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Property price growth on Gold and Sunshine coasts outperforming Brisbane, REIQ report finds

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Property price growth on Gold and Sunshine coasts outperforming Brisbane, REIQ report finds
PHOTO: Highgate Hill, Milton, Kelvin Grove and West End suffered the biggest sales price declines in the inner-city ring. (ABC News: Isobel Roe)

Several of Brisbane’s more expensive suburbs are among the biggest losers in the property stakes, a Real Estate Institute of Queensland (REIQ) report rating performance in 2017 has found.

The Queensland market monitor showed Highgate Hill, Milton, Kelvin Grove and West End suffered the biggest sales price declines in the inner-city ring, followed by Wilston, New Farm and Taringa.

Highgate Hill in Brisbane’s inner-south suffered a median price plunge of 17.9 per cent year-on-year to $937,500.

Milton’s median price fell 11.4 per cent to $855,000, compared to 2016.

In Kelvin Grove, the median sale price was down 7.9 per cent to $764,750 and West End dropped 6.3 per cent to $1,030,500.

But some Brisbane suburbs enjoyed strong growth.

Teneriffe in the city’s inner-north became Brisbane’s first $2 million suburb in 2017 with a median sale price of $2.4 million — up 30 per cent on 2016.

At the same time, Kangaroo Point and Kalinga joined the $1 million club, with median sale prices soaring 28.4 per cent and 22.5 per cent respectively.

REIQ media manager Felicity Moore said inconsistences in price growth throughout the city could be attributed to “supply issues”.

“When you see a price soften significantly, it could be that there’s an additional level of stock developed, such as house and land packages that meets the level of demand,” Ms Moore said.

Gold Coast skyline
PHOTO: The Gold Coast recorded an overall increase in median sale price of 7.7 per cent. (Supplied: Tourism and Events Queensland)

Beach lifestyle proving attractive

Both the Gold Coast and the Sunshine Coast outperformed Brisbane in terms of house price growth.

The REIQ report showed the Gold Coast recorded an overall increase in median sale price of 7.7 per cent and the Sunshine Coast achieved 5.9 per cent, while Brisbane only managed an average of 2.6 per cent.

Ms Moore said the rediscovery of the beach “lifestyle markets” was somewhat overdue.

“When you look at what those markets have to offer, the Gold Coast and Sunshine Coast are just world class coastal beachfront living at its best,” she said.

“They’re not densely populated, they’ve both got world class beaches, great shopping and good schools and the amenities that go into those communities are of a very high standard.”

She said 2017 results positioned the Gold Coast as the strongest market in Queensland and among the top 10 nationally.

“It’s a similar story with the Sunshine Coast, although for years the level of supply going into that market has been a bit constrained,” she said.

“It’s struggled from a long-time lack of construction of new dwellings and when there’s demand building up it puts pressure on prices.”

Mining downturn impact

The report indicated the mining downturn continued to impact parts of central Queensland.

In Blackwater, the median sale price nosedived 70 per cent to just $36,000 last year, down from $120,000 in 2016.

Five years ago, the average sale price was $450,000.

“It’s a very sad situation but there is good news on the horizon,” Ms Moore said.

“The global body that monitors coal demand is forecasting that from 2022 there’s going to be a global uptick in demand, so in anticipation of that we’re seeing some coal miners pull some smaller mines out of mothballs.

“There’s a level of confidence coming back into the coal sector.”

Originally Published: brisbaneinvestor.com.au

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Opinion

House prices: Australia’s property market facing longest downturn in decades

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Aussie homeowners could find the value of their properties slashed by as much as 15 per cent as our housing slump deepens. It seems there’s no relief in sight for Australian property owners as experts warn house prices will continue to tumble well into next year.

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Experts warn of ‘debt bomb’ as housing downturn worsens

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AUSTRALIA is facing a “debt crisis” — and the property market and our entire economy are at risk as a result.

That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.

According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.

If that happens, it would also cause an economic “catastrophe”.

Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.

“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.

“There’s $1.7 trillion held by the banks in mortgages for owner-occupies and investors. And that’s about 65 per cent of their total lending.

“That’s higher than any other country in the Western world by a long way.

“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”

Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.

“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.

“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”

debt bomb

Melbourne homeowner Mohammed Souid told 60 Minutes his family was experiencing mortgage stress. Picture: 60 MinutesSource:Supplied

It’s a sentiment shared by Laing and Simmons real estate agent Peter Younan, who said the median house price in his patch in Granville in Sydney’s west had dropped from $1.2 million to $1 million in just one year — a shocking $200,000 plummet.

He said foreclosures had also risen by 600 per cent in the region.

“The mortgage stress is definitely being felt especially in this area,” he said.

60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.

What does a million dollars buy in Aussie capital cities?

debt bomb

Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.

“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.

But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.

debt bomb

Property investor Bushy Martin says homeowners are to blame for the crisis. Picture: 60 MinutesSource:Supplied

However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.

One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.

Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.

And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.

That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.

“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.

Related articles: Experts warn of ‘debt bomb’ as housing downturn worsens

Source: news.com.au

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Opinion

This suburb has been identified as one of Australia’s most consistent property markets and it’s on the Gold Coast

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ONE of Australia’s most consistent property markets is on the Gold Coast and is primed for future price growth.

Clear Island, where this home at 8 Istana View is listed for sale is among Australia’s most consistent property markets.

ONE of Australia’s most consistent property markets is on the Gold Coast and is primed for future price growth.

Clear Island Waters has been identified in the latest Hotspotting Price Predictor Report in the top four most consistent Australian suburbs for property sales.

According to Terry Ryder of Hotspotting the suburb was one which recorded a consistent level of sales and demand quarter after quarter.

It has recorded about 40 property sales every quarter for the past two years, despite its high median house price of $1,150,000.

It’s median house price increased by 16 per cent in the past 12 months.

Mr Ryder said consistent sales patterns were generally a precursor to price growth and that suburbs such as Clear Island Waters “represented safety for investors’’.

“They are usually not boom markets, but have the valuable quality of solidity. And markets with this high level of even performance often have good price growth over time,’’ he said.

Mr Ryder said it was an exampled that consistent markets could produce good price growth in the short-term and steady long-term capital growth rates.

Real Estate Institute of Queensland Zone Chair Andrew Henderson predicts a lift in buyer activity on the Gold Coast during spring.

The Gold Coast has grown up

gold coast houses

“Historically as the weather warms up moving into springtime we also see an increase in buyer market activity and there is a rise in the number of properties being listed for sale with planned spring auction dates,’’ he said.

“We are anticipating continuing buyer activity with the strong migration numbers to the Gold Coast form interstate and also with the number of auctions being conducted increasing each week.’’

Mr Henderson said units close to the beach were in demand from owner occupiers, property investors and also those looking for a beachside “weekender”.

Source: www.news.com.au

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