property report – july 2014 - westpac · july 2014 brisbane upgraders in brisbane are generally...

QueenslandProperty Report – July 2014

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Queensland – Property ReportJuly 2014

National Overview

Upgraders seize opportunities

The past 12 months have provided an abundance of opportunities for upgraders to climb the property ladder. Interest rates are at record lows, rising values have boosted home equity, and many Australians are trading up to larger homes or more desirable locations, or are achieving lifestyle aspirations such as moving to acreages or beachside locations.This quarter, Herron Todd White valuers around the nation identified those areas where upgraders are buying, and which locations can give buyers the best of both worlds – decent capital growth and a quality lifestyle.

PROXIMITY TO SCHOOLS AND FACILITIES IS A KEY DRIVERFor many upgraders, the decision to move is based on meeting the needs of a growing family, and consequently, family-friendly suburbs have been the key beneficiaries of upgrader activity.

In Brisbane upgraders are attracted to middle-ring suburbs – like Grange, Newmarket, Ashgrove, Coorparoo and Camp Hill – located 5-10 kilometres from the CBD. Here, family homes start in price at around $600,000. In Sydney, the Hills District offers ideal family living with quality homes and plentiful local facilities – and as a bonus, capital growth is virtually assured with the construction of the Norwest rail line, due for completion in 2019.

The same preference for family living is driving upgrader activity in Darwin. Notably, the northern suburbs of Nightcliff, Rapid Creek and Jingili offer larger homes on generous blocks with the extra appeal of quality local schools.

In Tasmania, upgraders are heading to areas where character homes are available. Many of Hobart’s inner suburbs such as Sandy Bay and Battery Point have benefited from this trend.

Despite property values rising steadily across many Australian property markets, there are still areas where prices are below previous peaks....

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A CHANCE TO GET MORE BANG FOR THE UPGRADE BUCKDespite property values rising steadily across many Australian property markets, there are still areas where prices are below previous peaks, and this is allowing upgraders to enjoy more bang for their buck. On Queensland’s Gold Coast, for example, beachfront homes in Mermaid Beach are priced around $3 million – a far cry from the price tags of up to $12 million seen in 2007.

In Perth, the riverside suburb of Victoria Park is becoming a sought-after address among upgraders. Despite close proximity to the CBD, Victoria Park is cheap relative to similar neighbouring suburbs and this should also underpin future value growth.

INNER-CITY LIVING HOLDS APPEALReflecting the trend towards near-city living, inner-city suburbs are also attracting upgrader interest. In Melbourne, Fitzroy North offers a thriving cafe and restaurant scene, and as demand surges in neighbouring suburbs, capital growth in Fitzroy North is expected to be healthy over the long term. In Adelaide, Bowden is undergoing significant urban renewal and the gentrification of surrounding suburbs should also underpin growth in this area.

With so many opportunities available to achieve your personal property goals, I invite would-be ugraders to take a look through our state-by-state reports to discover the suburbs of choice for other upgraders, plus a guide for what you can expect to pay for your next home.

Brendon HulcombeCEO - HERRON TODD WHITE

Despite close proximity to the CBD, Victoria Park is cheap relative to similar neighbouring suburbs and this should also underpin future value growth.

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BrisbaneUpgraders in Brisbane are generally opting for suburbs 5-10 kilometres from the city centre, notably Grange, Newmarket, Ashgrove and Bardon on the north side, and Coorparoo and Camp Hill to the south. Along with proximity to the city, these suburbs offer local retail centres, cafes, good schools and generous public transport. Over the past 10 years prices have risen by a total of around 40%, though the bulk of gains were recorded between 2004 and 2008. Looking ahead, gains are expected to be moderate in the short term at least.

Apartment buyers in the above-noted suburbs can expect to pay around $350,000 to $400,000 for an established dwelling, or $450,000 to $500,000 for a new apartment. A standard 3-bedroom or 4-bedroom house typically costs between $600,000 and $800,000, while prestige homes are priced from $1 million to $1.8 million.

GOLD COASTUpgraders on the Gold Coast are generally seeking centrally located suburbs with proximity to either the Broadwater or the beach. Preferred locations include Runaway Bay, Hollywell and Paradise Point to the north, and Broadbeach, Broadbeach Waters, Mermaid Beach and Burleigh Heads to the south.

Over the past 10 years capital growth on the Gold Coast has been slow, ranging from about 5% -10% in total in the under-$1 million price bracket. Over the next 1-5 years we expect capital growth of up to 10% for houses, possibly less for apartments, with total growth for the decade ahead anticipated to be about 15%.

Two-bedroom low-rise units in these suburbs are priced from $350,000 to $450,000; high-rise apartments are priced up to $750,000. Standard 3-bedroom and 4-bedroom houses on dry allotments can range from $500,000 to $1 million in Mermaid Beach and Burleigh Heads. Prestige homes can cost $5 million in newer estates such as Sovereign Islands, while waterfront properties in Broadbeach Waters and Mermaid Waters can be priced at over $5 million.

Queensland

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TOOWOOMBAPreferred locations for Toowoomba upgraders include Highfields, Middle Ridge, Hodgson Vale, Mount Lofty, East Toowoomba and Westbrook. These areas provide larger housing options appropriate for families, coupled with an abundance of local amenities. Indeed, Highfields is one of Queensland’s fastest-growing suburbs, and the median house price – currently $470,500 – has risen 5.6% over the past 12 months.

Mount Lofty and East Toowoomba are neighbouring suburbs offering parks, private schools and plenty of local facilities. The median price in East Toowoomba is currently $544,250 (8.3% growth in 2013) compared to $385,000 in Mount Lofty (5.8% growth in 2013). Older-style units in both suburbs can cost between $200,000 and $280,000; prices rise to over $300,000 for brand new, modern 2-bedroom units. Prestige homes can achieve prices from $600,000 to more than $1 million.

Housing in Middle Ridge, on the southern outskirts of Toowoomba, comprises a mix of older-style homes on acreage and modern houses on 600-700 square metre lots. Units and townhouses are priced over $300,000; standard 4-bedroom houses can achieve prices of $550,000; and prestige homes can cost from $600,000 to over $1 million.

SUNSHINE COASTMost upgraders on the Sunshine Coast are looking for proximity to the beach, while the rest are typically looking for a tree change by upgrading to a rural residential property with a larger home. The upgrader market has been slow and is just starting to warm up, with purchasers able to buy well below replacement cost, most notably in the less popular rural residential market.

In the most active upgrader price range of $600,000 to $1 million, about 750 sales are expected in 2014. This represents an increase on 10 years ago, when there were 473 sales in this price bracket, but sales are still below the peak of 937, reached in 2007/8. In the over $1 million price bracket, around 200 sales are expected this year, falling short of volumes recorded 10 years ago (259 sales) and the peak in 2007/8 (315 sales).

In the past 10 years there has been a 20% growth in the median home price, which started out at $365,000, rose to $460,000 at the peak, fell back to $420,000 and now sits at $438,500. However, growth has been experienced mostly in the under $500,000 price category, with quite limited growth being seen in the upgrader price range of $600,000 to $1,000,000.

Most upgraders on the Sunshine Coast are looking for proximity to the beach, while the rest are typically looking for a tree change by upgrading to a rural residential property with a larger home.

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HERVEY BAY REGIONThe most desirable upgrader areas across the Fraser Coast are those located close to the beach, shops and schools, and priced below $350,000. A 2-bedroom apartment in one of the more popular locations typically sells for between $200,000 and $270,000, while standard 3-bedroom and 4-bedroom houses are priced from $270,000. Prestige homes are selling for up to $700,000. Capital growth rates are expected to recover slowly, buoyed by a shortage of stock in the lower price brackets.

BUNDABERG REGIONThe Bundaberg market has remained steady following the devastating floods of January 2013, and for upgraders modern suburbs such as Ashfield and Kalkie offer modern 4-bedroom homes priced from $400,000 to $500,000. The unit market remains steady with older units priced from $180,000 to $300,000, and more desirable esplanade-front apartments priced up to $400,000.

GLADSTONE REGIONEstablished, modern dwellings are the preferred option for Gladstone upgraders, and suburbs such as Kirkwood and New Auckland currently offer 4-bedroom homes priced below $500,000. The older, central suburbs of Gladstone provide smaller, more modest accommodation in the $250,000 to $350,000 price range.

ROCKHAMPTON REGIONThe City of Rockhampton has several suburbs attracting particular upgrader interest. On the south side, The Range is an older suburb with an elevated location and convenient access to schools, shops, hospitals and the CBD. Over the past 10 years the median house price has increased by 120% from $168,000 to $370,000, and at present, standard 3-bedroom and 4-bedroom homes are priced from the high $300,000s through to $500,000. Prestige homes can command over $700,000.

The northern suburb of Frenchville offers quality homes often with views of the Berserker Ranges. Upgraders are active in this locality and median house prices have risen by 97% since 2004. Standard 3-bedroom and 4-bedroom homes are currently priced from the mid-$300,000s, with prestige homes costing over $600,000. Based on the quality of homes targeted by upgraders we believe these properties will deliver slow albeit steady capital growth over the coming years.

The City of Rockhampton has several suburbs attracting particular upgrader interest.

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MACKAY REGIONUpgraders in Mackay are heading to the more established and modern suburbs, and in locations like Glenella and the new subdivisions of Beaconsfield, near-new 4-bedroom homes are priced at around $500,000. In the prestige market, Erakala – a fringe residential/rural suburb – has achieved a number of sales over the $1 million mark. Volatility in the mining industry suggests that future capital growth in Mackay may be limited.

TOWNSVILLE For Townsville upgraders, suburbs within a 5 to 10-kilometre radius of the city centre hold appeal. Locations such as Kirwan, Douglas, Annandale and Idalia offer modern homes with established community facilities. House prices in these areas range from around $300,000 to about $400,000, though prestige homes generally start at around $800,000. Upgraders aiming to be closer to the water can consider the inner-city areas of Belgian Gardens and North Ward. Price entry into these suburbs is from $400,000 to $750,000. The prestige market starts in price at over $1 million and this generally buys fully renovated homes with water aspects or elevated local views. Unit prices range from the mid-$300,000s through to $700,000 for prestige apartments. Townsville’s property market is currently at the start of a recovery phase and this should provide momentum for capital growth moving forward.

CAIRNSUpgraders aren’t a significant force in the Cairns property market, reflecting the population’s relatively transient nature. That said, there are pockets of acreage on the Cairns urban fringe – such as Goldsborough Valley, 30 kilometres south of the city – which can appeal to upgraders seeking more space and lifestyle. An entry-level acreage property is typically priced from $400,000 to $600,000, while some prestige houses on larger allotments (10,000–20,000 square metres) can command prices of up to $2 million.

Telephone 1300 880 [email protected]

Local expertise. National strength. Trusted solutions.Herron Todd White is Australia’s leading property valuatiuon and advisory group. For more than 45 years, we’ve given our customers peace of mind and the confidence to make good-decisions for their vital property investments. Whether you are buying or selling, expert independent advice is the smartest property investment you can make.

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property report – july 2014 - westpac · july 2014 brisbane upgraders in brisbane are generally...

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