Rainbow Beach Real Estate News

"Genius is one per cent inspiration, ninety-nine per cent perspiration.”
Thomas A. Edison

Well, it is probably stating the obvious that the local property market is quiet at the moment, having seen an average 60% reduction in sales activity over the past 12 months (compared to the previous FY 09/10). There have been a number of local real estate agents close down over the past year and Rainbow Beach itself has gone from four real estate agencies in 2008 to only two today.

LJ Hooker at Cooloola Cove has shut their doors, as has Cooloola Realty at Tin Can Bay. Real estate agents in Gympie are reporting a significant drop in sales enquiry across all price ranges (including the lower range of properties under $350,000). Local retail stores are also doing it tough with shops such as ‘Inferno Pizza’, ‘Tin Can Bay Shoes’, ‘Cooloola Home Video’ closing their doors over the past couple of years.

Generally speaking, our take on the current economic climate is that people are simply holding onto their money and not making any major financial decisions in light of global economic uncertainty. This is despite the fact that as a nation, Australia boasts an extremely robust economy which flies in the face of the generally negative media commentary, consumer uncertainty and volatile share market conditions.

It appears that the negative issues are overwhelming the positive fundamental base of the national economy. We have to remind ourselves that we have a fundamentally strong economy based on solid employment figures and an abundance of natural resources. With our low unemployment, healthy gross domestic product (GDP) growth, relatively low inflation and historically low interest rates, we have a lot to be happy about in terms of our nation’s economic health.

Still, Australian consumers remain uncertain and they are choosing to increase their savings rather than spend up on luxury items including everything from a new TV or fridge up to a new car, boat or house. At a time of global volatility, people are worried that things will get worse before they get better so they are holding onto every spare dollar “just in case”.

Over the last two years, we’ve watched events pan out on the other side of the world that reinforce the importance of managing our own personal debt carefully. Unrest in Greece, tough economic measures in Ireland, and now a so-called austerity budget in Italy are all legacies of the irresponsible use of debt. These issues may involve governments rather than households but the key message remains the same – don’t take on more debt than you can comfortably manage.

It can be hard to comprehend how an entire nation ends up going broke. Yet, that is what some of Europe’s smaller nations have done and they have had to source additional credit to get them through. Thankfully, here in Australia our national debt is at quite manageable levels. Nonetheless the latest Consumer Credit Expectations Survey by credit agency Dun & Bradstreet shows that many households may be facing a debt crisis of their own. (Source: Paul Clitheroe, July 2011)

According to the survey, almost one third of Australians (30%) will struggle to meet their debt repayments over the next three months.
Worryingly, 37% of respondents say they’ll use their credit card to buy something they couldn’t otherwise afford. And 21% expect their household debt will increase over the coming quarter.

The news isn’t all bad though. On the plus side, we’re putting the brakes on new debt. Only 19 per cent of Australians intend to apply for a new home loan, personal loan or credit card over the next three months, down from 33 per cent in June 2009. Among those of us who hold a credit card, only 8 per cent intend to apply for a credit limit increase over the coming quarter.

Mortgage sales fell 3.7 per cent in July, on the back of fears of an interest rate rise and the new carbon tax (which looks certain to become law within the next few months). The Australian Finance Group (AFG) Mortgage Index showed the greatest fall was in Victoria (7.4 per cent), with losses also recorded in NSW (5.9 per cent), Western Australia (5.0 per cent) and Queensland (0.5 per cent).

AFG general manager of sales and operations Mark Hewitt says home borrowers have gone into their shells since the most recent cash rate rise in November 2010. He says the figures show Australians are still worried about their financial future. "Domestic financial news is dominated by talk of rate rises and the carbon tax," Mr Hewitt said in a statement accompanying the index's release on Thursday. "Gloomy international financial news has seen stock markets slump. We're all looking for strong economic leadership to provide the market with some much needed confidence."

The data shows refinancing remains the most active part of the mortgage market, making up 39.1 per cent of loans in July. The proportion of owner-occupiers arranging mortgages to move or upgrade their homes was 11.7 per cent of all mortgages in the month.

We have certainly seen an increase in local property owners looking to sell their home or unit in Rainbow Beach with a view to moving closer to either: Brisbane, the Sunshine Coast, or even Gympie. Many older residents are looking to move closer to medical facilities whilst younger families with teenagers often move out of town to be closer to the children’s high school.

With Year 7 moving to high school in 2013, our local Rainbow Beach State School will only cater for Prep-Year 6 students – which may also have an impact on the longevity of younger families within the town.

The construction of the new Town Hall and Aquatic Centre in Rainbow certainly adds to the level of infrastructure we have access to in our local community however it would be fantastic to see more job opportunities within Rainbow Beach in order for the population to grow and reach the ‘critical mass’ so needed for the town to be sustainable over the long term.

Our natural attractions are what bring visitors to the area and our tourism industry is very much based on our beautiful surroundings (Carlo Sandblow, Carlo Point, Searys Creek, Fraser Island, Sandy Straits, Double Island Point, etc). Ultimately though, there is a need for a static population to sustain businesses such as the grocery stores, cafes/restaurants, real estate, clothing shops, bakeries etc. The town needs growth in order to survive as small businesses cannot continue to struggle from peak period to peak period indefinitely.