“A cynic is just a man who found out when he was about ten that there wasn't any Santa Claus, and he's still upset.”
James Gould Cozzens
Queensland home buyers and property investors are being cautious with their cash with more than a third of sales for houses during the last quarter priced under $350,000. Quarterly median house price figures released recently by the Real Estate Institute of Queensland (REIQ) show that sales of homes priced at less than $350,000 had grown in the September quarter.
At the same time the number of buyers spending up big - more than $2 million - was down, with only 22 transactions. Despite the low number of multi-million-dollar sales, there are still plenty of suburbs in Queensland with a median house price of over $1 million (albeit mostly in Brisbane). Despite an abundance of properties on the market, almost a third of the 145 suburbs in the Brisbane statistical division did not record enough sales to provide the REIQ with a reliable median for the September quarter. (Ten sales are needed to set the median house price). To put that into local prospective; there were only five sales recorded in Rainbow Beach for the July – September quarter.
REIQ managing director Dan Molloy said that whilst sales volumes were down and there were some drops in median house prices over the quarter - the year-on-year picture was much better. Strong performers in Brisbane were mostly suburbs in the middle ring and ‘upgrader’ suburbs such as Warner, Murrumba Downs and North Lakes. Gold Coast median house prices took a dive over the quarter dropping 3% cent to $480,000 but year on year recorded a reasonable 8.5 per cent increase.
Broadbeach Waters and Burleigh Heads took a battering with drops of more than 20 per cent, whilst Surfers Paradise values dropped over the year and quarter. Mr Molloy said that given the current conditions the Gold Coast results were fairly good. "The Gold Coast performance has been held back I guess because of the tourism issues and the Australian dollar," he said.
He also said that whilst there was a lower volume of sales throughout the state, prices seemed to be holding up reasonably well. "There is a lot of stock at the moment and some sellers are obviously having to adjust their expectations in terms of prices. I think what we are going to see is in the next couple of quarters we will start to see these sellers becoming a bit more philosophical (about prices).” Mr Molloy said the September quarter figures were affected by interest rate increases and uncertainty surrounding the outcome of the federal election. There also was an absence of first-home buyers and investors. (Source: Courier Mail 20 November 2010).
Again, to put the local real estate market into perspective; Rainbow Beach currently has 53 houses, 61 units/apartments/duplexes and 20 blocks of land for sale (as at 22 Nov 10). More than half of these properties have been on the market for over 12 months. Our local market has also been affected by the combined negative impacts of the GFC, lower tourism numbers and a general cautiousness from buyers.
In conjunction with this, it seems that the ‘sea change’, has lost some popularity over the past two to three years also due to the GFC and the corresponding coastal property market volatility across the nation. Many retired and sem-retired people are now looking for more of a ‘tree change’. Some of the drivers behind this green change phenomenon include Australia's ageing population, the growth in self-managed super funds and the back-to-basics movement which seems to be regaining popularity.
Baby boomers appear keen to unlock equity in their urban homes or investment properties in order to deliver lifestyle advantages. Recent statistics show that they, on average, have about $500,000 to spend, (which is purchasing less and less in many coastal markets). Hence, buying something inland, by default sometimes, is of increasing appeal.
Also, self-managed superannuation funds are looking for steady returns and ethical investments. Australia's 420,000 self-managed super funds are controlled predominantly by couples in their mid-50s, who are financially literate. Green tourist-orientated developments, with proven track records, appeal to this market segment. If you are considering buying into a green change investment opportunity, and you are looking to maximise resale potential, the following ingredient is important: proven growth in tourist demand. (Source: Michael Matusik, Courier Mail 15 November 2010).
Locations such as Rainbow Beach and the wider Gympie Regional Council area appeal to many people albeit for different reasons. Generally speaking, the area appeals to couples and families enjoying long weekends and empty nesters on longer breaks. Our area can also tap into additional markets, such as conferences and international visitors. Most visitors to our location come from the immediate area or closest major capital city (we actually have a relatively low number of international visitors in comparison to many coastal regions such as Far North Queensland).
Another key strength of our location is the unique natural attractions, which many visitors and property investors are looking for. Features such as a National Park, facilities such as a unique dining experience and/or the nature of the area itself or its surrounds (being either boutique/historic/scenic or all three in nature) also add to the appeal of a coastal or ‘tree change’ location.
Property analyst and expert, Michael Matusik has also cited the following items in a checklist when making a decision to purchase in a ‘sea change’ or ‘tree change’ area:
* buy within 200km of a capital city if possible
* close proximity to an airport
* small, yet functional, nearby town centre
* several visitor activities in the area
* at least one unique point of difference
* known location
* ability to sustain repeat tourism, and
* the ability to accommodate future growth without compromising the integrity of the place itself.
Rainbow Beach actually scores pretty well based on the above checklist in terms of where to invest long term – all we need now is for some realistic optimism to return to the property market.
In closing, Merry Christmas and Happy New Year to all from the team at Cooloola Coast Realty!
Wednesday, November 24, 2010
The Future For Growth
“While we stop to think, we often miss our opportunity.”
Publilius Syrus (~100BC)
In recent times the capital city residential property markets have been recording strong levels of property value growth, but this hasn’t necessarily been reflected in those regions outside of the capitals. The performance of some of the major coastal markets has not been as impressive as markets such as Melbourne or Sydney over the past 12 – 18 months.
According to the RP Data-Rismark Home Value Index results for June 2010 capital city property values increased by a total of 10.5% over the year. House values increased by 10.3% and unit values were up 11.4%. That Index release also highlighted that the performance of the housing market outside of the capital cities was significantly different with house values in regional areas increasing by just 5.1% over the 12 months. Generally speaking, property prices in metropolitan areas tend to edge up steadily whilst coastal and regional areas have more of a pattern of ‘spikes’ and ‘troughs’. This ‘concertina effect’ means coastal property prices appear more volatile; however, increases in property values over time are very similar in terms of percentage gains when comparing metropolitan areas to coastal regions.
Over the last 10 years house prices in coastal markets have typically seen strong levels of growth; however, over the last 12 months the performance has been much less impressive. In the majority of instances house prices within these regions have recorded annual growth of less than 10% over the last year. The largest falls have been recorded in: Cairns (-2.7%), Whitsunday (-2.5%) and Fraser Coast (-1.6%) all of which are in Queensland and heavily reliant on tourism and retirees and/or sea changers. Anecdotal reports from areas such as Airlie Beach indicate that buyer demand has significantly dropped back since the relative boom of 2008.
Coastal markets are typically heavily reliant upon tourism and retirees/sea changers to boost their prospects and to create demand and upwards pressure on property prices. The current strong Australian dollar (at a 27 year high) is making it difficult for these regions as holidaying in Australia becomes more expensive for those from overseas and for Australian’s the strong exchange rate makes holidaying abroad significantly more appealing and affordable. The weakness in the tourism sector has the added affect of higher unemployment and fewer tourism related jobs.
Federal and State Government initiatives, in conjunction with local Commerce and Tourism bodies are working hard to promote destinations such as Rainbow Beach and the Fraser Coast in order to increase visitor numbers and improve the bottom line for tourism-reliant business communities. These initiatives include marketing campaigns targeted at domestic and international visitors; highlighting the unique natural attractions of our region.
It is clear that many tourism-reliant towns will continue to struggle as a result of the current economic climate therefore; investing in the promotion of these areas will assist in maintaining and creating jobs within the local tourism industry.
The market for sea changers/retirees has eased since the GFC struck. Many people who were looking to make the move have seen the value of their equity investments as well as their superannuation balances decline and have become more cautious about making the move as a result.
Looking forward, most coastal markets appear to have reached their lows and are now on the improve (Source: RP Data Oct 10). The softness in the tourism sector will temporarily hinder the prospects of significant improvements in most of these markets; however, those coastal markets with more diversified economies or linked with the resources sector are likely to have the strongest capital growth prospects going forward.
Areas such as Rainbow Beach will benefit from mining projects in regions such as Gladstone. Also, many ‘fly-in-fly-out’ mine workers have begun looking further afield for lifestyle investments with property prices in Rainbow Beach representing good value in many cases compared to similar style properties in Noosa, Coolum or Peregian etc.
Property market experts, realestate.com.au, recently released a Consumer Insights Report which showed a huge swing in buyer sentiment compared to this time last year.
Highlights of the report included the following statistics:
• 25% of investors were searching for properties to buy in the $500,000+ price range (up from 16% in April 2009)
• 1 in 2 property seekers now believe the market is rising (a result not observed for more than two years)
• The perceived reasons for growth included a shortage of properties (54% of respondents) and a growing economy (40% of respondents)
The future for coastal property markets such as Rainbow Beach is bright in terms of capital growth. Strategically, the nearby town of Gympie with a current population of approximately 50,000 is geared to grow to 80,000 over the next 20 years (Source: Gympie Times July 10, reference State Treasurer Andrew Fraser). Gympie’s population growth will have positive flow on effects to townships such as Rainbow with an increase in employment opportunities for those wishing to reside here. In addition, there will be increased visitor numbers with many people living in and around Gympie, looking to Rainbow Beach as a weekend destination.
Publilius Syrus (~100BC)
In recent times the capital city residential property markets have been recording strong levels of property value growth, but this hasn’t necessarily been reflected in those regions outside of the capitals. The performance of some of the major coastal markets has not been as impressive as markets such as Melbourne or Sydney over the past 12 – 18 months.
According to the RP Data-Rismark Home Value Index results for June 2010 capital city property values increased by a total of 10.5% over the year. House values increased by 10.3% and unit values were up 11.4%. That Index release also highlighted that the performance of the housing market outside of the capital cities was significantly different with house values in regional areas increasing by just 5.1% over the 12 months. Generally speaking, property prices in metropolitan areas tend to edge up steadily whilst coastal and regional areas have more of a pattern of ‘spikes’ and ‘troughs’. This ‘concertina effect’ means coastal property prices appear more volatile; however, increases in property values over time are very similar in terms of percentage gains when comparing metropolitan areas to coastal regions.
Over the last 10 years house prices in coastal markets have typically seen strong levels of growth; however, over the last 12 months the performance has been much less impressive. In the majority of instances house prices within these regions have recorded annual growth of less than 10% over the last year. The largest falls have been recorded in: Cairns (-2.7%), Whitsunday (-2.5%) and Fraser Coast (-1.6%) all of which are in Queensland and heavily reliant on tourism and retirees and/or sea changers. Anecdotal reports from areas such as Airlie Beach indicate that buyer demand has significantly dropped back since the relative boom of 2008.
Coastal markets are typically heavily reliant upon tourism and retirees/sea changers to boost their prospects and to create demand and upwards pressure on property prices. The current strong Australian dollar (at a 27 year high) is making it difficult for these regions as holidaying in Australia becomes more expensive for those from overseas and for Australian’s the strong exchange rate makes holidaying abroad significantly more appealing and affordable. The weakness in the tourism sector has the added affect of higher unemployment and fewer tourism related jobs.
Federal and State Government initiatives, in conjunction with local Commerce and Tourism bodies are working hard to promote destinations such as Rainbow Beach and the Fraser Coast in order to increase visitor numbers and improve the bottom line for tourism-reliant business communities. These initiatives include marketing campaigns targeted at domestic and international visitors; highlighting the unique natural attractions of our region.
It is clear that many tourism-reliant towns will continue to struggle as a result of the current economic climate therefore; investing in the promotion of these areas will assist in maintaining and creating jobs within the local tourism industry.
The market for sea changers/retirees has eased since the GFC struck. Many people who were looking to make the move have seen the value of their equity investments as well as their superannuation balances decline and have become more cautious about making the move as a result.
Looking forward, most coastal markets appear to have reached their lows and are now on the improve (Source: RP Data Oct 10). The softness in the tourism sector will temporarily hinder the prospects of significant improvements in most of these markets; however, those coastal markets with more diversified economies or linked with the resources sector are likely to have the strongest capital growth prospects going forward.
Areas such as Rainbow Beach will benefit from mining projects in regions such as Gladstone. Also, many ‘fly-in-fly-out’ mine workers have begun looking further afield for lifestyle investments with property prices in Rainbow Beach representing good value in many cases compared to similar style properties in Noosa, Coolum or Peregian etc.
Property market experts, realestate.com.au, recently released a Consumer Insights Report which showed a huge swing in buyer sentiment compared to this time last year.
Highlights of the report included the following statistics:
• 25% of investors were searching for properties to buy in the $500,000+ price range (up from 16% in April 2009)
• 1 in 2 property seekers now believe the market is rising (a result not observed for more than two years)
• The perceived reasons for growth included a shortage of properties (54% of respondents) and a growing economy (40% of respondents)
The future for coastal property markets such as Rainbow Beach is bright in terms of capital growth. Strategically, the nearby town of Gympie with a current population of approximately 50,000 is geared to grow to 80,000 over the next 20 years (Source: Gympie Times July 10, reference State Treasurer Andrew Fraser). Gympie’s population growth will have positive flow on effects to townships such as Rainbow with an increase in employment opportunities for those wishing to reside here. In addition, there will be increased visitor numbers with many people living in and around Gympie, looking to Rainbow Beach as a weekend destination.
Lifestyle Investments - A Long Term Approach
"I'm a great believer in luck, and I find the harder I work the more I have of it."
Thomas Jefferson (3rd President of USA. 1743 – 1826)
Over the last three decades Australian house prices have recorded periods of extreme growth contrasted with periods of weakness. With the benefit of time, the peaks and troughs of house price growth tend to even out, with Australian house prices recording an average annual rate of growth of 8.4% (since 1980).
The Australian property market moves in cycles which are influenced by a wide range of factors including unemployment, interest rates, consumer confidence and of course previous rates of growth that impact on rental yields and levels of affordability on the consumer and particularly business investment.
Over the last three decades Australian house prices have increased at the average annual rate of 8.4%. That’s a pretty decent rate of growth when you consider that prices double every ten years based on an annual compounding rate of 7.2%. In comparison, the rate of inflation has averaged about 4.6% over the last 30 years and 3.2% over the last decade.
Of course, there have been some periods where growth rates have well and truly eclipsed this average rate of growth and periods where prices have underperformed.
As an example of one of the weakest periods for Australian house prices, over the five years from 1990 to 1995 the median house price across Australia increased by just 2.8% per annum. The soft market conditions came at a time when Australia was entering the “the recession we had to have” and unemployment raced upwards from 5.8% in January 1990 to peak at 10.9% in December 1992. Mortgage rates during this five year period averaged 11.75% and peaked at 17%. (And we think interest rates are high now!)
At the other end of the spectrum, the most spectacular five year run was recorded during the ‘boom’ which ran from 2001-03 around most areas of Australia. Despite a slowing in growth rates between 2004/05, the five year period ending July 2005 saw average house price growth of 13.9% per annum. In Rainbow Beach itself, house prices went up in the order of 30% within two years – this growth was unsustainable and has since seen a correction with prices receding approximately 10-15% since the peak of late 2007.
Currently the residential housing market is transitioning out of a strong growth phase, whilst economically the country is just starting to ramp up. Gross domestic product figures show the economy is once again growing at about 3.2%, unemployment is trending downwards, consumer confidence remains high and rental yields are showing the first signs of improvement after being eroded by value growth and lower rental rates during 2009. The Reserve Bank is signaling that they may be forced to increase interest rates as a result of strong inflation figures mostly due to the mining resources boom.
In contrast to the broad market drivers outlined above, we can expect there also to be factors that will dampen market demand. Interest rates are likely to increase at least once over the coming six months after increasing by 150 basis points since October last year. Population growth appears to have peaked and will most likely fall further as the proposed cuts to immigration are implemented and housing affordability is likely to become more of an issue in the larger metropolitan markets around Australia.
For prospective buyers it is worthwhile considering the long term trends in the market. The average length of tenure for Australian home owners is about 7.3 years; a time frame that is likely to smooth out the peaks and troughs of price growth encountered through the cycles. The economic and demographic foundations of the market remain solid which suggests that we are likely to see ongoing improvements in Australian house prices, albeit at a much more modest rate than we have seen in the past five years.
The key to success in investing in the residential property market is having a long term approach. Buying and selling property with a quick turn over approach limits the amount of capital growth the investment will realise and also incurs more costs such as sales commission, legal fees and stamp duty etc.
Purchasing an investment property in a coastal or regional area, as opposed to metropolitan areas, requires research and an ability to withstand the volatility of supply and demand cycles. The yield (rental return) is generally lower compared to properties in metropolitan areas due to demographic constraints. Ie. people living in coastal and regional areas are generally on lower incomes than people living in the city or more built up areas.
Advantages of purchasing a ‘lifestyle investment’ include the ability to utilise the property yourself whilst still having the ability to negative gear the asset and claim associated costs as a tax deduction. For example, you may plan your annual family holiday to include a week’s stay at your own beach side house or unit, whilst holiday letting the property for the remainder of the financial year. You could then claim interest expenses, maintenance and upkeep costs etc associated with the property as it is actually a rental property.
The great Australian dream of home ownership extends to a beach house and many families have invested in a coastal property, some as part of a syndicate or combined family purchase in order to reduce the individual cost of the acquisition. This option may work for many investors and allows individuals the opportunity to ‘get into the market’ with a view to potentially moving to the property permanently in the future or buying out the other parties to own the investment property outright.
There are no guarantees in life and that includes the potential gains to be made from investing in property but the statistics from the past three decades certainly point towards the positive when it comes to capital growth – across Australia and in coastal regions such as Rainbow Beach.
Thomas Jefferson (3rd President of USA. 1743 – 1826)
Over the last three decades Australian house prices have recorded periods of extreme growth contrasted with periods of weakness. With the benefit of time, the peaks and troughs of house price growth tend to even out, with Australian house prices recording an average annual rate of growth of 8.4% (since 1980).
The Australian property market moves in cycles which are influenced by a wide range of factors including unemployment, interest rates, consumer confidence and of course previous rates of growth that impact on rental yields and levels of affordability on the consumer and particularly business investment.
Over the last three decades Australian house prices have increased at the average annual rate of 8.4%. That’s a pretty decent rate of growth when you consider that prices double every ten years based on an annual compounding rate of 7.2%. In comparison, the rate of inflation has averaged about 4.6% over the last 30 years and 3.2% over the last decade.
Of course, there have been some periods where growth rates have well and truly eclipsed this average rate of growth and periods where prices have underperformed.
As an example of one of the weakest periods for Australian house prices, over the five years from 1990 to 1995 the median house price across Australia increased by just 2.8% per annum. The soft market conditions came at a time when Australia was entering the “the recession we had to have” and unemployment raced upwards from 5.8% in January 1990 to peak at 10.9% in December 1992. Mortgage rates during this five year period averaged 11.75% and peaked at 17%. (And we think interest rates are high now!)
At the other end of the spectrum, the most spectacular five year run was recorded during the ‘boom’ which ran from 2001-03 around most areas of Australia. Despite a slowing in growth rates between 2004/05, the five year period ending July 2005 saw average house price growth of 13.9% per annum. In Rainbow Beach itself, house prices went up in the order of 30% within two years – this growth was unsustainable and has since seen a correction with prices receding approximately 10-15% since the peak of late 2007.
Currently the residential housing market is transitioning out of a strong growth phase, whilst economically the country is just starting to ramp up. Gross domestic product figures show the economy is once again growing at about 3.2%, unemployment is trending downwards, consumer confidence remains high and rental yields are showing the first signs of improvement after being eroded by value growth and lower rental rates during 2009. The Reserve Bank is signaling that they may be forced to increase interest rates as a result of strong inflation figures mostly due to the mining resources boom.
In contrast to the broad market drivers outlined above, we can expect there also to be factors that will dampen market demand. Interest rates are likely to increase at least once over the coming six months after increasing by 150 basis points since October last year. Population growth appears to have peaked and will most likely fall further as the proposed cuts to immigration are implemented and housing affordability is likely to become more of an issue in the larger metropolitan markets around Australia.
For prospective buyers it is worthwhile considering the long term trends in the market. The average length of tenure for Australian home owners is about 7.3 years; a time frame that is likely to smooth out the peaks and troughs of price growth encountered through the cycles. The economic and demographic foundations of the market remain solid which suggests that we are likely to see ongoing improvements in Australian house prices, albeit at a much more modest rate than we have seen in the past five years.
The key to success in investing in the residential property market is having a long term approach. Buying and selling property with a quick turn over approach limits the amount of capital growth the investment will realise and also incurs more costs such as sales commission, legal fees and stamp duty etc.
Purchasing an investment property in a coastal or regional area, as opposed to metropolitan areas, requires research and an ability to withstand the volatility of supply and demand cycles. The yield (rental return) is generally lower compared to properties in metropolitan areas due to demographic constraints. Ie. people living in coastal and regional areas are generally on lower incomes than people living in the city or more built up areas.
Advantages of purchasing a ‘lifestyle investment’ include the ability to utilise the property yourself whilst still having the ability to negative gear the asset and claim associated costs as a tax deduction. For example, you may plan your annual family holiday to include a week’s stay at your own beach side house or unit, whilst holiday letting the property for the remainder of the financial year. You could then claim interest expenses, maintenance and upkeep costs etc associated with the property as it is actually a rental property.
The great Australian dream of home ownership extends to a beach house and many families have invested in a coastal property, some as part of a syndicate or combined family purchase in order to reduce the individual cost of the acquisition. This option may work for many investors and allows individuals the opportunity to ‘get into the market’ with a view to potentially moving to the property permanently in the future or buying out the other parties to own the investment property outright.
There are no guarantees in life and that includes the potential gains to be made from investing in property but the statistics from the past three decades certainly point towards the positive when it comes to capital growth – across Australia and in coastal regions such as Rainbow Beach.
Lifestyle Investments - A Long Term Approach
"I'm a great believer in luck, and I find the harder I work the more I have of it."
Thomas Jefferson (3rd President of USA. 1743 – 1826)
Over the last three decades Australian house prices have recorded periods of extreme growth contrasted with periods of weakness. With the benefit of time, the peaks and troughs of house price growth tend to even out, with Australian house prices recording an average annual rate of growth of 8.4% (since 1980).
The Australian property market moves in cycles which are influenced by a wide range of factors including unemployment, interest rates, consumer confidence and of course previous rates of growth that impact on rental yields and levels of affordability on the consumer and particularly business investment.
Over the last three decades Australian house prices have increased at the average annual rate of 8.4%. That’s a pretty decent rate of growth when you consider that prices double every ten years based on an annual compounding rate of 7.2%. In comparison, the rate of inflation has averaged about 4.6% over the last 30 years and 3.2% over the last decade.
Of course, there have been some periods where growth rates have well and truly eclipsed this average rate of growth and periods where prices have underperformed.
As an example of one of the weakest periods for Australian house prices, over the five years from 1990 to 1995 the median house price across Australia increased by just 2.8% per annum. The soft market conditions came at a time when Australia was entering the “the recession we had to have” and unemployment raced upwards from 5.8% in January 1990 to peak at 10.9% in December 1992. Mortgage rates during this five year period averaged 11.75% and peaked at 17%. (And we think interest rates are high now!)
At the other end of the spectrum, the most spectacular five year run was recorded during the ‘boom’ which ran from 2001-03 around most areas of Australia. Despite a slowing in growth rates between 2004/05, the five year period ending July 2005 saw average house price growth of 13.9% per annum. In Rainbow Beach itself, house prices went up in the order of 30% within two years – this growth was unsustainable and has since seen a correction with prices receding approximately 10-15% since the peak of late 2007.
Currently the residential housing market is transitioning out of a strong growth phase, whilst economically the country is just starting to ramp up. Gross domestic product figures show the economy is once again growing at about 3.2%, unemployment is trending downwards, consumer confidence remains high and rental yields are showing the first signs of improvement after being eroded by value growth and lower rental rates during 2009. The Reserve Bank is signaling that they may be forced to increase interest rates as a result of strong inflation figures mostly due to the mining resources boom.
In contrast to the broad market drivers outlined above, we can expect there also to be factors that will dampen market demand. Interest rates are likely to increase at least once over the coming six months after increasing by 150 basis points since October last year. Population growth appears to have peaked and will most likely fall further as the proposed cuts to immigration are implemented and housing affordability is likely to become more of an issue in the larger metropolitan markets around Australia.
For prospective buyers it is worthwhile considering the long term trends in the market. The average length of tenure for Australian home owners is about 7.3 years; a time frame that is likely to smooth out the peaks and troughs of price growth encountered through the cycles. The economic and demographic foundations of the market remain solid which suggests that we are likely to see ongoing improvements in Australian house prices, albeit at a much more modest rate than we have seen in the past five years.
The key to success in investing in the residential property market is having a long term approach. Buying and selling property with a quick turn over approach limits the amount of capital growth the investment will realise and also incurs more costs such as sales commission, legal fees and stamp duty etc.
Purchasing an investment property in a coastal or regional area, as opposed to metropolitan areas, requires research and an ability to withstand the volatility of supply and demand cycles. The yield (rental return) is generally lower compared to properties in metropolitan areas due to demographic constraints. Ie. people living in coastal and regional areas are generally on lower incomes than people living in the city or more built up areas.
Advantages of purchasing a ‘lifestyle investment’ include the ability to utilise the property yourself whilst still having the ability to negative gear the asset and claim associated costs as a tax deduction. For example, you may plan your annual family holiday to include a week’s stay at your own beach side house or unit, whilst holiday letting the property for the remainder of the financial year. You could then claim interest expenses, maintenance and upkeep costs etc associated with the property as it is actually a rental property.
The great Australian dream of home ownership extends to a beach house and many families have invested in a coastal property, some as part of a syndicate or combined family purchase in order to reduce the individual cost of the acquisition. This option may work for many investors and allows individuals the opportunity to ‘get into the market’ with a view to potentially moving to the property permanently in the future or buying out the other parties to own the investment property outright.
There are no guarantees in life and that includes the potential gains to be made from investing in property but the statistics from the past three decades certainly point towards the positive when it comes to capital growth – across Australia and in coastal regions such as Rainbow Beach.
Monday, August 30, 2010
Rainbow Beach Property Trends
"Avoiding danger is not safer in the long run than outright exposure. Life is either a daring adventure, or nothing."
Helen Keller
By the time this month’s Community News hits the streets, we will have a new Priminister elect. The future of our economy will rest on the government’s shoulders fairly and squarely and it will be interesting to see whether or not the winner of the election can get us ‘back in the black’ by 2013 as promised. Hmmmmm….
The national property market could best be described as volatile over the past month or so with housing finance commitments for owner-occupied housing falling 3.9 per cent in June, (almost twice the market forecast of 2 per cent). (Source: The Courier Mail) AMP Capital Investors chief economist Shane Oliver said the fall pointed to an ongoing deterioration of the housing sector."It's basically telling us the housing recovery that we've seen over the last 18 months has come to an end," he said."Going forward we can't rely on housing construction to continue pushing the economy ahead, we're going to be more reliant on the consumer and particularly business investment."
A weakness in housing finance will also continue the weakness we're starting to see in house prices, which was only evident towards the end of June."It's another reason for the Reserve Bank to leave rates on hold," Dr Oliver said. CommSec economist Craig James said the figures, which were now at nine year lows, were "a bit of a concern". "They show continued weakness in the housing market," Mr James said. "In the last couple of months, investors had served to prop up the overall market but that wasn't the case this time around. "It must be starting to come as a concern for the authorities." He said Australia was now seeing "the loss of momentum" in the housing market, with housing finance commitments at nine year lows. "Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite." Weakness in retail spending, the housing market as well as manufacturing services and construction, were now revealing an economy that has "lost its way to some extent," he said.
Australia was still paying for the government stimulus which kicked in late last year, Craig James said. "It brought forward a lot of activity, but unfortunately in 2010 the market just dried up." Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
Many prospective buyers and investors have been sitting on the sidelines over the past 18 months, trying to predict the best time to buy. Often, it is difficult to pick the ‘bottom of the market’ or the exact right time to purchase and the best advice is probably to research the area you are looking to buy in and have a medium to long term strategy of holding the asset.
We have been doing some research on sales volumes and residential property price averages in Rainbow Beach over the past ten years and the trend over that period was quite interesting. There was obvious price growth and an increase in sales volumes during the periods 2002/2003 and again in 2007/2008; however there has been a significant reduction in both sales volumes and median prices since the beginning of 2008.
See the graph below:
These trends coincided with national residential and commercial property growth as well as ‘dips in the market’; most recently being the global financial crisis. Demand for ‘holiday homes’ and properties in coastal regions has decreased since the beginning of 2008 and values have therefore declined in line with that.
There is a clear anomaly in this graph which appears in 2008. The median sale price jumps dramatically due to an abnormally large number of high value units sold (ie. $1 million +) which drove the median price up. This median price line inevitably dropped back to ‘normal’ levels in 2009 as there were no further releases of units such as Rainbow Sea Resort or Plantation Resort. This also confirms our observation that buyer enquiry range remains in the $300,000 to $600,000 bracket.
Based on statistics, in our opinion, now is a great time to buy. Solid capital growth over the past decade is likely to continue and although there has been a correction in the market over the past two years, the long term capital growth prospects for Rainbow Beach are excellent. Surrounded by National Parks and on Fraser Island’s doorstep, yet only 2.5 hours from Brisbane – this is a destination that more and more people are discovering.
Helen Keller
By the time this month’s Community News hits the streets, we will have a new Priminister elect. The future of our economy will rest on the government’s shoulders fairly and squarely and it will be interesting to see whether or not the winner of the election can get us ‘back in the black’ by 2013 as promised. Hmmmmm….
The national property market could best be described as volatile over the past month or so with housing finance commitments for owner-occupied housing falling 3.9 per cent in June, (almost twice the market forecast of 2 per cent). (Source: The Courier Mail) AMP Capital Investors chief economist Shane Oliver said the fall pointed to an ongoing deterioration of the housing sector."It's basically telling us the housing recovery that we've seen over the last 18 months has come to an end," he said."Going forward we can't rely on housing construction to continue pushing the economy ahead, we're going to be more reliant on the consumer and particularly business investment."
A weakness in housing finance will also continue the weakness we're starting to see in house prices, which was only evident towards the end of June."It's another reason for the Reserve Bank to leave rates on hold," Dr Oliver said. CommSec economist Craig James said the figures, which were now at nine year lows, were "a bit of a concern". "They show continued weakness in the housing market," Mr James said. "In the last couple of months, investors had served to prop up the overall market but that wasn't the case this time around. "It must be starting to come as a concern for the authorities." He said Australia was now seeing "the loss of momentum" in the housing market, with housing finance commitments at nine year lows. "Certainly, the rate hikes that have been applied late last year and early last year are continuing to bite." Weakness in retail spending, the housing market as well as manufacturing services and construction, were now revealing an economy that has "lost its way to some extent," he said.
Australia was still paying for the government stimulus which kicked in late last year, Craig James said. "It brought forward a lot of activity, but unfortunately in 2010 the market just dried up." Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
Many prospective buyers and investors have been sitting on the sidelines over the past 18 months, trying to predict the best time to buy. Often, it is difficult to pick the ‘bottom of the market’ or the exact right time to purchase and the best advice is probably to research the area you are looking to buy in and have a medium to long term strategy of holding the asset.
We have been doing some research on sales volumes and residential property price averages in Rainbow Beach over the past ten years and the trend over that period was quite interesting. There was obvious price growth and an increase in sales volumes during the periods 2002/2003 and again in 2007/2008; however there has been a significant reduction in both sales volumes and median prices since the beginning of 2008.
See the graph below:
These trends coincided with national residential and commercial property growth as well as ‘dips in the market’; most recently being the global financial crisis. Demand for ‘holiday homes’ and properties in coastal regions has decreased since the beginning of 2008 and values have therefore declined in line with that.
There is a clear anomaly in this graph which appears in 2008. The median sale price jumps dramatically due to an abnormally large number of high value units sold (ie. $1 million +) which drove the median price up. This median price line inevitably dropped back to ‘normal’ levels in 2009 as there were no further releases of units such as Rainbow Sea Resort or Plantation Resort. This also confirms our observation that buyer enquiry range remains in the $300,000 to $600,000 bracket.
Based on statistics, in our opinion, now is a great time to buy. Solid capital growth over the past decade is likely to continue and although there has been a correction in the market over the past two years, the long term capital growth prospects for Rainbow Beach are excellent. Surrounded by National Parks and on Fraser Island’s doorstep, yet only 2.5 hours from Brisbane – this is a destination that more and more people are discovering.
Friday, July 30, 2010
Rainbow Beach Property Market Predictions
“Money can’t buy you happiness, but it can buy you a better form of it.”
A friend of ours
Calculated risk is generally considered to be where you estimate the possibility of failure and then try to define the probability of success versus failure prior to making a decision or undertaking some action. Fundamentally, if there is an element of uncertainty and a lack of guarantees or assurances, the risk of failure is increased but in many cases the potential gains are higher.
There are many investment options available today including shares, options, term deposits, managed funds, property (residential or commercial). Investors can choose to have a defined return by investing their money in vehicles such as term deposits however the disadvantage of this type of investment is that your return is limited to the defined amount.
Generally speaking, ‘safe’ investment options include blue chip shares (such as shares in a major bank) or residential property within 10km of a major city centre. Often, investors make decisions regarding the appeal of an investment based on either the returns (ie. dividends or rental income) or the projected capital growth of the investment.
With specific regard to investing in coastal or regional property; with the exception of residential property in mining towns/regions, the capital growth of the property is likely to be more attractive than the annual return through rental income. Values of coastal and regional properties tend to be more volatile than those within metropolitan areas – hence, the calculated risk approach to investing in these areas. Overall, the best advice for investing in a coastal region is to have a medium to long term approach. There should never be an expectation that you can purchase a beach house one year and sell it for a profit the next.
Property generally goes in cycles and the fluctuations in property values in coastal regions can be significant. A perfect example of value fluctuations in Rainbow Beach is the recent sales of a house on Larapinta Court. The property featured four bedrooms, a renovated bathroom with separate toilet, renovated kitchen and a single lock up garage. This property would’ve been appraised and more than likely achieved a sale price in the low to mid $400’s in late 2007/early 2008. The same house sold last month for $380,000.
Across the nation at present, there is a lot of discussion about the direction of the economy and house prices. Consumer sentiment figures published by Westpac and the Melbourne Institute in July points towards a resurgence in confidence amongst Australians during July. The Index gained 11.1% in July and has remained above 100 points (an index value of 100 is where optimists and pessimist are equally weighted) since June last year. (Source: RPData) Since interest rates started rising in October last year the Index had been trending downwards, however the July result brings the confidence measure back well above the five year average. This is great news for both the real estate and property market as well as retail sales.
The latest figures show that generally speaking, Australians remain reasonably optimistic about the nation’s economic prospects. A stabilisation in interest rates, strong job figures and some improvement in global financial markets are likely to be the main drivers behind the improvement. A separate section of the Consumer Sentiment Index is the ‘Time to Buy a Dwelling Index’ which has also seen a significant improvement during July. This Index recorded a 15.6% jump in July, suggesting that consumers are viewing a residential property purchase much more positively than they have been in recent times. (Source: RPData)
Even though there has been an improvement in the ‘Time to Buy a Dwelling Index,’ Australian’s remain much less optimistic about the real estate market than they were at this time last year. The index is down from a high in early 2008, highlighting the slowdown in market conditions that has been seen over the second quarter of 2010 (the RP Data-Rismark Hedonic Home Value Index showed home value growth has virtually stalled in April and May this year). Looking forward, the consumer mind set with regards to residential property is likely to be largely influenced by the perceived direction of interest rates as well as global economic conditions. The consensus seems to be that interest rates are likely to remain flat for the foreseeable future; however the big test will of course be CPI results which are released at the end of July. The Reserve Bank may be forced to act and raise rates to combat inflation.
Despite this, it is unlikely that we will see consumers viewing the residential property market with the same exuberance as they have previously (ie. late 2007 – early 2008), especially considering that value growth has slowed and the historically low interest rates seen throughout most of 2009 are well and truly behind us.
The banks and other lenders do not appear to be in any hurry to free up credit and this lack of liquidity has certainly affected investor’s ability to pursue opportunities.
From our viewpoint, the local property market has certainly ‘hit the bottom’ and has remained stable since the beginning of 2010. There has not been any evidence of further reductions in values over the course of this year and although we can’t see a property boom in the near future, the future looks positive with steady interest rates predicted and a continued resurgence in the mining sector.
A friend of ours
Calculated risk is generally considered to be where you estimate the possibility of failure and then try to define the probability of success versus failure prior to making a decision or undertaking some action. Fundamentally, if there is an element of uncertainty and a lack of guarantees or assurances, the risk of failure is increased but in many cases the potential gains are higher.
There are many investment options available today including shares, options, term deposits, managed funds, property (residential or commercial). Investors can choose to have a defined return by investing their money in vehicles such as term deposits however the disadvantage of this type of investment is that your return is limited to the defined amount.
Generally speaking, ‘safe’ investment options include blue chip shares (such as shares in a major bank) or residential property within 10km of a major city centre. Often, investors make decisions regarding the appeal of an investment based on either the returns (ie. dividends or rental income) or the projected capital growth of the investment.
With specific regard to investing in coastal or regional property; with the exception of residential property in mining towns/regions, the capital growth of the property is likely to be more attractive than the annual return through rental income. Values of coastal and regional properties tend to be more volatile than those within metropolitan areas – hence, the calculated risk approach to investing in these areas. Overall, the best advice for investing in a coastal region is to have a medium to long term approach. There should never be an expectation that you can purchase a beach house one year and sell it for a profit the next.
Property generally goes in cycles and the fluctuations in property values in coastal regions can be significant. A perfect example of value fluctuations in Rainbow Beach is the recent sales of a house on Larapinta Court. The property featured four bedrooms, a renovated bathroom with separate toilet, renovated kitchen and a single lock up garage. This property would’ve been appraised and more than likely achieved a sale price in the low to mid $400’s in late 2007/early 2008. The same house sold last month for $380,000.
Across the nation at present, there is a lot of discussion about the direction of the economy and house prices. Consumer sentiment figures published by Westpac and the Melbourne Institute in July points towards a resurgence in confidence amongst Australians during July. The Index gained 11.1% in July and has remained above 100 points (an index value of 100 is where optimists and pessimist are equally weighted) since June last year. (Source: RPData) Since interest rates started rising in October last year the Index had been trending downwards, however the July result brings the confidence measure back well above the five year average. This is great news for both the real estate and property market as well as retail sales.
The latest figures show that generally speaking, Australians remain reasonably optimistic about the nation’s economic prospects. A stabilisation in interest rates, strong job figures and some improvement in global financial markets are likely to be the main drivers behind the improvement. A separate section of the Consumer Sentiment Index is the ‘Time to Buy a Dwelling Index’ which has also seen a significant improvement during July. This Index recorded a 15.6% jump in July, suggesting that consumers are viewing a residential property purchase much more positively than they have been in recent times. (Source: RPData)
Even though there has been an improvement in the ‘Time to Buy a Dwelling Index,’ Australian’s remain much less optimistic about the real estate market than they were at this time last year. The index is down from a high in early 2008, highlighting the slowdown in market conditions that has been seen over the second quarter of 2010 (the RP Data-Rismark Hedonic Home Value Index showed home value growth has virtually stalled in April and May this year). Looking forward, the consumer mind set with regards to residential property is likely to be largely influenced by the perceived direction of interest rates as well as global economic conditions. The consensus seems to be that interest rates are likely to remain flat for the foreseeable future; however the big test will of course be CPI results which are released at the end of July. The Reserve Bank may be forced to act and raise rates to combat inflation.
Despite this, it is unlikely that we will see consumers viewing the residential property market with the same exuberance as they have previously (ie. late 2007 – early 2008), especially considering that value growth has slowed and the historically low interest rates seen throughout most of 2009 are well and truly behind us.
The banks and other lenders do not appear to be in any hurry to free up credit and this lack of liquidity has certainly affected investor’s ability to pursue opportunities.
From our viewpoint, the local property market has certainly ‘hit the bottom’ and has remained stable since the beginning of 2010. There has not been any evidence of further reductions in values over the course of this year and although we can’t see a property boom in the near future, the future looks positive with steady interest rates predicted and a continued resurgence in the mining sector.
Monday, June 21, 2010
Rainbow Beach Property Price Predictions
“Statistics: The only science that enables different experts using the same figures to draw different conclusions.”
Evan Esar
Believe it or not, but the average Australian’s annual income is $67,000 (Source: Australian Bureau of Statistics, Household Income and Income Distribution, Australia 2007-08). This figure may appear relatively high however it should be taken into account that there are extremes at either end of the scale. Ie. Personal incomes in excess of $1 million blow the average out and tend to ‘mask’ the lower income earners (less than $30,000 per annum).
There are some financial commentators believe that if house prices are in excess of 4 x the average annual family income, they are considered “unaffordable”. At present, Australian’s median house price is close to 7.5 times the average family income. This is almost twice the sustainable rate and some property data professionals believe it could point to problems over the long term.
In line with these statistics, recent media reports predicting the future of the Australian property market have featured the opinion of Jeremy Grantham. Grantham is the Chairman of the Board of Grantham Mayo Van Otterloo (GMO), a Boston based asset management firm well known among institutional investors, but relatively unknown to retail investors. He is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets.
Grantham has built much of his investing reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes. Grantham avoided investing in Japanese equities and real estate in the late eighties, as well as technology stocks during the internet bubble in the late nineties. (Source: Wikipedia)
Interestingly, in GMO's April 2010 Quarterly newsletter Grantham wrote about the tendency for all “bubbles” to revert to the mean saying “that Australia had an unmistakable housing bubble and that prices would need to come down by 42 per cent to return to the long-term trend…..You cannot possibly miss it."
As an example, he cited the British housing market bubble of 1989. At the time, he said people dismissed the bubble because there was no more rezoning, creating a land shortage and as such, they believed prices would rise forever. "Seven years later, in 1997, they hit the lowest multiple of family income since the record books started in 1945. It's always the same old argument; they are not making any more land". In Australia's case, Mr Grantham described the housing market as a "time bomb" just waiting for interest rates to increase and become impossible to support. Since last October, the Reserve Bank has raised the official cash rate six times. If the Australian housing market did not return to the normal multiple of family income, he said "it will be the first time in history…. sooner or later, the rates will go up and the game is over." Grantham’s opinion reflects that of our own Professor Steven Keen who boldly predicted back in 2007 that Australian property values would decrease in the order of 40%.
The Reserve Bank of Australia (RBA) has downplayed concerns over a house price “bubble” in Australia, but painted a bleak picture for heavily indebted governments (ie. Europe and the USA). RBA deputy governor, Ric Battellino, said at a business function in mid June: “house prices in Australia, relative to income, were reasonable …. people feel that house prices in Australia are quite high and that's quite often because the ratio of house prices to income that are published for Australia tend to focus mainly on prices in the cities, and they are quite elevated." Mr Battellino went on to say: "But, if you look across the whole country, the ratio of house prices to income is not that different from most other countries."
The argument against Grantham and Keen’s logic centres on the fact that there is simply too much demand for housing in Australia for prices to dramatically decrease. Natural population growth and immigration have led to a shortage of housing in many areas and this in turn leads to higher prices. Where there is an inherent oversupply of properties, there have been casualties of the GFC and this has led to situations of too much stock on the market and a lack of demand = lower prices.
Overall, the fundamentals of property values rest on the location and surrounding amenities of the investment itself. Access to public transport, main roads, schooling, shops, sporting/recreational and health facilities will always be important to investors and owner occupiers however the natural surroundings of a property also have an influence on buyers. Whilst the cost of building/construction along with developing land and supplying infrastructure such as power, water and sewage remains relatively high – prices should remain stable despite the dire predictions of some.
Evan Esar
Believe it or not, but the average Australian’s annual income is $67,000 (Source: Australian Bureau of Statistics, Household Income and Income Distribution, Australia 2007-08). This figure may appear relatively high however it should be taken into account that there are extremes at either end of the scale. Ie. Personal incomes in excess of $1 million blow the average out and tend to ‘mask’ the lower income earners (less than $30,000 per annum).
There are some financial commentators believe that if house prices are in excess of 4 x the average annual family income, they are considered “unaffordable”. At present, Australian’s median house price is close to 7.5 times the average family income. This is almost twice the sustainable rate and some property data professionals believe it could point to problems over the long term.
In line with these statistics, recent media reports predicting the future of the Australian property market have featured the opinion of Jeremy Grantham. Grantham is the Chairman of the Board of Grantham Mayo Van Otterloo (GMO), a Boston based asset management firm well known among institutional investors, but relatively unknown to retail investors. He is regarded as a highly knowledgeable investor in various stock, bond, and commodity markets.
Grantham has built much of his investing reputation over his long career by correctly identifying speculative market "bubbles" as they were happening and steering clients' assets clear of impending crashes. Grantham avoided investing in Japanese equities and real estate in the late eighties, as well as technology stocks during the internet bubble in the late nineties. (Source: Wikipedia)
Interestingly, in GMO's April 2010 Quarterly newsletter Grantham wrote about the tendency for all “bubbles” to revert to the mean saying “that Australia had an unmistakable housing bubble and that prices would need to come down by 42 per cent to return to the long-term trend…..You cannot possibly miss it."
As an example, he cited the British housing market bubble of 1989. At the time, he said people dismissed the bubble because there was no more rezoning, creating a land shortage and as such, they believed prices would rise forever. "Seven years later, in 1997, they hit the lowest multiple of family income since the record books started in 1945. It's always the same old argument; they are not making any more land". In Australia's case, Mr Grantham described the housing market as a "time bomb" just waiting for interest rates to increase and become impossible to support. Since last October, the Reserve Bank has raised the official cash rate six times. If the Australian housing market did not return to the normal multiple of family income, he said "it will be the first time in history…. sooner or later, the rates will go up and the game is over." Grantham’s opinion reflects that of our own Professor Steven Keen who boldly predicted back in 2007 that Australian property values would decrease in the order of 40%.
The Reserve Bank of Australia (RBA) has downplayed concerns over a house price “bubble” in Australia, but painted a bleak picture for heavily indebted governments (ie. Europe and the USA). RBA deputy governor, Ric Battellino, said at a business function in mid June: “house prices in Australia, relative to income, were reasonable …. people feel that house prices in Australia are quite high and that's quite often because the ratio of house prices to income that are published for Australia tend to focus mainly on prices in the cities, and they are quite elevated." Mr Battellino went on to say: "But, if you look across the whole country, the ratio of house prices to income is not that different from most other countries."
The argument against Grantham and Keen’s logic centres on the fact that there is simply too much demand for housing in Australia for prices to dramatically decrease. Natural population growth and immigration have led to a shortage of housing in many areas and this in turn leads to higher prices. Where there is an inherent oversupply of properties, there have been casualties of the GFC and this has led to situations of too much stock on the market and a lack of demand = lower prices.
Overall, the fundamentals of property values rest on the location and surrounding amenities of the investment itself. Access to public transport, main roads, schooling, shops, sporting/recreational and health facilities will always be important to investors and owner occupiers however the natural surroundings of a property also have an influence on buyers. Whilst the cost of building/construction along with developing land and supplying infrastructure such as power, water and sewage remains relatively high – prices should remain stable despite the dire predictions of some.
Wednesday, June 2, 2010
Housing undersupply and it's impact on the local property market
“A budget tells us what we can't afford, but it doesn't keep us from buying it.”
William Feather
For those of you who really like figures and statistics – you will get a kick out of this month’s article. The property market across the board could best be described as a ‘mixed bag’ with Western Australia and Melbourne going gangbusters whilst much of the remainder of the nation is still experiencing a general lack of demand and urgency from buyers. The Rainbow Beach market remains sluggish and although properties are still selling, we are still well below average sales volumes. As stated in our May article, we believe we have hit the bottom of this market cycle – the only question is – how long will the ‘bottom’ last?
National housing finance data recently released showed a further slowdown across the property market. On a seasonally adjusted basis, owner occupier finance commitments for: construction of new dwellings (-7.3%), purchase of new dwellings (-3.2%), purchase of established dwellings (-2.9%) and total owner occupier loans (-3.4%) all recorded falls during March 2010. Over the year to March 2010 only commitments for construction of new dwellings has increased, albeit by only a small percentage, 1.6%. Meanwhile, on an annual basis, finance for the purchase of new dwellings is down -21.7%, finance for established dwellings is down -26.0% and total owner occupier loans are down -23.3%. (Source: RP Data April 2010)
These figures represent the continued effects of the Global Financial Crisis despite an apparent recovery in the resource sector which seems to be taking its’ time in cheering up pessimistic and almost paranoid investors.
Again at the national level, the Federal Government’s National Housing Supply Council recently released their second State of Supply Report. Probably the most important finding of the 228 page document was the estimate that nationally there is a cumulative undersupply of 178,400 dwellings. The greatest undersupply in dwellings was found to be within New South Wales (57,600) and Queensland (56,100). The states with the smallest estimated shortfall in housing were found to be: South Australia (100) and Tasmania (1,000). See the graph below:
Source: RP Data April 2010
This data supports the view that Australia will face a major housing crisis in the very near future and raises the issue of further development as it is needed to meet the demand. Although environmental, community and social needs are important and should always be taken into consideration – it is evident that at some point – a compromise will need to be made.
South-east Queensland’s population is predicted to increase dramatically over the next 5-10 years and beyond through immigration, births and the aging population (ie. People are living longer and the number of births per year is greater than the number of deaths). This will place a huge amount of pressure on both the State Government and Local Councils to provide housing solutions for tens of thousands of Queenslanders. Infrastructure is vital to support this population growth and hand-in-hand with this is providing affordable, residential options for individuals and families are paramount.
What affect these housing undersupply issues will have on our local property market remains to be seen however it is certain that it will have an impact in the medium to long term. The pressure for further development in and around our region will also increase as a result of the resources boom as workers look for housing within a radius of centres such as Gladstone, Rockhampton, Bundaberg and Maryborough.
William Feather
For those of you who really like figures and statistics – you will get a kick out of this month’s article. The property market across the board could best be described as a ‘mixed bag’ with Western Australia and Melbourne going gangbusters whilst much of the remainder of the nation is still experiencing a general lack of demand and urgency from buyers. The Rainbow Beach market remains sluggish and although properties are still selling, we are still well below average sales volumes. As stated in our May article, we believe we have hit the bottom of this market cycle – the only question is – how long will the ‘bottom’ last?
National housing finance data recently released showed a further slowdown across the property market. On a seasonally adjusted basis, owner occupier finance commitments for: construction of new dwellings (-7.3%), purchase of new dwellings (-3.2%), purchase of established dwellings (-2.9%) and total owner occupier loans (-3.4%) all recorded falls during March 2010. Over the year to March 2010 only commitments for construction of new dwellings has increased, albeit by only a small percentage, 1.6%. Meanwhile, on an annual basis, finance for the purchase of new dwellings is down -21.7%, finance for established dwellings is down -26.0% and total owner occupier loans are down -23.3%. (Source: RP Data April 2010)
These figures represent the continued effects of the Global Financial Crisis despite an apparent recovery in the resource sector which seems to be taking its’ time in cheering up pessimistic and almost paranoid investors.
Again at the national level, the Federal Government’s National Housing Supply Council recently released their second State of Supply Report. Probably the most important finding of the 228 page document was the estimate that nationally there is a cumulative undersupply of 178,400 dwellings. The greatest undersupply in dwellings was found to be within New South Wales (57,600) and Queensland (56,100). The states with the smallest estimated shortfall in housing were found to be: South Australia (100) and Tasmania (1,000). See the graph below:
Source: RP Data April 2010
This data supports the view that Australia will face a major housing crisis in the very near future and raises the issue of further development as it is needed to meet the demand. Although environmental, community and social needs are important and should always be taken into consideration – it is evident that at some point – a compromise will need to be made.
South-east Queensland’s population is predicted to increase dramatically over the next 5-10 years and beyond through immigration, births and the aging population (ie. People are living longer and the number of births per year is greater than the number of deaths). This will place a huge amount of pressure on both the State Government and Local Councils to provide housing solutions for tens of thousands of Queenslanders. Infrastructure is vital to support this population growth and hand-in-hand with this is providing affordable, residential options for individuals and families are paramount.
What affect these housing undersupply issues will have on our local property market remains to be seen however it is certain that it will have an impact in the medium to long term. The pressure for further development in and around our region will also increase as a result of the resources boom as workers look for housing within a radius of centres such as Gladstone, Rockhampton, Bundaberg and Maryborough.
Wednesday, May 5, 2010
A light at the end of the tunnel for the Rainbow Beach property market?
“There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction.”
John F. Kennedy (1917-1963)
The optimistic view of the local property market we expressed in our last article has been backed up by data and comments from experts published throughout last month. Although the last two years has seen a decline in both values and demand, the future looks bright. Unemployment figures are better than expected, interest rates are still historically low and despite dire predictions from so called experts (ie. Professor Steven Keen) the sky has not fallen down and Australia appears to have weathered the GFC relatively well.
As the economy improves, tourism picks up and the resources sector gathers pace, regional markets may start to show a better performance. In cyclical terms, regional markets tend to lag behind the capital cities with demand rippling outwards from the capitals as more buyers seek the relative affordability of regional housing markets.
If that is the case, many of the regional markets around Australia may currently present solid growth opportunities for astute buyers. (Source: RPData April 2010)
On Queensland’s Sunshine Coast, which is the third most populous statistical division in the State after Brisbane and the Gold Coast, house values have increased by just 4.7 per cent per annum over the last five years compared to Brisbane’s annual capital gains of 7.0 per cent. Sunshine Coast values fell by 6.8 percent between March 2008 and May 2009 (peak to trough) and still remain 1.4 per cent below their peak. (Source: RPData April 2010)
In some areas around Australia the number of premium sales remains well below average. These regions are mainly characterised by coastal markets outside the capital cities where conditions remain soft. The number of million dollar plus house and unit sales on The Gold Coast, Sunshine Coast, Tweed Coast and Byron Shire are about 55 per cent lower than what they were in 2007. (Source: RPData April 2010)
For those that can afford the price tag, premium property markets have generally provided stronger capital gains than the broader market place thanks to the inherently tight supply of inner city, coastal and character properties.
Property market experts have indicated that the tourism and holiday home markets have reached the bottom of the cycle and with predicted increases in tourism numbers and ultimately tourism dollars to be spent as the economy recovers, this will lead to an increase in demand for property in ‘tourist centric’ locations such as Rainbow Beach.
As the average Australian realises that the worst of the economic crisis has passed and they inevitably begin to spend again, money will start to flow back into domestic tourism and discretionary purchases such as holiday homes. The Banks appear to have loosened up their lending criteria somewhat with personal and business borrowings marginally easier to get approved now compared to back in mid 2009. Lenders are looking for relatively low-risk investors but at least they are returning calls these days.
Overall, the signs look to be pointing towards an imminent recovery in the local property market. Although recent sales indicate prices are still approximately 10% below the peak of 07/08, demand should increase over the next 12-18 months. We’re not saying there’s a boom on the horizon but we are confident that we’ve seen the bottom of this market cycle.
John F. Kennedy (1917-1963)
The optimistic view of the local property market we expressed in our last article has been backed up by data and comments from experts published throughout last month. Although the last two years has seen a decline in both values and demand, the future looks bright. Unemployment figures are better than expected, interest rates are still historically low and despite dire predictions from so called experts (ie. Professor Steven Keen) the sky has not fallen down and Australia appears to have weathered the GFC relatively well.
As the economy improves, tourism picks up and the resources sector gathers pace, regional markets may start to show a better performance. In cyclical terms, regional markets tend to lag behind the capital cities with demand rippling outwards from the capitals as more buyers seek the relative affordability of regional housing markets.
If that is the case, many of the regional markets around Australia may currently present solid growth opportunities for astute buyers. (Source: RPData April 2010)
On Queensland’s Sunshine Coast, which is the third most populous statistical division in the State after Brisbane and the Gold Coast, house values have increased by just 4.7 per cent per annum over the last five years compared to Brisbane’s annual capital gains of 7.0 per cent. Sunshine Coast values fell by 6.8 percent between March 2008 and May 2009 (peak to trough) and still remain 1.4 per cent below their peak. (Source: RPData April 2010)
In some areas around Australia the number of premium sales remains well below average. These regions are mainly characterised by coastal markets outside the capital cities where conditions remain soft. The number of million dollar plus house and unit sales on The Gold Coast, Sunshine Coast, Tweed Coast and Byron Shire are about 55 per cent lower than what they were in 2007. (Source: RPData April 2010)
For those that can afford the price tag, premium property markets have generally provided stronger capital gains than the broader market place thanks to the inherently tight supply of inner city, coastal and character properties.
Property market experts have indicated that the tourism and holiday home markets have reached the bottom of the cycle and with predicted increases in tourism numbers and ultimately tourism dollars to be spent as the economy recovers, this will lead to an increase in demand for property in ‘tourist centric’ locations such as Rainbow Beach.
As the average Australian realises that the worst of the economic crisis has passed and they inevitably begin to spend again, money will start to flow back into domestic tourism and discretionary purchases such as holiday homes. The Banks appear to have loosened up their lending criteria somewhat with personal and business borrowings marginally easier to get approved now compared to back in mid 2009. Lenders are looking for relatively low-risk investors but at least they are returning calls these days.
Overall, the signs look to be pointing towards an imminent recovery in the local property market. Although recent sales indicate prices are still approximately 10% below the peak of 07/08, demand should increase over the next 12-18 months. We’re not saying there’s a boom on the horizon but we are confident that we’ve seen the bottom of this market cycle.
Saturday, March 27, 2010
Rainbow Beach Property Market Predictions
“Interest rates are going to go up because employment is going to go up. If employment goes up, then our apartments get filled. And if employment goes up, our office buildings get filled. The reality is that increased economic activity combined with increased interest rates is basically bullish for real estate.”
Sam Zell
Ok, so this month we’re going to (figuratively) go out on a limb and suggest that we think their might be a light at the end of this tunnel and that we should probably be seeing it soon. What we are referring to by the term ‘tunnel’ is the significant reduction in both sales volumes and values within Rainbow Beach over the past 2 years. Since the first quarter of 2008, Rainbow Beach has had less than half the amount of sales that would normally be recorded (based on the average from 2001). For example - the number of sales in both 2008 and 2009 combined was only 75% ofthe total number of sales for the entire 2007 calendar year.
From the sales figures, it can be extrapolated that the past two calendar years have seen a significant downturn in the local property market and this has seen an increased number of properties on the market for extended periods.
The reduction in sales volumes in Rainbow Beach coincided with the Global Financial Crisis and the fallout was that those in the higher income earning demographic reined in spending and became much more conservative with their financial decisions. This was coupled with the fact that some holiday house/unit owners made the decision to sell their property in order to become less exposed to debt. This led to the lethal combination of high stock levels and lower buyer demand.
Based on recent national economic data, both consumer and business confidence levels are on the rise. For the property market these are positive signs. High levels of confidence generally translate to higher levels of market activity as more consumers are willing to make such a high commitment decision as purchasing a property.
Many coastal and regional areas have generally seen stronger price growth during the last ten years thanks to mining and resource booms coupled with the fact that their prices have come from a very low base.
The mining and resources boom looks set to continue so we would expect that many of the existing areas plus new ones which will undoubtedly evolve will continue to have a solid capital growth. “In ten years time we’d also expect that given our growing population which is heavily centralised, areas closer to major capital cities will probably fare much better in terms of price growth than they have during the last decade.” (Source: RP Date Property Pulse 19 March 2010)
Plans for mining projects in the Galilee Basin (western Queensland near Emerald/Barcaldine) include major infrastructure and expansion including the construction of additional rail lines as well as jobs for thousands for workers over the next 10-20 years and this will have a flow on effect for the rest of Queensland.
Low unemployment levels and higher median incomes means more discretionary spending which is good news for luxury car and boat dealers as well as real estate in coastal and regional areas. Once people are confident that their income is secure, lifestyle purchases go back on the agenda and the economy in general moves back onto an even keel. We aren’t there yet, but all the signs indicate that we’re heading in the right direction!
Based on the table displaying sales volumes in Rainbow Beach over the past decade, historical evidence proves that a significant number of properties can change hands over the course of any given year. On average, 96 properties have sold in Rainbow Beach each calendar year since 2001 and there is no doubt that there will be a return to these figures. The high number of sales over the period 2002/2003 seemingly came without warning and this will happen again. So, if you are a buyer sitting on the sidelines waiting for the perfect time to buy …. don’t wait too long or you might just miss your opportunity.
Sam Zell
Ok, so this month we’re going to (figuratively) go out on a limb and suggest that we think their might be a light at the end of this tunnel and that we should probably be seeing it soon. What we are referring to by the term ‘tunnel’ is the significant reduction in both sales volumes and values within Rainbow Beach over the past 2 years. Since the first quarter of 2008, Rainbow Beach has had less than half the amount of sales that would normally be recorded (based on the average from 2001). For example - the number of sales in both 2008 and 2009 combined was only 75% ofthe total number of sales for the entire 2007 calendar year.
From the sales figures, it can be extrapolated that the past two calendar years have seen a significant downturn in the local property market and this has seen an increased number of properties on the market for extended periods.
The reduction in sales volumes in Rainbow Beach coincided with the Global Financial Crisis and the fallout was that those in the higher income earning demographic reined in spending and became much more conservative with their financial decisions. This was coupled with the fact that some holiday house/unit owners made the decision to sell their property in order to become less exposed to debt. This led to the lethal combination of high stock levels and lower buyer demand.
Based on recent national economic data, both consumer and business confidence levels are on the rise. For the property market these are positive signs. High levels of confidence generally translate to higher levels of market activity as more consumers are willing to make such a high commitment decision as purchasing a property.
Many coastal and regional areas have generally seen stronger price growth during the last ten years thanks to mining and resource booms coupled with the fact that their prices have come from a very low base.
The mining and resources boom looks set to continue so we would expect that many of the existing areas plus new ones which will undoubtedly evolve will continue to have a solid capital growth. “In ten years time we’d also expect that given our growing population which is heavily centralised, areas closer to major capital cities will probably fare much better in terms of price growth than they have during the last decade.” (Source: RP Date Property Pulse 19 March 2010)
Plans for mining projects in the Galilee Basin (western Queensland near Emerald/Barcaldine) include major infrastructure and expansion including the construction of additional rail lines as well as jobs for thousands for workers over the next 10-20 years and this will have a flow on effect for the rest of Queensland.
Low unemployment levels and higher median incomes means more discretionary spending which is good news for luxury car and boat dealers as well as real estate in coastal and regional areas. Once people are confident that their income is secure, lifestyle purchases go back on the agenda and the economy in general moves back onto an even keel. We aren’t there yet, but all the signs indicate that we’re heading in the right direction!
Based on the table displaying sales volumes in Rainbow Beach over the past decade, historical evidence proves that a significant number of properties can change hands over the course of any given year. On average, 96 properties have sold in Rainbow Beach each calendar year since 2001 and there is no doubt that there will be a return to these figures. The high number of sales over the period 2002/2003 seemingly came without warning and this will happen again. So, if you are a buyer sitting on the sidelines waiting for the perfect time to buy …. don’t wait too long or you might just miss your opportunity.
Thursday, February 25, 2010
March Update - Proposed Developments for Rainbow Beach and Surrounds
“It's tangible, it's solid, it's beautiful. It's artistic, from my standpoint, and
I just love real estate.”
Donald Trump
The month of February saw plenty of visitors still heading to Rainbow and taking advantage of the off peak rates on accommodation. Even in the busiest of weeks, you can still find your own patch of beach but it is especially unique at this time of year when you can often walk for over an hour along the shoreline and see either one or two people or no one at all. There aren’t many beaches in the world that you can say that about.
There has been some discussion regarding future development and progress in the region and much of that has centred around the proposed Tin Can Bay Marina, upgrade of facilities at Camp Kerr and Rainbow Shores Stage Two. Issues relating to development have always been contentious and those effecting our community are no different.
The State Government (specifically the Department of Environment and Resource Management or DERM) has decided to suspend work on the Inskip Point Master Plan until a final decision has been made on the Rainbow Shores Stage Two development. This will hold up any major infrastructure in the area for up to two years or more.
On August 17, 2009, DERM instructed Gympie Regional Council to refuse the Rainbow Shores Stage Two material change of use application, effectively halting the development. However, Rainbow Shores Pty Ltd has appealed the decision and the case will now be heard in the Land and Environment Court in early April.
The Gympie Regional Council appears to back development in and around Rainbow Beach, with Councillor Larry Friske agreeing that everything is basically on hold at Rainbow Beach at the moment. “We would like too to see some more land opened up at Rainbow, whether it is Krauchi’s land or someone else’s,” Councillor Friske said. He went on to say “There is not a lot of opportunity for growth there at the moment”.
Without going into the specifics, there does not appear to be many other options for growth in Rainbow Beach aside from Rainbow Shores Pty Ltd development lease. As previously stated in our Realty Deal articles, the prospect of no future growth or development in town is not necessarily a good thing. Not good for local businesses and not good for the youth in our community either.
On a separate issue, there was standing room only when the Australian Army addressed local construction industry representatives and sub-contractors on opportunities offered by the $60 million upgrade of the facilities at Camp Kerr near Tin Can Bay.
Department of Defence officials reportedly spoke about the project and supplied local building contractors, and companies capable of delivering packages, with what they needed to tender for jobs and what the work would entail.
The $60 million upgrade is purported to provide a variety of training areas and ranges to support the Army’s 7th Brigade which is currently based at Enoggera in Brisbane. This does not represent sufficient funding to move Army units from Brisbane to Camp Kerr.
Many locals are still wondering what Woolworths knows that the rest of us don’t ….. why is it that a huge company would sink $15 million into a shopping centre built on $2.7 million worth of land with less than 6000 customers in a 25 kilometre radius? Hmmm…..
I just love real estate.”
Donald Trump
The month of February saw plenty of visitors still heading to Rainbow and taking advantage of the off peak rates on accommodation. Even in the busiest of weeks, you can still find your own patch of beach but it is especially unique at this time of year when you can often walk for over an hour along the shoreline and see either one or two people or no one at all. There aren’t many beaches in the world that you can say that about.
There has been some discussion regarding future development and progress in the region and much of that has centred around the proposed Tin Can Bay Marina, upgrade of facilities at Camp Kerr and Rainbow Shores Stage Two. Issues relating to development have always been contentious and those effecting our community are no different.
The State Government (specifically the Department of Environment and Resource Management or DERM) has decided to suspend work on the Inskip Point Master Plan until a final decision has been made on the Rainbow Shores Stage Two development. This will hold up any major infrastructure in the area for up to two years or more.
On August 17, 2009, DERM instructed Gympie Regional Council to refuse the Rainbow Shores Stage Two material change of use application, effectively halting the development. However, Rainbow Shores Pty Ltd has appealed the decision and the case will now be heard in the Land and Environment Court in early April.
The Gympie Regional Council appears to back development in and around Rainbow Beach, with Councillor Larry Friske agreeing that everything is basically on hold at Rainbow Beach at the moment. “We would like too to see some more land opened up at Rainbow, whether it is Krauchi’s land or someone else’s,” Councillor Friske said. He went on to say “There is not a lot of opportunity for growth there at the moment”.
Without going into the specifics, there does not appear to be many other options for growth in Rainbow Beach aside from Rainbow Shores Pty Ltd development lease. As previously stated in our Realty Deal articles, the prospect of no future growth or development in town is not necessarily a good thing. Not good for local businesses and not good for the youth in our community either.
On a separate issue, there was standing room only when the Australian Army addressed local construction industry representatives and sub-contractors on opportunities offered by the $60 million upgrade of the facilities at Camp Kerr near Tin Can Bay.
Department of Defence officials reportedly spoke about the project and supplied local building contractors, and companies capable of delivering packages, with what they needed to tender for jobs and what the work would entail.
The $60 million upgrade is purported to provide a variety of training areas and ranges to support the Army’s 7th Brigade which is currently based at Enoggera in Brisbane. This does not represent sufficient funding to move Army units from Brisbane to Camp Kerr.
Many locals are still wondering what Woolworths knows that the rest of us don’t ….. why is it that a huge company would sink $15 million into a shopping centre built on $2.7 million worth of land with less than 6000 customers in a 25 kilometre radius? Hmmm…..
Monday, January 25, 2010
February 2010 Community News Article - New Development
“Genius is one percent inspiration and ninety-nine percent perspiration.”
Thomas Edison
The Christmas holidays certainly proved to be busy as usual and we had plenty of visitors and guests looking at property and considering a holiday home of their own. It is sometimes the case that people expect the rental returns on a holiday property to be higher than what is realistically attainable and as we always say “if a holiday house by the beach paid for itself – everyone would have one.”
Overall, the Rainbow Beach property market remains steady with existing homes and units from $250,000 - $750,000 generally representing good value when compared to vacant land. Generally speaking, a “typical” three bedroom, two bathroom house within 10 minutes walk of the beach will sell for between $450,000 - $600,000 (this doesn’t include properties within 300 metres of the beach). Conversely, a block of vacant land with similar proximity to the beach might be worth anywhere from $300,000 - $400,000. With current building costs, the construction of a new home will generally cost between $250,000 and $350,000 (depending on materials utilised and the standard of fixtures and fittings). In saying that - many prospective buyers prefer the option of a “blank canvas” in order for them to make their own choice on design and layout.
Beyond Rainbow Beach and across the nation, media reports are pointing towards a recovery and even “mini booms” in certain property markets -particularly in metropolitan areas such as Melbourne and Brisbane. Often there is significant “lag time” for these trends to hit coastal and regional areas and this accounts for the sometimes considerably steep upturns and downturns that affect many beachside towns and rural areas over time.
Without trying to necessarily predict the future, we feel that the local property market is likely to experience a slow recovery throughout 2010 with prices having stabilised since the “lowlights” of the latter part of 2008 and the first half of 2009. Prices should firm up across all sectors but we are not likely to see significant value increases or strong demand for property until 2011/2012.
In terms of future development and new stock to the market, Rainbow Shores will see construction begin on the Bluewater Lodges in March this year. The site will have 36 three bedroom, two bathroom, single carport lodges within a complex which will incorporate a 20 metre lap pool, outdoor spa and professionally equipped gym. Stage One prices start from $465,000 with an average price of $495,000 – which is really a niche price point in the unit/townhouse market within Rainbow Beach. (At present, there are affordable units within both the Rainbow Shores and Getaway Resorts where you can purchase a one bedroom unit for less than $200,000, a two bedroom unit for less than $250,000 or a three bedroom unit for less than $300,000. At the other end of the scale are the Plantation, Rainbow Sea and Ocean Palms Resort where the entry level is closer to $800,000.)
Construction on the Bluewater Lodges complex will provide a boost to the local economy and many local businesses will benefit either directly or indirectly through the employment of local tradesman, or the opportunity to accommodate, entertain and cater for those that are working on the site.
Thomas Edison
The Christmas holidays certainly proved to be busy as usual and we had plenty of visitors and guests looking at property and considering a holiday home of their own. It is sometimes the case that people expect the rental returns on a holiday property to be higher than what is realistically attainable and as we always say “if a holiday house by the beach paid for itself – everyone would have one.”
Overall, the Rainbow Beach property market remains steady with existing homes and units from $250,000 - $750,000 generally representing good value when compared to vacant land. Generally speaking, a “typical” three bedroom, two bathroom house within 10 minutes walk of the beach will sell for between $450,000 - $600,000 (this doesn’t include properties within 300 metres of the beach). Conversely, a block of vacant land with similar proximity to the beach might be worth anywhere from $300,000 - $400,000. With current building costs, the construction of a new home will generally cost between $250,000 and $350,000 (depending on materials utilised and the standard of fixtures and fittings). In saying that - many prospective buyers prefer the option of a “blank canvas” in order for them to make their own choice on design and layout.
Beyond Rainbow Beach and across the nation, media reports are pointing towards a recovery and even “mini booms” in certain property markets -particularly in metropolitan areas such as Melbourne and Brisbane. Often there is significant “lag time” for these trends to hit coastal and regional areas and this accounts for the sometimes considerably steep upturns and downturns that affect many beachside towns and rural areas over time.
Without trying to necessarily predict the future, we feel that the local property market is likely to experience a slow recovery throughout 2010 with prices having stabilised since the “lowlights” of the latter part of 2008 and the first half of 2009. Prices should firm up across all sectors but we are not likely to see significant value increases or strong demand for property until 2011/2012.
In terms of future development and new stock to the market, Rainbow Shores will see construction begin on the Bluewater Lodges in March this year. The site will have 36 three bedroom, two bathroom, single carport lodges within a complex which will incorporate a 20 metre lap pool, outdoor spa and professionally equipped gym. Stage One prices start from $465,000 with an average price of $495,000 – which is really a niche price point in the unit/townhouse market within Rainbow Beach. (At present, there are affordable units within both the Rainbow Shores and Getaway Resorts where you can purchase a one bedroom unit for less than $200,000, a two bedroom unit for less than $250,000 or a three bedroom unit for less than $300,000. At the other end of the scale are the Plantation, Rainbow Sea and Ocean Palms Resort where the entry level is closer to $800,000.)
Construction on the Bluewater Lodges complex will provide a boost to the local economy and many local businesses will benefit either directly or indirectly through the employment of local tradesman, or the opportunity to accommodate, entertain and cater for those that are working on the site.
Sunday, January 3, 2010
January 2010 Community News Article
Quote of the month:
“The future, according to some scientists, will be exactly like the past, only far more expensive.”
John Sladek
Phew…. Christmas is over for another year! By the time this Community News hits the streets we will have braved the mayhem of Christmas and Boxing Day as well as the revelry of New Years Eve. We hope everyone thoroughly enjoyed the festive season and didn’t get too caught up in the traffic jams of the main street during such a busy time.
This month we would like to recognise some of our most valuable tenants. The backbone of most real estate businesses is in its permanent rent roll and thanks to our Permanent Rental Manager, Kim McIlroy – Cooloola Coast Realty - Rainbow Beach has a solid permanent rental portfolio.
Kim has assessed all of our tenants against a set of criteria including rental arrears, harmonious relationships with neighbours, maintenance of the property, etc and she has identified a number who have gone above and beyond their responsibilities in terms of their rental agreement.
A few of our tenants were recognised this month by their property owners for exceptional conduct of tenancy in the property they reside in. There was a tough decision to make as we have so many good tenants. After careful deliberation, we arranged for the top three to be awarded with gifts to show our appreciation as well as the appreciation of the property owners.
Just prior to Christmas, the following tenants were presented with gifts provided by the property owners in recognition of their excellent tenancy:
First prize went to Chrissy & Henry Fleming as well as Kaylah Fallo. Second prize was awarded to Byron Rush and third prize went to Kathy Beer and Michael Greenbury.
Congratulations to these tenants and thank you to all our landlords who entrust us with the management of their asset.
In other Rainbow Beach real estate news, enquiry levels for residential sales have increased over the past two months and the prospects for a return to more ‘normal’ sales volumes (based on the 20 year average for Rainbow Beach) are looking positive. Prices have steadied and are still down from the peak of late 2007/early 2008 however values have held throughout 2009.
“The future, according to some scientists, will be exactly like the past, only far more expensive.”
John Sladek
Phew…. Christmas is over for another year! By the time this Community News hits the streets we will have braved the mayhem of Christmas and Boxing Day as well as the revelry of New Years Eve. We hope everyone thoroughly enjoyed the festive season and didn’t get too caught up in the traffic jams of the main street during such a busy time.
This month we would like to recognise some of our most valuable tenants. The backbone of most real estate businesses is in its permanent rent roll and thanks to our Permanent Rental Manager, Kim McIlroy – Cooloola Coast Realty - Rainbow Beach has a solid permanent rental portfolio.
Kim has assessed all of our tenants against a set of criteria including rental arrears, harmonious relationships with neighbours, maintenance of the property, etc and she has identified a number who have gone above and beyond their responsibilities in terms of their rental agreement.
A few of our tenants were recognised this month by their property owners for exceptional conduct of tenancy in the property they reside in. There was a tough decision to make as we have so many good tenants. After careful deliberation, we arranged for the top three to be awarded with gifts to show our appreciation as well as the appreciation of the property owners.
Just prior to Christmas, the following tenants were presented with gifts provided by the property owners in recognition of their excellent tenancy:
First prize went to Chrissy & Henry Fleming as well as Kaylah Fallo. Second prize was awarded to Byron Rush and third prize went to Kathy Beer and Michael Greenbury.
Congratulations to these tenants and thank you to all our landlords who entrust us with the management of their asset.
In other Rainbow Beach real estate news, enquiry levels for residential sales have increased over the past two months and the prospects for a return to more ‘normal’ sales volumes (based on the 20 year average for Rainbow Beach) are looking positive. Prices have steadied and are still down from the peak of late 2007/early 2008 however values have held throughout 2009.
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