Rainbow Realty Deal - July 2012

“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.