In the Runaway Bay highrise
precinct on Bayview Street and Oatland Avenue
there have been less than five settled sales in the
$700,000 to $1 million bracket. These buildings are
mainly owner occupied by retirees and units are
tightly held when market conditions are favourable.
Central
The strongest performing central Gold Coast suburbs
with regard to sales activity over the past couple of
months include Broadbeach, Broadbeach Waters and
Benowa.
Demand for Broadbeach units under $500,000
remains firm and detached housing within
Broadbeach Waters up to $1.75 million continues
to be highly sought after. The Broadbeach and
Broadbeach Waters areas are becoming very popular
due to their proximity to the beach, light-rail system,
Pacific Fair shopping centre, boutique cafes and
other various amenities.
Buyers with say $400,000 to $450,000 should find
opportunities such as a partly or fully refurbished
2-bedroom, 2-bathroom low rise apartment within
close walking distance to Broadbeach Mall and the
beach.
Buyers with $500,000 to $750,000 should be
looking to buy a non-waterfront detached house in
Broadbeach Waters or possibly even a very basic
entry level waterfront dwelling with canal frontage.
The market has improved considerably over the past
two years within this area and at present it is likely
to be difficult to find any waterfront property listed
under $700,000.
Buyers with $1 million to $1.5 million will likely find
either a recently constructed good to high quality
non-waterfront dwelling or duplex or a renovated,
good quality canal front home in this price range.
Alternatively, buyers could also look at good quality
3-bedroom apartments in the heart of Broadbeach if
beachside living is the preferred option.
Lately there has also been a good run of sales of
waterfront homes in Benowa. Local agents have
reported strong buyer enquiry for detached housing
with either canal, lake or river frontage in the $1
million to $2 million price bracket in the Benowa
Month in Review
October 2016
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43
Waters estate. It appears that buyers in this price
range are still looking to take advantage of the low
interest rate environment and possibly there are
more opportunities in this suburb in comparison to
neighbouring suburbs such as Sorrento, Bundall and
Broadbeach Waters.
We are also seeing a growing trend of shorter selling
periods in the more affordable suburbs such as
Merrimac and Mudgeeraba. Detached housing in the
$450,000 to $550,000 price range in Mudgeeraba
remains highly sought after and it has been quite
common for property in this price bracket to sell
within a couple days of being listed for sale. Buyers
with young families are the typical demographic in
this area with affordability being a key issue in the
decision making process.
There appears to be very good levels of demand
in other central suburbs such as Isle of Capri,
Bundall, Sorrento, Mermaid Beach, Mermaid
Waters, Robina and Carrara, however, agents are
suggesting that there are low stock levels in these
localities at present and vendors’ expectations are
rising. Potential buyers looking to buy residential
property priced under $1 million in these areas must
be prepared to negotiate quickly due to the high
demand and shortage of stock.
Source: ppre.com.au
Southern Gold Coast
On the southern Gold Coast and Tweed Coast the
most active suburbs are those in proximity of the
beach and amenities. These suburbs include Miami,
Burleigh Waters, Burleigh Heads, Palm Beach,
Coolangatta, Tweed Heads, Banora Point, Kingscliff,
Casuarina, Bogangar and Pottsville.
The favoured price point among buyers for dwellings
in the above areas on the southern Gold Coast is
between $550,000 and $800,000. The price point
among buyers for dwellings in the above areas on the
Tweed Coast is between $450,000 and $700,000
excluding Salt at Kingscliff and Casuarina which is
between $700,000 and $900,000.
Buyers generally active at this price point are young
local professionals and families. The properties
obtainable are generally renovated older style
dwellings on the southern Gold Coast. In the
Tweed Coast in particular Salt and Casuarina the
properties would be modern dwellings typically
having 4-bedrooms, 2-bathrooms and a double
lockup garage. The photos below illustrate typical
properties.
Southern Gold Coast
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Tweed Coast
The market with the slowest activity is the rural
lifestyle market, however it has improved over the
past 12 months.
The slowest price point would be over $750,000.
Buyers are generally families looking for privacy and
green open space. This market is generally slower
due to the distance from the coast and amenities
such as shopping and schools.
Hervey Bay
The market remains active at present with good
volumes of sales across most price points. 2015 saw
approximately 194 sales of low density residential
vacant land with 35% of these in the $150,000 to
$175,000 price range. To date in 2016, there have
been approximately 65 recorded vacant land sales
with 32% being in the $175,000 to $200,000 price
range. We caution readers because the house and
land package market in Hervey Bay is strong and a
large number of vacant land sales are not recorded.
The improved market although active is showing
very little price growth. Since January 2015 the
average price for residential homes in Hervey Bay
has fluctuated between $320,000 and $340,000.
We note that this is for low density residential homes
only and does not include larger acreage properties.
In line with the average pricing, the most active price
range was $300,000 to $350,000 with 30% of
the 1,620 recorded sales. House and land packages
are mostly targeting this range with the aid of local
and state government incentives helping to attract
buyers.
Although most sales are in the lower price ranges,
there has been an increase in activity for higher
priced property from 15 sales in 2014 to 39 sales
recorded above $700,000 since January 2015.
These include acreage and small rural properties. 16
of these sales were in the Dundowran Beach locality
and include three sales between $1 million and $1.25
million. Although there is a smaller buyer pool in this
price range, these sales are very encouraging for
broader market confidence.
Sunshine Coast
Like most coastal areas, the Sunshine Coast has an
array of different property types which appeals to a
number of different sectors of the marketplace. That
in itself would be difficult to work out, but combine
this with how each of these sectors is actually
performing and it really does become confusing.
It is fair to say that the entry level for each of these
sectors has been performing pretty well. It is only
when you move into the high value bands that the
markets begin to thin out. To try and provide some
clarity we have broken up the Sunshine Coast into
the two main sectors being coastal and hinterland.
When looking at the coastal areas for housing,
the main feedback we’re receiving is that the sub
$750,000 market is most active which can be
broken up into first home buyers active in the sub
$500,000 level and upgraders above this. Homes
tend to be of older style product close to the beach
and modern homes on sub 500 to 600 square metre
allotments within estates (although some estates
are sub 300 square metres). For units we’re talking
more in the sub $400,000 level with once again first
home buyers being pretty active. These units usually
comprise older townhouse product and smaller walk
up unit complexes.
When we look at the other end of the scale, the
slower markets tend to be in the higher value bands,
say above $1.5 million. The market is very much
buyer and vendor specific with inconsistencies
experienced and both weak and strong sales being
recorded. More simply there are just less people
running around with that amount of money to spend.
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There are certain areas where the activity is strong
up to $2 million. Brisbane, Sydney and Melbourne
buyers are the most active as well as local upgraders.
Some overseas buyers are coming back into the
market with the lower Australian dollar.
When we cast an eye to the hinterland markets,
the price point drops further with homes down to
sub $400,000 within hinterland townships and sub
$500,000 for homes on rural residential allotments.
First home buyers and local residents upgrading into
new or larger properties are the most active. We are
also seeing people relocating from coastal areas to
more traditional sized allotments. The unit market in
these areas is typically thin apart from Nambour with
limited levels of stock. Values tend to be trading in
the sub $275,000 level and are typically townhouse
and villa product.
Similar to the coastal region, the higher value
$750,000 plus rural residential market continues
to remain patchy and very much buyer and vendor
specific. Once again, there are certain areas where
the activity is strong up to $1.3 million and then it
thins out. The big benefit for these properties is that
there is an ability to purchase at below replacement
cost which is always attractive.
As you can see from the above, the Sunshine Coast
market is difficult to gauge. At the moment there
are a number of good news stories which are still
creating interest in the region.
Gladstone
It really doesn’t matter which market sector you pick,
most have had increased sales activity over the past
couple of months and the main reason is that it is so
cheap! Values in Gladstone have not been this low in
over a decade.
The most active market sector is the sub $250,000
sector. Purchasers in this price bracket comprise
mostly owner occupiers, many of whom are first
home buyers. This type of money will get you an
older, modest 3-bedroom high or low set home.
The established suburbs of New Auckland, Clinton,
South and West Gladstone are where most activity is
occurring.
Another active sector is for modern 4-bedroom
homes. There has been a new wave of sales for
standard 4-bedroom, 2-bathroom homes in modern
estates selling for sub $300,000 however most of
the stock is priced above this.
Investors have also re-entered the market. There
have been a number of 1980s and 1990s 2-bedroom
townhouses sold in and around the central suburbs
of South and West Gladstone. The value level for this
stock is mostly sub $100,000.
Property with the lowest amount of activity is and
always has been the prestige market. Prestige
dwellings are generally tightly held which of course
is why there is limited activity. We are aware however
of two prestige homes currently on the market
which have garnered good interest according to
selling agents. Pricing and buyer feedback on these
properties suggests that the prestige market has
finally caught up with the rest of the market and is
now at a more realistic pricing level.
Emerald
The Emerald residential market currently is
considered a buyer’s market with the best purchasing
conditions seen in over a decade. All price sectors
are active as residential values have come back on
average 30% for houses and up to 70% for units.
Agents are still reporting a constant flow of new
rentals and selling periods for properties appear to
have shortened.
Mortgagee in possession sales in Emerald still appear
to be minimal. Many first home buyers are active and
job vacancies remain steady as the worst appears to
be behind us. The $220,000 to $350,000 market
appears to be holding now as new home buyers
can buy a good quality, modern home in this range
depending on the area of town they choose to live.
Most investors are still local with a few multi-unit
properties starting to move.
Rockhampton
Upon reflection of our market, it would be fair to
say that price point or location are not determining
factors in either the most or least active sectors of
the market in the Rockhampton region at this point in
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time. More so, the buyer profile and presentation of
the property is determining activity or lack thereof in
the local market.
The buyer demographic most active in this region
over recent months has mainly been owner occupiers
looking for either a first home or upgrading under
favourable buyer conditions with record low
interest rates and affordable housing prices. These
buyers, whether they are first or subsequent home
buyers, are drawn to well priced and well presented
dwellings, ready to live in with no renovations or
repairs required. Price points vary considerably for
this active market sector, but we are typically seeing
first home buyers at prices up to approximately
$300,000 and upgraders from $400,000,
depending on their financial backing.
On the flip side, the local investor market has
been slower than it has been historically, with job
security the obvious reason behind this changing
trend in Rockhampton. Also, properties that
appeal to investors generally would benefit from
a maintenance program to attract tenants and
enhance rental return. Given the volume of available
housing buyers have been less inclined to spend their
cash reserves on such maintenance and repairs.
While our local economy is typically quite diverse
compared to our regional neighbours to the
north, south and west with education, health and
agriculture also major employers in the region, the
mining and associated services industry downturn
has had a significant effect on local investment. This
has combined with higher rental vacancy rates which
makes the region less attractive for the typical mum
and dad investors.
Having said this, Rockhampton has historically been
a less volatile market than other regional localities.
Given recent economic conditions combined with the
2015 APRA changes to investor lending, it is possible
that some investor activity will return to the local
market as investing in capital cities becomes less
affordable.
Mackay
The Mackay residential market currently is
considered a buyer’s market, with the best
purchasing conditions seen in over a decade. The
story of the Mackay market really is a glass half
full versus glass half empty scenario. On the glass
half empty side, we have seen values of residential
properties fall 30% and higher in some areas on the
back of the downturn in the resource sector, which
Mackay is heavily reliant on. Rental vacancies have
ballooned from below 1% to the current 7.7% which is
actually down on the high of over 9%. Rental values
have almost halved from the peak conditions in 2012.
On the glass half full side, we now have buying and
renting conditions not seen since the early 2000s.
This is becoming noticeable in the current market,
with increased sales volumes (albeit at low prices
comparatively speaking). The price point that
appears to have most volume is the sub $300,000
and in particular the low $200,000 properties. For
this price you can get an average quality high set
dwelling in the established suburbs north of the river,
or an older style Queenslander in average condition
south of the river. Previously, Mackay was seen as a
mining town being unaffordable and too expensive
to live for people not associated with the mining
industry. Couple these house prices with historic
low interest rates and Mackay is now seen as a very
affordable alternative to other coastal centres in
Queensland.
Whitsunday
The Whitsundays has two price points that are
appearing active right now.
The first one is the budget market which is high
$300,000 to low $400,000. At this price, you can
expect to purchase:
• An older style 1980 to 1990 lifestyle property or
a modern liveable shed between Cannonvale and
Proserpine.
• A new 3- to 4-bedroom home in Cannonvale or
Jubilee Pocket.
• An older, larger 1980s to 1990s home on a larger
lot with pool or shed.
Buyers in this market are mainly investors and first
home buyers.
The other market that is moving is the upgrade
market with values from $600,000 to $800,000,
which purchases:
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• A larger dwelling with ocean views;
• A larger modern dwelling with pool or shed on
small acreage.
The main buyers in this market are home owners
upgrading with some investors and holiday home
purchasers.
The unit market is the slowest in the Whitsundays at
the present time. Within this market, the entry level
unit market with values from high $100,000 to high
$200,000 is the slowest and includes small 1- or
2-bedroom units in Cannonvale and Jubilee Pocket.
Buyers in this market are traditionally investors or
first home buyers.
Townsville
Townsville’s residential market remains slow with
the most active sector being property priced under
$450,000.
The median house price as at June 2016 was
$335,000. The under $450,000 price bracket
covers a wide section of the housing market with the
upper end providing for modern homes in modern
land estates. Buyers are mostly owner occupiers
looking to upgrade the amenity of their property
or move to a better location. Renovators are also
active in this price bracket with the availability
of tradespeople and the low cost of borrowing
appealing to this type of buyer.
Overall affordability remains the key focus for buyers
who must take into consideration their own financial
and employment positions and are buying properties
they perceive as good buying based on their current
economic circumstances.
The slowest sector is currently the vacant land
market which has seen a significant reduction in sale
volumes over the past two years. This reflects a lack
of buyer confidence in the market stemming from
the subdued economy, along with the economics of
building a new home versus the cost of buying an
existing home.
The inner city unit market and the higher end
residential housing market are also less frequently
traded. This is due to a combination of thin volumes
of stock on the market along with vendors willing to
hold back going to market until conditions improve.
Within the inner city unit market we have seen some
recent sales by vendors unwilling to hold on for
market improvement that have reflected significant
decreases in value from purchase prices.
Cairns
The Cairns market has slowed in terms of numbers
of sales, with sale numbers during 2015 to 2016 as a
whole down by about 7% on 2014 to 2015. In addition
price growth during the year has been minimal.
Our chart shows the price breakdown for houses
sold in Cairns in each price category in 2015 to
2016 compared to 2014 to 2015. It highlights that
the majority of house sales remains clustered in
the $300,000 to $450,000 price bracket and is
relative to a Cairns median house price of precisely
$400,000 during the 2015 to 2016 year.
Cairns House Sale Volumes
House sales during 2015 to 2016 have slowed
noticeably in each of the sub $450,000 price
brackets and most noticeably in the sub $350,000
price bracket. This is most likely due to a lack of
first home buyers and low end investors in the
market. However sales overall have increased in the
$450,000 plus price brackets as confidence has
continued to slowly build in this segment. Sales in
the $1 million plus category occurred during 2015 to
2016 across a variety of suburbs, with the highest
numbers being observed in Redlynch, Trinity Park,
Whitfield and Holloways Beach.
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Adelaide
There is an ongoing theme in the Adelaide market.
In the $500,000 to $800,000 price range, there is
activity in city fringe suburbs as always. First home
buyers who can purchase a quality property under
$500,000 within proximity of the CBD are generally
in a happy situation.
The buyer demographic is generally home buyers
and those upgrading. Older first home buyers are
also active in this market segment. There is increased
interest in properties under $500,000 in suburbs
close to the CBD. Closer proximity to the CBD in this
price bracket generally results in greater interest.
In Adelaide, a purchase price of between $500,000
and $800,000 provides buyers with a myriad of
options. Within five kilometres of the CBD, this
property will typically be detached and may be
renovated. Outside of this radius, buyers can
purchase a detached dwelling on a good sized
allotment which has likely been renovated.
This price range is generally affordable for
purchasers with a dual income. It’s becoming
increasingly difficult for purchasers with a single
income to enter the market at this price point
without a substantial deposit to cover stamp duty in
particular.
Properties in the outer northern suburbs between
$200,000 and $400,000 are probably slowest at
the moment with the predominant buyer in this area
being investors with larger deposits who are more
risk averse in light of economic uncertainty within
the region.
There is decreased first home buyer activity as
well as decreased investor interest given economic
uncertainty with the pending closure of the Holden
manufacturing plant at Elizabeth.
The level of market activity at different price points
does depend on location and generally proximity to
the city and facilities. Affordable suburbs adjacent
to popular and more expensive areas are also
experiencing increasing market activity as buyers
seek affordability.
An example of a transaction in the $500,000 to
$800,000 price range is shown below.
The above house is located in Clarence Gardens,
situated approximately seven kilometres south
of Adelaide’s CBD. It has become an increasingly
popular suburb and a more affordable alternative
compared to suburbs such as Clarence Park,
Westbourne Park and Colonel Light Gardens. The
property sold in November 2014 for $500,000. It is a
basic conventional style dwelling situated on a corner
allotment. It resold in July 2016 in the same condition
and without renovation for $612,500. Purchasers
seeking a property in this area over the past couple
of years have seen the budget for potential dwellings
increase. Decreasing supply of properties available in
this price range is driving demand.
On the other end of the spectrum, northern
suburbs such as Andrews Farm have experienced
somewhat stagnant market conditions in the past
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few years. This is an outer northern suburb situated
approximately 32 kilometres from the Adelaide CBD.
Increasing development of new housing in this area
is causing demand for older dwellings to drop. An
example of this is the following property:
This is a circa 2009 built dwelling surrounded by
similar style properties. It was sold in June 2015 for
$285,000 and resold in August 2016 for $290,000.
An example of an older dwelling (circa 1995) sold in
the same area is shown below.
This is a fairly typical 3-bedroom dwelling with
single carport and outdoor entertaining area. It was
purchased in October 2013 for $257,000 and resold
in August 2016 for $260,000.
These examples indicate the difference in market
value changes for properties in different locations
and particularly the differences in market activity for
properties at differing distances from the CBD.
Mount Gambier
Sales evidence indicates that most of the dwellings
sold in the past 12 months in Mount Gambier were in
the $200,000 to $250,000 price range. This can be
seen in the graph below. The $200,000 to $250,000
price range is affordable for owner occupiers
entering the market and for investors looking for
a property that provides a stable rental return.
$251,000 to $300,000 and $301,000 to $400,000
are also price points that have been favoured among
buyers within the past 12 months.
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A dwelling within the price range of $200,000 to
$250,000 is generally of average to good quality,
including 3- to 4-bedrooms, 1- or 2-bathrooms,
car accommodation and an undercover outdoor
area. The dwellings are generally of brick or stone
construction. Living areas range from about 150
to 200 square metres and the properties are
located on roughly 700 to 900 square metre
allotments. These houses vary in age from the stone
dwellings constructed circa 1950s to brick dwellings
constructed circa 1980s to 2000s.
2 Marlow Court, Mount Gambier – $230,000
A circa 1998 brick dwelling with 3-bedrooms,
2-bathrooms and a double garage under the main
roof. Ancillary improvements include a pergola.
Living area is 160 square metres and the dwelling is
situated on a 756 square metre allotment.
For this price you can also get a modern residential
unit including 2- to 3-bedrooms, 1-bathroom and a
single garage under the main roof, such as the one
below. These units are generally located on roughly
200 to 500 square metres allotments.
7/14 Bailey Street, Mount Gambier – $250,000
A 2013 brick unit with 3-bedrooms, 1-bathroom and
a single garage under the main roof. Living area is
143 square metres and the unit is situated on a 409
square metre allotment.
Over the past 12 months there have been few
dwellings purchased for under $150,000 or over
$500,000. Dwellings under $150,000 are generally
in less sought after locations and have limited market
activity. Dwellings over $500,000 are at the top end
of the market and have a reduced market segment.
High income earners generally purchase these
properties. These properties are often tightly held
and rarely hit the market, which is reflected in the
low number of sales occurring each year.
Properties reaching over $500,000 are generally
modern homes in a newer residential division
or character homes of high quality within close
proximity of the town centre, such as the sales below.
10 Dawn Court, Mount Gambier – $560,000
A circa 2011 stone dwelling with 4-bedrooms,
2-bathrooms and a double garage under the main
roof. Ancillary improvements include a large alfresco
area and 2-car detached garage. Living area is 335
square metres and the dwelling is situated on a
1,085 square metre allotment. Situated in a modern
residential division.
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24 Power Street, Mount Gambier – $567,000
A circa 1920 stone character dwelling with
3-bedrooms, 2-bathrooms and double garage.
Ancillary improvements include a pergola. The
property has been extensively renovated. Living area
is 246 square metres and the dwelling is located on a
1,366 square metre allotment within close proximity
of the town centre.
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Within the greater Hobart region the most favoured
price point among buyers at present is within the
$300,000 to $400,000 range with the majority
of sales coming from the middle Hobart suburbs.
Home buyers at this price point in these mid suburbs
include up-graders and downsizers along with
some investors. The majority of recent sales and
listings within this price bracket came from Howrah,
Kingston, Lutana and Moonah, all of which are within
a 15 kilometre radius of Hobart’s centre.
Within this price range in Howrah you would typically
be able to purchase a smaller sized, approximately
125 square metres of living area, modern home or
a larger (from 175 square metres) older style home.
In Kingston, to the south west of Hobart and the
most rapidly growing area within the greater Hobart
region, you can expect to pick up an older style home
offering 140 to 180 square metres of living area for
between $350,000 and $400,000.
For those who prefer unit living, in Kingston
for between $300,000 and $350,000, a 2- to
3-bedroom unit with a living area of around 100 to
130 square metres can be purchased within one of
the newer subdivisions.
The $300,000 to $400,000 range is mostly
favoured throughout Moonah and Lutana due to
the attractive rental return for investors. Typically
an older style, 3- or 4-bedroom home in original
condition can be purchased at around $350,000 and
could be expected to achieve a gross yield between
4.5% to 6%.
In the north of the state the most favoured
price point among buyers appears to be within
the $250,000 to $350,000 price range. South
Launceston, West Launceston, Newstead and
Invermay have recorded multiple sales within the
past few months in this price range.
An older style, renovated home offering between 100
and 150 square metres of living area in west or south
Launceston can be picked up within this $250,000
to $350,000 bracket. For the same price range in
Newstead you can get an older style home in original
condition with a living area ranging between 120 and
180 square metres. All of these suburbs are within
two to four kilometres of Launceston’s centre.
The north and north-west of the state have a similar
demographic of purchasers within their respective
favoured buyer price points. Second home buyers
appear to be in the majority and are either upsizing
or downsizing.
North-west Tasmania is seeing a favoured price point
within the $200,000 to $300,000 range. Devonport,
East Devonport, Sheffield and Port Sorell have had
a relatively stronger presence for both sales and
listings.
Recently in Devonport and East Devonport purchases
of modern or renovated homes that offer 125 to 200
square metres of living area have been made within
this price bracket.
Both the north and north-west of the state paint a
similar picture for investors as that of the south with
gross yields of between 5% to 6% being achieved.
Throughout Tasmania the slowest price point
appears to be within the $100,000 to $170,000
range.
The majority of properties within this range in the
south can be found in Clarendon Vale, Bridgewater,
and Gagebrook all of which are within approximately
30 kilometres or a 30 minute commute to the Hobart
CBD. These properties are mostly single level, brick
veneer, 3-bedroom, 1-bathroom houses ranging from
90 to 120 square metres of living area and were
previously state housing.
Buyers within this range are often investors looking
for a strong rental return with rents ranging between
$200 and $300 per week. Many of these homes
require repairs prior to being made available for rent.
Due to required repairs these homes generally have
extended selling periods and do not appear to be in
strong demand.
Rocherlea and Waverley are suburbs in the north
where similar types of properties are available for
purchase but demand is likewise limited. Whilst these
suburbs offer low barriers of entry and good gross
yields for investors their potential for future capital
growth should also be considered.
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Darwin
The recent change of government with Labor
taking hold of the reigns in the August election have
improved conditions for people trying to enter and
exit the property market. The past two years has
seen Darwin’s property market continually slow with
decreasing prices and lower sales volumes across
the board. First home buyers were only offered
incentives for brand new properties in those two
years and established properties subsequently
received limited interest.
Since 1 September the market has sprung to life
again as the new first home owner incentives for
existing properties came into play. First home buyers
are now eligible for up to $24,000 in stamp duty
concessions, with the first $500,000 of the purchase
being stamp duty free and the incentive being
capped at $650,000.
As many of the properties now being targeted by
first home buyers will be relatively old, a further
incentive of $10,000 to be utilised for renovations
including up to $2,000 on household goods will
further encourage people to buy existing properties.
The incentive of $26,000 for building or buying a
new property remains in place.
The new concessions have only been effective for
three weeks and agents are reporting increased
activity with numerous contracts executed in the
short existence of the initiative. Many prospective
purchasers were waiting to see the election results
before making any serious offers and have been
quick to take advantage of the new benefits, some
fearing it might push prices back up, particularly at
the entry level.
As the incentive is capped at $650,000, all
established properties on the market under that
range are expected to attract more interest. The
northern suburbs in particular will be a popular
area for young buyers and all the older Palmerston
suburbs should benefit also. The biggest loser
from the scheme may be the already suffering new
estates, as new home buyers will now shift away
from building and focus on the established market. In
particular Zuccoli and Muirhead are the two estates
with the most land left to release and project builders
may have to bring their build contract prices down to
compete with existing stock.
The increased activity in the market will help
move properties quicker and the flow on effect
will help people buy up an asset class from their
existing property. There are still many negative
economic factors surrounding Darwin and as the
population continues to fall the basic supply and
demand principles would suggest that prices won’t
be drastically spiked by these new incentives. The
greatest benefits will be more sale transactions,
shorter marketing periods and more opportunities
for people to enter the property market.
Alice Springs
Recent market conditions in Alice Springs have
provided challenging times, however there are some
areas that are shining brighter than others. We have
seen good activity in the $650,000 to $750,000
price range both from within the main town
boundaries and from the rural residential area.
This market segment in Alice Springs is not generally
impacted by first home buyer considerations with
most buyers being subsequent home purchasers.
A buyer in this price range will be able to secure a
property in the golf course suburb of Desert Springs,
typically with 3-bedroom and a study or a 4-bedroom
home. The standard of renovation will vary, however
typically included on a 1,000 square metre allotment
(approximately) will be an in ground pool, double
garage and verandah.
Conversely we have seen some price points
really struggling in recent times. The strata titled
unit market has seen both reducing values and
historically low transaction numbers. Historically
this segment has been ideal for first home buyers,
however the NT Government removed the first home
buyers grant for existing dwellings in December 2014
which had a significant detrimental impact on the
segment.
The recent NT Election has seen the Labour
Government provide stamp duty concessions of up to
$24,000 for first home buyers, with some early signs
of stimulus in this segment already evident.
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Perth
The residential market in Perth appears to be very
segmented at present, with several mortgage belt
areas appearing to be in a downward spiral, several
upgrade pockets holding their own and some
prestige areas doing reasonably well.
Weekly sales activity is currently exactly the same as
12 months ago and listings are slightly lower.
The median sale price for houses is steady at
$530,000, while the median sale price for units fell
off a cliff last quarter from $435,000 to $405,000,
coming off a high of $452,000 in 2014.
There are bargain hunters out there, but there are
also many people who have simply been paying off
debt or building up savings for many years and are
now in a position to upgrade to those areas they
have been desiring. There is more competition for
sought after products than there was six months ago.
Many neighbouring suburbs are performing at vastly
different levels.
However, statistics only ever tell one side of the
story. Our role is to look through the statistics and
determine what is actually happening on the ground
- treat every valuation independently and treat every
property on its own merits.
As mentioned above, the market is extremely
segmented. Investors have largely retreated from the
market over the past 18 months however speculation
about the timing of the bottom of the cycle is rife.
Small scale development sites in particular have
been on the nose, but with prices in many areas
approaching single residential value reducing the risk
profile of these sites, they appear to be rebounding.
An example of this can be found in Gabriel Street,
Cloverdale, where many sites have a zoning of
R20/50/100 and offer a variety of development
opportunities. The property at 127 Gabriel Street
transacted in May 2016 for $535,000, whilst an
almost identical property situated at 131 Gabriel
Street transacted in July 2015 for $610,000. More
recent activity indicates a higher level of interest in
similar properties above $550,000.
In the more traditional market, the trend appears to
be that the market is avoiding the best house in the
worst suburb and normalised to the worst house in
the best suburb. Market activity through premium
suburbs such as Cottesloe, Mount Pleasant and
Leederville has improved, with a significant level
of activity at entry level prices. This is being driven
by buyers who have long desired to reside in such
suburbs and due to personal circumstances including
debt profile, job security and current interest rates,
they can now take the plunge.
Less desirable areas such as Camillo, Koondoola and
Girrawheen are struggling for traction, largely due to
older style, generic housing options not inspiring the
market, when perceived better value offerings are
available in better located or more desirable suburbs
such as Parkwood, Warwick and Greenwood. Buyers
include first home buyers plus upgrade activity from
current owners within those less desirable suburbs.
There remains activity in traditional first home buyer
suburbs on the urban fringe, albeit at base entry
prices. Suburbs such as Golden Bay, Secret Harbour,
Wandi and Wellard in the south along with Banksia
Grove in the north are attracting the majority of
interest, with the driver appearing to be affordability
and reasonable proximity to public amenities.
Many new and developing estates previously
targeted by upgrade activity are now struggling
for traction, with re-pricing of land common, as are
rebates and performance incentives. Areas such as
Eglinton, Butler and Alkimos in the north and Piara
Waters in the south are competing with near new,
fully established products which are often purchased
at a discount to the buy and build process. As such,
sales activity and fall over rates in such areas are
reportedly significantly higher than 12 months ago.
Land prices in these areas remain the key to their
performance through the remainder of 2016. Many
developers are reluctant to meet current market
price expectations and more innovative estates are
likely to come to the fore. Estates where developers
have significant relationships with large scale
builders that can secure a significant volume of lots
will remain attractive, as the cost efficiencies of mass
construction narrow the gap between the traditional
buy and build and the established housing market.
However caution still needs to be applied in such
Month in Review
October 2016
Residential
Western Australia

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