Sea or Tree Change Properties

“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!