"The Supreme Court has ruled that they cannot have a nativity scene in Washington, D.C. This wasn't for any religious reasons. They couldn't find three wise men and a virgin."
Jay Leno.
The team at Cooloola Coast Realty takes great pleasure in welcoming Rieke Doell to the newly established full time position of Holiday Letting Manager. Rieke has been living in Rainbow Beach for the past three years and has a wealth of experience from previously working in Event Management and the Tourism Industry – both in Australia and in Europe.
We wish Kerry Leyland all the best and thank her for her tireless efforts over the past 2+ years in the role of Holiday Letting Manager. We are sure that she will enjoy spending more time with her young son, Kye (who will be off to School before we know it) and her husband, Grant.
Not many more sleeps now until the much anticipated wait is over for Santa to deliver his cheer! Christmas came early for us at Cooloola Coast Realty having enjoyed a fantastic Staff Christmas Party at Arco on the 25th of November. ‘Secret Santa’ gave out some wonderful presents and everyone had a great evening.
Whilst 2011 has proved to be another very challenging year in real estate, Cooloola Coast Realty is in an enviable position to ride out the lows as we have a sizable rent roll including permanent rentals, holiday properties as well as secure storage and parking. With three full-time staff and two owner-operators, we are well positioned to provide unrivalled, professional and experienced property management and real estate sales services to Rainbow Beach.
Over the past three years, Rainbow Beach has gone from having four separate real estate offices to just two. Given that we are a town of only 1,200 permanent residents; two real estate offices is realistically all that is sustainable over the long term.
The volume of residential sales in Rainbow Beach over the past three years has been well below average and coupled with a reduction in property values; this has meant that sales commissions have been down approximately 65% over the past two-three years (compared to the 20 year average).
Essentially, the current state of the economy is putting immense pressure on small (and large business), particularly those that have no association or derive no benefit from the mining boom. We just spent a couple of days in Brisbane and were quite surprised to find that the real estate market there is quite depressed also. Real estate colleagues of ours are reporting significant reductions in sales volumes and there has been a notable increase in Receiver Sales and Mortgagee in Possession sales as well.
Fingers crossed that we get further reductions in interest rates over the next few months and that should relieve some pressure on families and businesses alike.
Now, before you head off out of town for your Christmas break (not that you would want to be anywhere else other than Rainbow! J), just remember – we have a very safe, quiet and low crime rate town BUT you are better to be safe than sorry. So, although Christmas is a time to rejoice, let your hair down and enjoy the company of family and friends; if you are planning to be away from your home over this period we would like to remind you of some holiday security tips:
Ÿ Keep Christmas trees and presents hidden from outside view
Ÿ Remove all ladders and climbing objects from around the house
Ÿ Notify neighbours that you are going away and have them keep an eye on your place whilst you are not there
Ÿ Leave a light on inside (connecting it to a timer is even better)
Ÿ Hide all money, jewellery and valuables
Ÿ Don’t hide a key outside your property or leave notes!
To all past, present and future clients, we would like to take the time to wish everyone a very Merry Christmas and hope that all of you and your loved ones remain safe throughout the Christmas period.
One of the real joys of the festive season is the opportunity to say thank you and wish you the very best for the New Year.
Thursday, December 1, 2011
Rainbow Beach Real Estate News November 2011
"It's just as unpleasant to get more than you bargain for as to get less”
George Bernard Shaw
We weren’t sure whether we should give this article the title “A Dose of Reality” or “The Cracks Are Beginning To Show”…. In the end we decided just to provide some commentary on the current state of the local property market. There has been a significant reduction in sales volumes over the past three years and residential property sales have been extremely difficult to achieve since the slow since the GFC hit in the latter half of 2008.
However, in the past few months there have been a number of sales locally including: Unit 14 at Rainbow Shores Resort, which has been on the market for well over a year and reduced in price several times, has just settled at $155,000. (Settlement date was 3/10/11). Unit 14 is an older style unit (within Baden North) and features high ceilings with exposed beams and included the standard furniture package.
24 Naiad Court, a vacant block of land (1,003m2) within Rainbow Shores Estate is currently Under Contract at $495,000. A comparable block of land on Ibis Court sold for $720,000 at the end of 2008. This is a price difference of -31%.
Unit 49 Rainbow Shores Resort is currently listed at $215,000 including all furniture and chattels. We can report that this unit is now Under Contract at an agreed price of $202,000. In addition, Unit 7 Rainbow Shores Resort has a current list price of $220,000 including all furniture and chattels. These particular units would’ve been appraised at (and similar units sold for) in excess of $250,000 - $290,000 back in 2008.
Comparatively, the Getaway Resort currently has a three bedroom, two bathroom unit with single lock up garage on the market for $220,000. Similar units within the same complex have sold for up to $299,000 even in the past two years.
With regard to units within Resort complexes, most are presented with similar furniture/fittings and have similar (if not identical) floor plans and layouts (within the same complex). The units also have similar overhead/holding costs (ie. Body Corporate Fees and Council Rates) and if holiday let or permanently rented, would be yielding similar rental returns.
Even at the drastically reduced prices to which some properties have fallen, in the current market and tenuous economic climate, potential buyers are few and sales are difficult to achieve. Based on the current information, we have been recommending Vendors either consider reducing the list price of their property or remove the property from sale until the market shows sign of improvement and it becomes viable to achieve their current listed price. ‘
When properties such as 20 Belle Court in Rainbow Shores, (3 storey home with 3 bedrooms, 3 bathrooms, 4 car accommodation) boasting a pool, ocean glimpses, 120 metres walk to the beach on a huge 1,136m2 block) are reduced to $750,000 – that is a pretty clear indication that the market has taken a significant step backwards in terms of value. The same property would’ve easily been appraised in excess of $1million back in late 2008 and even at $750,000 – it may not find a buyer.
Property transactions may well be few and far between in the current climate however, there has been more than required to indicate a trend (as opposed to a succession of ‘anomalies’). Current vendor discounting is at unprecedented levels and even with significantly reduced list prices, some properties simply refuse to be sold.
On a national and international level, new data shows that inflation, rising labor costs and government debt are adding to the slowdown of economic growth (particularly in China which Australia is heavily dependent upon in terms of exports). Several economists in China have recently lowered their growth forecasts for this year and next year to about 8.5 percent, down from earlier forecasts of 9 to 10 percent, while also warning about the possibility of a sharp rise in nonperforming loans at the nation’s big state-owned banks.
Data recently released by the Chinese central bank showed that credit in China had expanded at “alarming levels,” far more than previous government estimates suggested. Credit Suisse downgraded its profit forecasts for Chinese companies and state-owned banks, as it warned of slowing growth for the overall economy. The reports come at a time of heightened concern about slower growth in other parts of the world, including the United States, Europe and Japan.
Back in July, we reported that there were approximately 150 residential properties for sale in Rainbow Beach (this includes houses, units and land). Currently, there are just over 170 residential properties for sale in Rainbow Beach. Based on the average time on the market in Rainbow Beach being well over 12 months now and the number of sales recorded annually over the past three years, it will take more than 15 years for the amount of stock on the market to return to ‘normal’ levels (ie. pre GFC).
The current economic climate has seen a huge increase in the amount of stock on the property market and buyers simply have way too much choice for sellers to avoid having to reduce their asking price in most circumstances. Even when a property presents a unique opportunity/proposition, for example, ocean views or close proximity to the beach; buyers are not necessarily enticed to pay a premium (or what would be considered a premium in today’s market) as there is almost invariably a vendor more motivated to sell at a discounted price in order to secure a sale. Ie. Unless a buyer is completely motivated by emotion in their purchase, they will tend to opt for the ‘cheaper option’ and perhaps compromise on their ‘wants and needs’ in a house when making a decision to purchase a property.
George Bernard Shaw
We weren’t sure whether we should give this article the title “A Dose of Reality” or “The Cracks Are Beginning To Show”…. In the end we decided just to provide some commentary on the current state of the local property market. There has been a significant reduction in sales volumes over the past three years and residential property sales have been extremely difficult to achieve since the slow since the GFC hit in the latter half of 2008.
However, in the past few months there have been a number of sales locally including: Unit 14 at Rainbow Shores Resort, which has been on the market for well over a year and reduced in price several times, has just settled at $155,000. (Settlement date was 3/10/11). Unit 14 is an older style unit (within Baden North) and features high ceilings with exposed beams and included the standard furniture package.
24 Naiad Court, a vacant block of land (1,003m2) within Rainbow Shores Estate is currently Under Contract at $495,000. A comparable block of land on Ibis Court sold for $720,000 at the end of 2008. This is a price difference of -31%.
Unit 49 Rainbow Shores Resort is currently listed at $215,000 including all furniture and chattels. We can report that this unit is now Under Contract at an agreed price of $202,000. In addition, Unit 7 Rainbow Shores Resort has a current list price of $220,000 including all furniture and chattels. These particular units would’ve been appraised at (and similar units sold for) in excess of $250,000 - $290,000 back in 2008.
Comparatively, the Getaway Resort currently has a three bedroom, two bathroom unit with single lock up garage on the market for $220,000. Similar units within the same complex have sold for up to $299,000 even in the past two years.
With regard to units within Resort complexes, most are presented with similar furniture/fittings and have similar (if not identical) floor plans and layouts (within the same complex). The units also have similar overhead/holding costs (ie. Body Corporate Fees and Council Rates) and if holiday let or permanently rented, would be yielding similar rental returns.
Even at the drastically reduced prices to which some properties have fallen, in the current market and tenuous economic climate, potential buyers are few and sales are difficult to achieve. Based on the current information, we have been recommending Vendors either consider reducing the list price of their property or remove the property from sale until the market shows sign of improvement and it becomes viable to achieve their current listed price. ‘
When properties such as 20 Belle Court in Rainbow Shores, (3 storey home with 3 bedrooms, 3 bathrooms, 4 car accommodation) boasting a pool, ocean glimpses, 120 metres walk to the beach on a huge 1,136m2 block) are reduced to $750,000 – that is a pretty clear indication that the market has taken a significant step backwards in terms of value. The same property would’ve easily been appraised in excess of $1million back in late 2008 and even at $750,000 – it may not find a buyer.
Property transactions may well be few and far between in the current climate however, there has been more than required to indicate a trend (as opposed to a succession of ‘anomalies’). Current vendor discounting is at unprecedented levels and even with significantly reduced list prices, some properties simply refuse to be sold.
On a national and international level, new data shows that inflation, rising labor costs and government debt are adding to the slowdown of economic growth (particularly in China which Australia is heavily dependent upon in terms of exports). Several economists in China have recently lowered their growth forecasts for this year and next year to about 8.5 percent, down from earlier forecasts of 9 to 10 percent, while also warning about the possibility of a sharp rise in nonperforming loans at the nation’s big state-owned banks.
Data recently released by the Chinese central bank showed that credit in China had expanded at “alarming levels,” far more than previous government estimates suggested. Credit Suisse downgraded its profit forecasts for Chinese companies and state-owned banks, as it warned of slowing growth for the overall economy. The reports come at a time of heightened concern about slower growth in other parts of the world, including the United States, Europe and Japan.
Back in July, we reported that there were approximately 150 residential properties for sale in Rainbow Beach (this includes houses, units and land). Currently, there are just over 170 residential properties for sale in Rainbow Beach. Based on the average time on the market in Rainbow Beach being well over 12 months now and the number of sales recorded annually over the past three years, it will take more than 15 years for the amount of stock on the market to return to ‘normal’ levels (ie. pre GFC).
The current economic climate has seen a huge increase in the amount of stock on the property market and buyers simply have way too much choice for sellers to avoid having to reduce their asking price in most circumstances. Even when a property presents a unique opportunity/proposition, for example, ocean views or close proximity to the beach; buyers are not necessarily enticed to pay a premium (or what would be considered a premium in today’s market) as there is almost invariably a vendor more motivated to sell at a discounted price in order to secure a sale. Ie. Unless a buyer is completely motivated by emotion in their purchase, they will tend to opt for the ‘cheaper option’ and perhaps compromise on their ‘wants and needs’ in a house when making a decision to purchase a property.
Rainbow Beach Real Estate News October 2011
"I once wanted to become an atheist, but I gave up - they have no holidays”
Henny Youngman
There has been a minor increase in buyer enquiry over the past 2 – 3 weeks, which has coincided with the warmer weather. However, generally speaking, prospective buyers remain somewhat cautious and have are still adopting the “we’ll just wait and see what happens” approach which is somewhat frustrating.
The media is doing its best to scare the pants off people and if you didn’t believe that the “sky was falling” just spend about 30 minutes watching something like ABC News 24 on any given night and you’ll find yourself worrying about all sorts of possible financial disasters. Both the US and the UK have run out of ideas on how to stimulate their economies and with ridiculously low interest rates, there is very little room for movement in terms of trying to instill confidence in consumers and business.
Our feeling is that although the Australian property market is currently experiencing slow sales and vendors are having to discount their price in order to meet the market – we cannot foresee a full scale price crash. Whilst in overseas property markets (eg across Europe and parts of the US) there have been sharp price falls (over 20%) since the GFC, national property prices in Australia have remained relatively steady.
Being out of step with other housing markets across the world is causing some prospective buyers to be quite nervous. The pessimists among us believe it is only a matter of time before house values plummet here in Australia. But there are a myriad of reasons why they won’t fall significantly any time soon:
Population growth - Whilst it has slowed in recent years, we maintain strong population growth. Our domestic population is aging, but our migrant intake is largely in the 20s to late-30s cohort, which means increasing household formation and greater demand for dwellings down the line. (Source: Micheal Matusik, July 2011)
Prudent lending practices - Our interest rates have room to move downwards and as previously mentioned in this article, many countries do not have this buffer. We also have full recourse loans in Australia, allowing lenders the right to take any assets of the borrowers if repayment is not made. Many overseas markets which experienced a housing crash have non-recourse loans, which essentially allow borrowers to walk away from debt if things get too tough. Quite literally in the US during the latter part of 2008 and early 2009, there was a well-known practice of sending “jingle mail” – which was when the mortgagor would post their house keys to their mortgagee and simply leave their house empty. The bank would then have an asset on their hands which had lost close to half of its value; no one wanted to buy and the person/s who had taken out the loan to buy the property in the first place simply moved out and got on with their lives.
Relatively high equity - Current loan-to-value ratios in Australia are around 53%, reflecting our conservative position towards debt. The long-term average is around 65%. According to the latest official statistics, Australia’s housing debt to housing assets is 29%, and our debt to overall assets is just 19%. So in other words, we, as a nation, own around 70% of our homes – a far cry from the “jingle” loans that typified the US housing market collapse. (Often, mortgages on houses in the US were up to 90% or even 100% of the value of the property).
In addition, household balance sheets are being strengthened by additional savings. We are currently saving 10% of our disposable income, which amounted to a staggering $74 billion last year alone. This improved state of our personal finances further reduces the risk of house prices collapsing as there will be less “fire sales” occurring.
Under supply – Not necessarily for every dwelling type and in every geographic area – but certainly at the bottom third of the market. This helps place a buffer under property values. Due to a range of reasons, mostly political, (ie. cost of new development etc) there is an under supply of basic, affordable housing across our capital cities and now in our major regional centres too.
Economy growth - Whilst many of us would like to earn more money, and some feel poorer today than a few years back, nearly all of us can find work. Housing markets usually crash in conjunction with significant falls in employment levels.
Low unemployment - As long as our unemployment rate stays below 8%, then wholesale falls in property values are very unlikely. It is currently 5.3%. (Source: Australian Bureau of Statistics Aug 11)
Few mortgage defaults - Whilst recent headlines in the media screamed, “Rising mortgage arrears”, the latest figures show just 1.37% of home loans across Australia are 30-days in arrears and 0.54% are three months behind in mortgage payments. The trend is upward, from 1.30% and 0.48% respectively on the previous quarter, but the number of home loans technically in default across Australia is very low.
It certainly pays to take a long-term view. Residential property values – when looking at resale performance rather than simplistic medians – have risen across Queensland by just over 10% each year over the last decade. Over the last five years this has dropped to about a 6% annual gain and during the last 12 months, values have declined slightly by about 1%.
There is little doubt that values are now falling. How far they will continue to fall is unknown but we don’t think it will be anywhere near as far as most property pessimists believe.
Henny Youngman
There has been a minor increase in buyer enquiry over the past 2 – 3 weeks, which has coincided with the warmer weather. However, generally speaking, prospective buyers remain somewhat cautious and have are still adopting the “we’ll just wait and see what happens” approach which is somewhat frustrating.
The media is doing its best to scare the pants off people and if you didn’t believe that the “sky was falling” just spend about 30 minutes watching something like ABC News 24 on any given night and you’ll find yourself worrying about all sorts of possible financial disasters. Both the US and the UK have run out of ideas on how to stimulate their economies and with ridiculously low interest rates, there is very little room for movement in terms of trying to instill confidence in consumers and business.
Our feeling is that although the Australian property market is currently experiencing slow sales and vendors are having to discount their price in order to meet the market – we cannot foresee a full scale price crash. Whilst in overseas property markets (eg across Europe and parts of the US) there have been sharp price falls (over 20%) since the GFC, national property prices in Australia have remained relatively steady.
Being out of step with other housing markets across the world is causing some prospective buyers to be quite nervous. The pessimists among us believe it is only a matter of time before house values plummet here in Australia. But there are a myriad of reasons why they won’t fall significantly any time soon:
Population growth - Whilst it has slowed in recent years, we maintain strong population growth. Our domestic population is aging, but our migrant intake is largely in the 20s to late-30s cohort, which means increasing household formation and greater demand for dwellings down the line. (Source: Micheal Matusik, July 2011)
Prudent lending practices - Our interest rates have room to move downwards and as previously mentioned in this article, many countries do not have this buffer. We also have full recourse loans in Australia, allowing lenders the right to take any assets of the borrowers if repayment is not made. Many overseas markets which experienced a housing crash have non-recourse loans, which essentially allow borrowers to walk away from debt if things get too tough. Quite literally in the US during the latter part of 2008 and early 2009, there was a well-known practice of sending “jingle mail” – which was when the mortgagor would post their house keys to their mortgagee and simply leave their house empty. The bank would then have an asset on their hands which had lost close to half of its value; no one wanted to buy and the person/s who had taken out the loan to buy the property in the first place simply moved out and got on with their lives.
Relatively high equity - Current loan-to-value ratios in Australia are around 53%, reflecting our conservative position towards debt. The long-term average is around 65%. According to the latest official statistics, Australia’s housing debt to housing assets is 29%, and our debt to overall assets is just 19%. So in other words, we, as a nation, own around 70% of our homes – a far cry from the “jingle” loans that typified the US housing market collapse. (Often, mortgages on houses in the US were up to 90% or even 100% of the value of the property).
In addition, household balance sheets are being strengthened by additional savings. We are currently saving 10% of our disposable income, which amounted to a staggering $74 billion last year alone. This improved state of our personal finances further reduces the risk of house prices collapsing as there will be less “fire sales” occurring.
Under supply – Not necessarily for every dwelling type and in every geographic area – but certainly at the bottom third of the market. This helps place a buffer under property values. Due to a range of reasons, mostly political, (ie. cost of new development etc) there is an under supply of basic, affordable housing across our capital cities and now in our major regional centres too.
Economy growth - Whilst many of us would like to earn more money, and some feel poorer today than a few years back, nearly all of us can find work. Housing markets usually crash in conjunction with significant falls in employment levels.
Low unemployment - As long as our unemployment rate stays below 8%, then wholesale falls in property values are very unlikely. It is currently 5.3%. (Source: Australian Bureau of Statistics Aug 11)
Few mortgage defaults - Whilst recent headlines in the media screamed, “Rising mortgage arrears”, the latest figures show just 1.37% of home loans across Australia are 30-days in arrears and 0.54% are three months behind in mortgage payments. The trend is upward, from 1.30% and 0.48% respectively on the previous quarter, but the number of home loans technically in default across Australia is very low.
It certainly pays to take a long-term view. Residential property values – when looking at resale performance rather than simplistic medians – have risen across Queensland by just over 10% each year over the last decade. Over the last five years this has dropped to about a 6% annual gain and during the last 12 months, values have declined slightly by about 1%.
There is little doubt that values are now falling. How far they will continue to fall is unknown but we don’t think it will be anywhere near as far as most property pessimists believe.
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