“Content makes poor men rich; discontent makes rich men poor.”
Benjamin Franklin
Well you could hardly say that the local property market is ‘dead’ at the moment with over 15 sales recorded in Rainbow Beach over the past three months. Yes – we would still describe it as a “buyer’s market” and supply is still above that of demand however; prices do not appear to be getting any lower now so those that have been watching the market for a while are definitely starting to make their move.
By the time this edition of the Community News comes out, the Auction at the Rainbow Beach Hotel will have happened and there may well be a new owner of the Pub. It is such a great building and it would be great to see it stay in local hands. Since the Pub was completed alongside the Plantation Resort apartments in late 2008; there has been a lot of local talk and conjecture about the style, design and layout of the complex. But, at the end of the day – it cannot be disputed that the development is iconic and beautiful. The Hotel itself has been built to the highest standards with no expense spared on features such as marble bars, pressed tin ceilings and double hung windows. We are very lucky to have such a great development in our small town and if it hadn’t of happened when it did; we probably would’ve waited another 20 years for such a thing.
No one could’ve predicted the fallout from the GFC would be so severe and last as long as it has.
However; in spite of the GFC; overall our national economy is actually in pretty good shape – especially when compared to some economies overseas. For example – the US city that was once the symbol of America's industrial boom, Detroit, has filed for bankruptcy with debts worth $15 billion (Yep….. $15 BILLION), after a long, slow decline in population and in the auto manufacturing industry. The decision to file for bankruptcy could result in civil servants being made unemployed, selling off assets, raising fees and scaling back basic council services such as rubbish collection and snow ploughing.
Public services had already been drastically slashed, leaving health and education departments in turmoil and over 70,000 properties have been abandoned as the population decreased. An estimated 40% of street lights do not work and only a third of ambulances in the city are in service, leading to massive delays in answering emergency calls. (Source: news.com.au)
The move had been feared for months, and marks a turning point for city and state leaders, who must now confront the challenge of rebuilding Detroit's broken budget in as little as a year. The decline of the motor manufacturing industry has largely been blamed for the financial problems in Detroit as that is what has sparked what has essentially been a ‘mass exodus’ of citizens and affiliated businesses from the city.
Property prices in Detroit have obviously plummeted and there is not much hope of this changing in the near future.
In contrast, at the end of the last Financial Year, the Australian economy achieved a remarkable milestone - closing off the books on 22 years of consecutive economic growth. That is a remarkable achievement. Despite enormous challenges, the Australian economy has largely ‘weathered the storm’.
It it is important to recognise the period of intense economic change we have all lived through since the GFC hit is 2008. For example, on the eve of the GFC, the Australian economy was growing between 4 – 5% per cent a year. Economic growth today is running at 2.5% - far from recession territory - but below its long term average of about 3.25%. (Source: news.com.au)
The high Aussie dollar over the past 4-5 years has sounded the death knell for many large manufacturers. Ford Australia is closing its doors and Holden is warning of more to come. In addition, the mining boom appears to be winding down. But there are silver linings to a lot of these economic storm clouds. For example, it might be a good thing if China's maturing economic growth could be made more sustainable by authorities there curbing a recent credit boom.
As the rest of the world recovers, other currencies are becoming more attractive to investors, meaning the Australian dollar has gone back down to a more sustainable level of around US92 cents. Again, this is a good thing. The falling Aussie dollar will relieve pressure on our struggling industries such as manufacturing, education services and tourism, all of which are significant employers.
Meanwhile, Australian households are sitting on a war chest of savings, having spent the last five years using lower interest rates to pay off their mortgage faster. All these things are positive and point to an optimistic outlook for Aussies. Despite the doomsayers – the sky didn’t actually fall in because of the GFC and the best thing we can do for our country right now is to inject some consumer confidence and go out and buy stuff. Buy a new car, go on a Aussie holiday or – best idea of all – buy a beach house!
Sunday, July 28, 2013
Rainbow Realty Deal July 2013
“You are not entitled to your opinion. You are entitled to your informed opinion. No one is entitled to be ignorant.”
Harlan Ellison
Well the big news this month was the decision by Judge Michael Rackeman of the Planning and Environment Court to disallow the appeal for the development of Rainbow Shores Stage 2. (RS2)
Upholding the original Department of Environment and Resource Management (DERM) opposition to RS2, the decision means that the 200 hectare site north of the current Rainbow Shores development which developers, Rainbow Shores Pty Ltd, have held a development lease on since 1984 will now remain "as is". The development would have added a peak resident and tourist population of up to 6550 people to the 4000 peak for the entire district, including Inskip Point. It was to have included units, houses and retail and commercial establishments.
Regardless of your position on the issue, the fact is that this decision will have a huge impact on the future and potential growth of our town. The judgement which was handed down and spelt out in 140 pages essentially rejected the development on environmental grounds which could apply anywhere in our surrounding bush land, effectively preventing any new land releases around the town (including the extension of Cypress Avenue and any additional land release beyond Bombala Crescent).
The development leases were offered by the Bjelke-Petersen government in 1984, in exchange for sandmining leases rendered worthless when the Commonwealth banned the export of sand from Fraser Island.
You could argue that a lack of growth and development is a good thing. Some people believe that if no additional land is released for development, the value of existing real estate will increase because what we have is then considered more unique and certainly more exclusive. Unfortunately, a lack of development can be a double edged sword with many investors and owner occupiers reluctant to buy into an area with limited potential for growth.
Clearly, we are pro sustainable development (you are unlikely to meet a real estate agent who isn't). But, we also recognise that this is a huge, contentious and complex issue with both proponents and opponents with very valid arguments. We have penned a letter to our local member, David Gibson, and given our thoughts on the issue and we encourage anyone who feels strongly (one way or another) to do the same. Our opinion/s might not change anything but we, as a community should have a say in the future of our town.
Here is an extract of our letter to Mr Gibson:
"In light of this recent decision regarding Rainbow Shores Stage 2 we have concerns regarding the future of our town. We are business owners who employ three full time staff, we also own a home in Rainbow Beach and have two children attending the local school. Our concerns are centered around the fact that it appears as if there will be very limited opportunity for growth in our town and therefore our business. Despite there being a willing party, ie. a developer who is committed to investing in infrastructure and community facilities, providing jobs and more opportunities for the local community - there is no way forward without development approval.
As you are aware, Rainbow Beach is dependant upon tourism and many businesses in town rely upon the permanent population to 'survive' throughout the year outside of holidays. Every business in town would benefit from future, sustainable development and if we were to reach and maintain a 'critical mass' of permanent residents, this would provide the impetus for more services and amenities.
In our business, we see firsthand every day the disadvantages of being such a small town. Many young families leave town when their children reach high school and many young people have limited or no opportunities for work in town so they have to move. We have over a dozen properties listed for sale because the owners are no longer able to stay in town due to a lack of medical facilities and support. In addition, there are dozens more properties for sale as investors no longer believe the town has any future growth or potential.
With the recent legal judgement against Rainbow Shores Stage 2 we would like to see the current, 'pro-economic development and tourism', government revisit the master plan in order to see a way forward in respect to growth and development for Rainbow Beach. The alternative is that we see very limited growth opportunities and this is likely to result in a loss of confidence and hope within the local business community."
Harlan Ellison
Well the big news this month was the decision by Judge Michael Rackeman of the Planning and Environment Court to disallow the appeal for the development of Rainbow Shores Stage 2. (RS2)
Upholding the original Department of Environment and Resource Management (DERM) opposition to RS2, the decision means that the 200 hectare site north of the current Rainbow Shores development which developers, Rainbow Shores Pty Ltd, have held a development lease on since 1984 will now remain "as is". The development would have added a peak resident and tourist population of up to 6550 people to the 4000 peak for the entire district, including Inskip Point. It was to have included units, houses and retail and commercial establishments.
Regardless of your position on the issue, the fact is that this decision will have a huge impact on the future and potential growth of our town. The judgement which was handed down and spelt out in 140 pages essentially rejected the development on environmental grounds which could apply anywhere in our surrounding bush land, effectively preventing any new land releases around the town (including the extension of Cypress Avenue and any additional land release beyond Bombala Crescent).
The development leases were offered by the Bjelke-Petersen government in 1984, in exchange for sandmining leases rendered worthless when the Commonwealth banned the export of sand from Fraser Island.
You could argue that a lack of growth and development is a good thing. Some people believe that if no additional land is released for development, the value of existing real estate will increase because what we have is then considered more unique and certainly more exclusive. Unfortunately, a lack of development can be a double edged sword with many investors and owner occupiers reluctant to buy into an area with limited potential for growth.
Clearly, we are pro sustainable development (you are unlikely to meet a real estate agent who isn't). But, we also recognise that this is a huge, contentious and complex issue with both proponents and opponents with very valid arguments. We have penned a letter to our local member, David Gibson, and given our thoughts on the issue and we encourage anyone who feels strongly (one way or another) to do the same. Our opinion/s might not change anything but we, as a community should have a say in the future of our town.
Here is an extract of our letter to Mr Gibson:
"In light of this recent decision regarding Rainbow Shores Stage 2 we have concerns regarding the future of our town. We are business owners who employ three full time staff, we also own a home in Rainbow Beach and have two children attending the local school. Our concerns are centered around the fact that it appears as if there will be very limited opportunity for growth in our town and therefore our business. Despite there being a willing party, ie. a developer who is committed to investing in infrastructure and community facilities, providing jobs and more opportunities for the local community - there is no way forward without development approval.
As you are aware, Rainbow Beach is dependant upon tourism and many businesses in town rely upon the permanent population to 'survive' throughout the year outside of holidays. Every business in town would benefit from future, sustainable development and if we were to reach and maintain a 'critical mass' of permanent residents, this would provide the impetus for more services and amenities.
In our business, we see firsthand every day the disadvantages of being such a small town. Many young families leave town when their children reach high school and many young people have limited or no opportunities for work in town so they have to move. We have over a dozen properties listed for sale because the owners are no longer able to stay in town due to a lack of medical facilities and support. In addition, there are dozens more properties for sale as investors no longer believe the town has any future growth or potential.
With the recent legal judgement against Rainbow Shores Stage 2 we would like to see the current, 'pro-economic development and tourism', government revisit the master plan in order to see a way forward in respect to growth and development for Rainbow Beach. The alternative is that we see very limited growth opportunities and this is likely to result in a loss of confidence and hope within the local business community."
Rainbow Realty Deal June 2013
“Travel, in the younger sort, is a part of education; in the elder, a part of experience.”
Francis Bacon
The stunning coastline that we live beside is very popular with people of all ages and many people want to own a piece of it by purchasing their own holiday home or beach side residence. There are plenty of cashed up bargain hunters around at the moment and although we are competing with the likes of Noosa, Peregian Beach, Coolum, Bargara Airlie Beach, etc – many buyers are seeking out the beauty and unique location of Rainbow Beach as their preferred holiday or retirement location. The fact that we are on the doorstep of Fraser Island is a great advantage as well.
Prices up and down Australia’s eastern seaboard have declined over the past 4-5 years and many buyers are taking advantage of this price correction and getting in now before the property market inevitably rises again. Real Estate Agents up and down the coast are reporting more sales to holiday home buyers, as many take note of the price drops by vendors.
The Fairfax-owned Australian Property Monitors has released a list of coastal hot spots that are now more affordable than a decade ago. In many, prices have continued to fall since the global financial crisis. And lower prices mean higher rental yields, especially over peak periods such as Christmas and Easter. We have a number of holiday homes that gross in excess of $40,000 per annum; some of which can be purchased for between $400,000 - $700,000. Gross rental yields of 6-7% are not uncommon; making the return on investment for buyers pretty attractive. One of the most popular holiday homes we manage rents out for just under $5,000 per week over the peak period; providing the owners with an impressive passive income on their investment.
Holiday home buyers who have held off buying in recent years are now reaping the rewards. Self-funded retirees who have been watching the market from the sidelines since around 2007 are now recognising value for money and pouncing on opportunities including the occasional ‘mortgagee in possession’ property listed for sale. Another trend we have seen growing in popularity is people investing in property through a Self Managed Superannuation Fund (SMSF). This allows people the flexibility to utilise their superannuation savings (and in some cases, borrow through their Super as well) and buy property in a location of their choosing – an option which may not be available to them outside of their superannuation.
Lower interest rates have renewed investor confidence and with the likelihood of a change of government in September, many commentators are predicting renewed consumer confidence and a strong return to the property market under a new government. Generally speaking, people buy a holiday home when they are feeling good about their financial situation as well as the broader economy.
We are all looking forward to the winter months and the clear, sunny days and calm ocean conditions that we are typically treated too between now and August. A big event in town during the winter is the Rainbow Beach Family Fishing Classic. This year, the competition will run from the 28th June through until the 6th July, 2013; coinciding with the School holidays for the first time in its long history. There have been some bold predictions that the fishing will be excellent this year, with plenty of great catches already since the beginning of May. Check out these great photos of Dee’s Mum and Dad out on the Keely Rose over the Gympie Show Holiday weekend! Amazing Coral Trout catches…we are just waiting for our invite to dinner!
Francis Bacon
The stunning coastline that we live beside is very popular with people of all ages and many people want to own a piece of it by purchasing their own holiday home or beach side residence. There are plenty of cashed up bargain hunters around at the moment and although we are competing with the likes of Noosa, Peregian Beach, Coolum, Bargara Airlie Beach, etc – many buyers are seeking out the beauty and unique location of Rainbow Beach as their preferred holiday or retirement location. The fact that we are on the doorstep of Fraser Island is a great advantage as well.
Prices up and down Australia’s eastern seaboard have declined over the past 4-5 years and many buyers are taking advantage of this price correction and getting in now before the property market inevitably rises again. Real Estate Agents up and down the coast are reporting more sales to holiday home buyers, as many take note of the price drops by vendors.
The Fairfax-owned Australian Property Monitors has released a list of coastal hot spots that are now more affordable than a decade ago. In many, prices have continued to fall since the global financial crisis. And lower prices mean higher rental yields, especially over peak periods such as Christmas and Easter. We have a number of holiday homes that gross in excess of $40,000 per annum; some of which can be purchased for between $400,000 - $700,000. Gross rental yields of 6-7% are not uncommon; making the return on investment for buyers pretty attractive. One of the most popular holiday homes we manage rents out for just under $5,000 per week over the peak period; providing the owners with an impressive passive income on their investment.
Holiday home buyers who have held off buying in recent years are now reaping the rewards. Self-funded retirees who have been watching the market from the sidelines since around 2007 are now recognising value for money and pouncing on opportunities including the occasional ‘mortgagee in possession’ property listed for sale. Another trend we have seen growing in popularity is people investing in property through a Self Managed Superannuation Fund (SMSF). This allows people the flexibility to utilise their superannuation savings (and in some cases, borrow through their Super as well) and buy property in a location of their choosing – an option which may not be available to them outside of their superannuation.
Lower interest rates have renewed investor confidence and with the likelihood of a change of government in September, many commentators are predicting renewed consumer confidence and a strong return to the property market under a new government. Generally speaking, people buy a holiday home when they are feeling good about their financial situation as well as the broader economy.
We are all looking forward to the winter months and the clear, sunny days and calm ocean conditions that we are typically treated too between now and August. A big event in town during the winter is the Rainbow Beach Family Fishing Classic. This year, the competition will run from the 28th June through until the 6th July, 2013; coinciding with the School holidays for the first time in its long history. There have been some bold predictions that the fishing will be excellent this year, with plenty of great catches already since the beginning of May. Check out these great photos of Dee’s Mum and Dad out on the Keely Rose over the Gympie Show Holiday weekend! Amazing Coral Trout catches…we are just waiting for our invite to dinner!
Rainbow Realty Deal - May 2013
“It had long since come to my attention that people of accomplishment rarely sat back and let things happen to them. They went out and happened to things.” Leonardo da Vinci
If there was ever a time to buy in Rainbow Beach – you would have to say it is now. Less than three years ago, anything within 500 metres of the beach would’ve cost you in excess of $500,000 – but in today’s market you can pick up a three bedroom house within 400 metres of the beach for $300,000. Even closer to the beach (within 200 metres); there has been recent sales activity around the mid $400,000’s for a three bedroom home.
Median house prices have decreased significantly since the market peak in late 2007/early 2008 and with the number of distressed sellers/mortgagee in possession sales increasing; there is a great opportunity to buy a beachside property for less than what you would’ve previously.
Up and down the eastern coastline of Australia – there are above average amounts of stock on the market. ‘Lifestyle’, coastal and small rural properties (or ‘hobby farms’) have been most affected by the economic downturn whilst regions within close proximity to mining towns have continued to see gains in property values over the past four – five years.
Reports from our southern Queensland based real estate agent counterparts on the Sunshine and Gold Coasts herald a mini revival in sales figures with the Gold Coast residential market clawing back some semblance of ‘normal’ after five years of turmoil. Property values on the Gold Coast have dropped by as much as half in the period 2007-2013, leaving receiverships, bankruptcies and jilted property investors in its wake. “Apart from Cairns, no market was affected more than here,” Ray White Surfers Paradise principal Andrew Bell says. (Source: Australian Financial Review February 2013)
Many property prices saw over-inflated rises over the periods 2002-2003 and again in 2006-2007. Some properties doubled in value during that time however; much of this was off the back of debt, borrowings and in some cases – heavily geared borrowing. The property market was on an unsustainable rise during that period and much of the recent price corrections have really been a case of the market adjusting back to sensible and sustainable values.
Luxury apartments on the Sunshine and Gold Coasts were once considered a must-have in millionaire property portfolios. But the asset class lost its sheen during the economic slump as investors who had locked themselves into off-the-plan contracts at 2007 prices watched the value of their asset dwindle. (Source: Australian Financial Review February 2013)
Many property experts view 2013 as a year of stabilisation - when sellers start accepting value levels and buyers less likely to make low offers but are open to negotiation. We should start to see more transactions and before long, there will be resurgence in values.
Generally speaking, coastal and rural property values tend to see a more volatile rise and fall in values over time when compared to metropolitan residential property values. There seems to be more of a ‘boom or bust’ pattern versus a steady growth/minor decline which you tend to see in the cities and larger towns. This is partly due to the sheer number of properties in a given area (which effects the percentage or volume of sales transactions) but is also due to the vagaries of coastal/rural property’s appeal. Ie. When the Baby Boomer generation began the mass “sea change” – coastal properties saw a huge increase in values because demand outstripped supply in many cases.
Fingers crossed we get back to a “normal” market before long and vendors who are keen to sell can find a buyer and the two remaining real estate agencies in Rainbow Beach can survive (it was only five years ago that there were four agencies ).
If there was ever a time to buy in Rainbow Beach – you would have to say it is now. Less than three years ago, anything within 500 metres of the beach would’ve cost you in excess of $500,000 – but in today’s market you can pick up a three bedroom house within 400 metres of the beach for $300,000. Even closer to the beach (within 200 metres); there has been recent sales activity around the mid $400,000’s for a three bedroom home.
Median house prices have decreased significantly since the market peak in late 2007/early 2008 and with the number of distressed sellers/mortgagee in possession sales increasing; there is a great opportunity to buy a beachside property for less than what you would’ve previously.
Up and down the eastern coastline of Australia – there are above average amounts of stock on the market. ‘Lifestyle’, coastal and small rural properties (or ‘hobby farms’) have been most affected by the economic downturn whilst regions within close proximity to mining towns have continued to see gains in property values over the past four – five years.
Reports from our southern Queensland based real estate agent counterparts on the Sunshine and Gold Coasts herald a mini revival in sales figures with the Gold Coast residential market clawing back some semblance of ‘normal’ after five years of turmoil. Property values on the Gold Coast have dropped by as much as half in the period 2007-2013, leaving receiverships, bankruptcies and jilted property investors in its wake. “Apart from Cairns, no market was affected more than here,” Ray White Surfers Paradise principal Andrew Bell says. (Source: Australian Financial Review February 2013)
Many property prices saw over-inflated rises over the periods 2002-2003 and again in 2006-2007. Some properties doubled in value during that time however; much of this was off the back of debt, borrowings and in some cases – heavily geared borrowing. The property market was on an unsustainable rise during that period and much of the recent price corrections have really been a case of the market adjusting back to sensible and sustainable values.
Luxury apartments on the Sunshine and Gold Coasts were once considered a must-have in millionaire property portfolios. But the asset class lost its sheen during the economic slump as investors who had locked themselves into off-the-plan contracts at 2007 prices watched the value of their asset dwindle. (Source: Australian Financial Review February 2013)
Many property experts view 2013 as a year of stabilisation - when sellers start accepting value levels and buyers less likely to make low offers but are open to negotiation. We should start to see more transactions and before long, there will be resurgence in values.
Generally speaking, coastal and rural property values tend to see a more volatile rise and fall in values over time when compared to metropolitan residential property values. There seems to be more of a ‘boom or bust’ pattern versus a steady growth/minor decline which you tend to see in the cities and larger towns. This is partly due to the sheer number of properties in a given area (which effects the percentage or volume of sales transactions) but is also due to the vagaries of coastal/rural property’s appeal. Ie. When the Baby Boomer generation began the mass “sea change” – coastal properties saw a huge increase in values because demand outstripped supply in many cases.
Fingers crossed we get back to a “normal” market before long and vendors who are keen to sell can find a buyer and the two remaining real estate agencies in Rainbow Beach can survive (it was only five years ago that there were four agencies ).
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