“Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Ronald Reagan
As a general market update, since writing our last article, we have had five properties go ‘under contract’. We wouldn’t want to get too excited and necessarily announce that the property market has recovered but we would go so far as to say that we think we’ve seen the worst of it in terms of lack of buyer interest. The Mortgagee in Possession Auction on Saturday the 9th of June for 98 Cooloola Drive was attended by over 20 people (and Rainbow put on a horrible, freezing, rainy, windy day). There were 4 registered bidders and after a slow start and a Vendor bid, the property sold under the hammer for $700,000.
The house had previously sold for $1.15million in 2008 and again for $965,000 (at a Mortgagee in Possession Auction) in 2010. Interestingly, the State Government was quick to call us on the next business day to enquire as to whether or not the house had sold and for what price. Perhaps that puts a bit of a dent in their Valuer General’s calculations? 98 Cooloola Drive was given an ‘Unimproved Value’ of $850,000 as at 1 July 2011. Ie. With no house at all on the land, the Valuer General believed the property was worth $150,000 more than what it sold for after a 5 week Auction campaign including approximately $6,000 worth of marketing.
The purchase of 98 Cooloola Drive is a great testament to the town as the buyers actually already own property here. They obviously believe that Rainbow Beach has a solid future of growth; hence they have invested again in our beautiful town. The recent construction of significant infrastructure in Rainbow such as the state-of-the-art Aquatic Centre and Town Hall makes it easy to see that both local and state Government can see the town growing more. We are also confident and passionate about our town; so much so that we felt compelled to write a letter to the Community News editor about it.
One of our other most recent sales has also set a new bench mark in town for properties with views. 28 Manooka Drive has just sold for $450,000. The property features: three bedrooms, two bathrooms, two car accommodation, ocean views and a fully fenced, 660m2 block. The property is in need of some tender loving care/renovations as it is in it’s original 1980’s state; however, the new owners have been keeping an eye on the Rainbow Beach market for over three years and saw the potential of the property from the moment they saw it come onto the market. The property was listed for $480,000 on the 25th of May and went ‘under contract’ on the 4th of June. With a ‘time on market’ of just 10 days – we are confident that the list price was set correctly and the vendor now has a great result without having to wait months, if not years, to achieve a sale.
Essentially, this sale is proof that if you have a saleable property and it is listed at a reasonable price (based on a comparative market analysis of recent comparable sales) – properties are still selling even in a ‘tough market’.
Another recent sale which has surprised a few people is that of 35 Satinwood Drive in Rainbow Shores. The property features: three bedrooms, one bathroom, one car accommodation, in ground pool with bali hut, 688m2 block and all within five minutes’ walk to the beach. 35 Satinwood Drive sold for $390,000. The most recent sale of a vacant block of land in the same street was for $330,000 (14 Satinwood Drive, 799m2 block, sold in 2009).
We have another two ‘Mortgagee in Possession’ Auctions coming up on the 7th of July. National Australia Bank has appointed Cooloola Coast Realty as exclusive agents for both Unit 2/7 and Unit 10/5 Ocean View Parade. Both units would have sold for well in excess of $1 million in 2008; however, we have appraised them at $830,000 - $850,000 and $770,000 - $810,000 respectively. It remains to be seen what Reserves will be set on the day of the Auction; however, based on what we saw at 98 Cooloola Drive on Auction day – we would not be shocked if the Reserves were much different to our appraisal.
Our Auctioneer, Graham Engeman is going to have a very busy day on the 7th of July and he better warm up his vocal cords because he is running four Auctions in total on the day. After the Auctions on Unit 2/7 and Unit 10/5 Ocean View Parade; we are also Auctioning Unit 12 & 14/103 Cooloola Drive (Ocean Palms Resort). These Auctions are for two of the Developers’ original stock which he has held for over five years now. Both Units are part of the holiday letting pool and are very popular so they have excellent income figures, representing a solid investment. The original Developer of Ocean Palms Resort, (who also went onto to develop the iconic Rainbow Sea Resort) is looking to meet the market and will sell two units for well below replacement cost, including all furniture. The Auctions for these units will be held onsite and begin at 2.30pm on Saturday the 7th of July.
Finally, June saw the end of hearings for the Rainbow Shores Stage II case. Summations will be heard in mid-July and we are expecting a decision later this year. The court case has become the largest ever of its kind with over 30 sitting days and dozens of exhibits submitted as evidence. Ultimately, a decision will be made and given the length and extent of the court case itself; there should be no grounds for appeal from either side.
Thursday, June 21, 2012
Rainbow Realty Deal - June 2012
“Freedom of the press is guaranteed only to those who own one.”
A. J. Liebling
You may have seen the stories in the Gympie Times and Fraser Chronicle last month and had a quiet chuckle as we did, but the reports of increased backpacker numbers in Rainbow Beach have ruffled a few local feathers. The success of Rainbow Beach as the real backpackers' "gateway to Fraser Island" has thrown its Fraser Coast competition into chaos. News of the closure of Hervey Bay's “Next Backpackers” resort follows less than two months after the news that tour promoter “Nomads Fraser Island Tours” had quit the Fraser Coast.
As previously reported in our monthly article, “Nomads” announced that all its operations will now be coming out of Rainbow Beach. It seems to have been the last straw for “Next Backpackers”, once regarded as one of the Fraser Coast's biggest backpacking operators. Former “Next Backpackers” manager Mark Juppenlatz acknowledged the new tourism reality in March. "Just about every major player in the backpacking market is now operating in Rainbow Beach," he said. (Source: Gympie Times, 17th May 2012) Receivers and managers, BDO have confirmed that the 100-bed operation (“Next Backpackers” in Hervey Bay) had closed. BDO partner Helen Newman said her company had been monitoring the hostel since May last year and would now rid itself of the asset. Meanwhile, “Fraser Roving Backpackers” owner John Hayes said the industry was hemorrhaging in Hervey Bay and has called for "Tourism Fraser Coast, Tourism Queensland, the Fraser Coast Regional Council and the LNP government need to do something."
Just what Mr Hayes wants the government to do about the issue is unclear – force backpackers to choose Hervey Bay over Rainbow Beach? Ultimately, as eloquently put by a Tourism Fraser Coast board of directors member, David Hay, has said “"There are both organisations and individuals with vested interests in Rainbow Beach who have power in the booking distribution system and the ability to push business into Rainbow Beach as opposed to this end." (referring to Hervey Bay). (Source: Fraser Coast Chronicle, 15th May 2012) Generally speaking, Rainbow Beach businesses want the town to grow naturally into its new role as a regional tourism leader. The government cannot dictate routes of travel and itineraries to backpackers and cannot control the business decisions of individual businesses and groups. Queensland Premier, Campbell Newman has promised help for embattled sections of the tourist industry across Queensland (including Airlie Beach, Mission Beach and Port Douglas).
But as expressed by the Rainbow Beach Commerce and Tourism Association President, Scott Elms, there is a risk that any government assistance for Hervey Bay could disadvantage Rainbow Beach. "They would be robbing Peter to pay Paul," he has said. Scott Elms’ controversial comments have ignited a mini scandal amongst the regional Tourism Boards with healthy competition and camaraderie turning a little nasty when people’s livelihoods are potentially at stake. In saying that, many of Mr Elms’ comments have some validity, for example: “Hervey Bay has grown, not necessarily because it was superior, but because it had freehold land and the government had not stopped it. Hervey Bay was now losing the battle because tourists were choosing Rainbow Beach instead.” And it is a choice they are entitled to make.
"You can't force people to holiday at Hervey Bay. We (Rainbow Beach) have beaches, national park bushwalking and faster access to Fraser Island. We are a natural tourism leader and we are the real gateway to Fraser Island”. In addition, “Hervey Bay needs to accept that, apart from whale watching season, it is not a tourist destination, it's a retirement village," Mr Elms has said. (These comments are arguably somewhat offensive – kind of funny though – and in the context of the argument, proving to be pretty close to the mark ) Against the odds to a degree, Rainbow Beach is somehow surviving the same economic times which has set off a ripple effect of business collapses in Hervey Bay. Mr Elms has also said, "Things are tight in Rainbow, but so far we've avoided the significant contraction of business which has occurred in other tourism centres, including Cairns, Hervey Bay and Airlie Beach." (Source: Gympie Times, 18th May 2012)
Rainbow Beach has very much ‘come of age’ over the past 4-5 years with a massive increase in accommodation providers, most of which are more ‘high end’ versus ‘budget’. The investment in local infrastructure such as the Aquatic Centre and Town Hall has drawn positive comment from many visitors, particularly those who had not been to Rainbow for a number of years. Ultimately, we need to play to our strengths when it comes to attracting visitors/tourists and we have a lot of natural attractions to offer. Our appeal is certainly more so the natural attractions as opposed to the ‘high-rise-theme-park-shopping-mall’ thing – which we are unlikely to ever be able to compete on in comparison to the Gold Coast and more built up sections of the Sunshine Coast but that’s ok because a lot of families are looking to ‘get back to basics’ more and enjoy a more traditional family holiday (that doesn’t cost a fortune as well).
Finally, in completely property market related news, we have our Auction at 98 Cooloola Drive going ahead on Saturday the 9th of June at 1pm. Our previous local Councillor, Graham Engeman, will be the Auctioneer on the day and we are expecting some local and interstate interest as the bank is now is possession of the Mortgage on the property.
You may have seen the stories in the Gympie Times and Fraser Chronicle last month and had a quiet chuckle as we did, but the reports of increased backpacker numbers in Rainbow Beach have ruffled a few local feathers. The success of Rainbow Beach as the real backpackers' "gateway to Fraser Island" has thrown its Fraser Coast competition into chaos. News of the closure of Hervey Bay's “Next Backpackers” resort follows less than two months after the news that tour promoter “Nomads Fraser Island Tours” had quit the Fraser Coast.
As previously reported in our monthly article, “Nomads” announced that all its operations will now be coming out of Rainbow Beach. It seems to have been the last straw for “Next Backpackers”, once regarded as one of the Fraser Coast's biggest backpacking operators. Former “Next Backpackers” manager Mark Juppenlatz acknowledged the new tourism reality in March. "Just about every major player in the backpacking market is now operating in Rainbow Beach," he said. (Source: Gympie Times, 17th May 2012) Receivers and managers, BDO have confirmed that the 100-bed operation (“Next Backpackers” in Hervey Bay) had closed. BDO partner Helen Newman said her company had been monitoring the hostel since May last year and would now rid itself of the asset. Meanwhile, “Fraser Roving Backpackers” owner John Hayes said the industry was hemorrhaging in Hervey Bay and has called for "Tourism Fraser Coast, Tourism Queensland, the Fraser Coast Regional Council and the LNP government need to do something."
Just what Mr Hayes wants the government to do about the issue is unclear – force backpackers to choose Hervey Bay over Rainbow Beach? Ultimately, as eloquently put by a Tourism Fraser Coast board of directors member, David Hay, has said “"There are both organisations and individuals with vested interests in Rainbow Beach who have power in the booking distribution system and the ability to push business into Rainbow Beach as opposed to this end." (referring to Hervey Bay). (Source: Fraser Coast Chronicle, 15th May 2012) Generally speaking, Rainbow Beach businesses want the town to grow naturally into its new role as a regional tourism leader. The government cannot dictate routes of travel and itineraries to backpackers and cannot control the business decisions of individual businesses and groups. Queensland Premier, Campbell Newman has promised help for embattled sections of the tourist industry across Queensland (including Airlie Beach, Mission Beach and Port Douglas).
But as expressed by the Rainbow Beach Commerce and Tourism Association President, Scott Elms, there is a risk that any government assistance for Hervey Bay could disadvantage Rainbow Beach. "They would be robbing Peter to pay Paul," he has said. Scott Elms’ controversial comments have ignited a mini scandal amongst the regional Tourism Boards with healthy competition and camaraderie turning a little nasty when people’s livelihoods are potentially at stake. In saying that, many of Mr Elms’ comments have some validity, for example: “Hervey Bay has grown, not necessarily because it was superior, but because it had freehold land and the government had not stopped it. Hervey Bay was now losing the battle because tourists were choosing Rainbow Beach instead.” And it is a choice they are entitled to make.
"You can't force people to holiday at Hervey Bay. We (Rainbow Beach) have beaches, national park bushwalking and faster access to Fraser Island. We are a natural tourism leader and we are the real gateway to Fraser Island”. In addition, “Hervey Bay needs to accept that, apart from whale watching season, it is not a tourist destination, it's a retirement village," Mr Elms has said. (These comments are arguably somewhat offensive – kind of funny though – and in the context of the argument, proving to be pretty close to the mark ) Against the odds to a degree, Rainbow Beach is somehow surviving the same economic times which has set off a ripple effect of business collapses in Hervey Bay. Mr Elms has also said, "Things are tight in Rainbow, but so far we've avoided the significant contraction of business which has occurred in other tourism centres, including Cairns, Hervey Bay and Airlie Beach." (Source: Gympie Times, 18th May 2012)
Rainbow Beach has very much ‘come of age’ over the past 4-5 years with a massive increase in accommodation providers, most of which are more ‘high end’ versus ‘budget’. The investment in local infrastructure such as the Aquatic Centre and Town Hall has drawn positive comment from many visitors, particularly those who had not been to Rainbow for a number of years. Ultimately, we need to play to our strengths when it comes to attracting visitors/tourists and we have a lot of natural attractions to offer. Our appeal is certainly more so the natural attractions as opposed to the ‘high-rise-theme-park-shopping-mall’ thing – which we are unlikely to ever be able to compete on in comparison to the Gold Coast and more built up sections of the Sunshine Coast but that’s ok because a lot of families are looking to ‘get back to basics’ more and enjoy a more traditional family holiday (that doesn’t cost a fortune as well).
Finally, in completely property market related news, we have our Auction at 98 Cooloola Drive going ahead on Saturday the 9th of June at 1pm. Our previous local Councillor, Graham Engeman, will be the Auctioneer on the day and we are expecting some local and interstate interest as the bank is now is possession of the Mortgage on the property.
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