House prices have doubled or risen even more over the past five years in a string of sought-after hotspots, often by the beach, new figures show.
The stunning growth reveals the effect of the sea-change trend that was gathering steam pre-pandemic but has taken off since the widespread shift to remote working.
Ultra-low interest rates, high-speed internet and long lockdowns have fuelled the demand to move out of capital cities for a more relaxed lifestyle.
Noosa has been drawing southern buyers, sending Sunshine Beach house prices soaring 161.1 per cent in five years to a median of $2.2 million, Domain data shows.
Noosa Heads rose 88.6 per cent over five years to a median of $1.495 million, while along the Sunshine Coast, Minyama jumped 138.1 per cent to $1.375 million.
The area has seen interest from prestige buyers, with a Sunshine Beach trophy home fetching $17 million in May last year, snapped up by former prime minister Kevin Rudd and his wife, businesswoman Therese Rein. A Noosa Heads home sold for $10.91 million in a deal linked to Gina Rinehart.
“The real top end of town – your corporate captains, your industry leaders – they’re securing these properties in Noosa,” Dowling & Neylan director Dan Neylan said.
“They now feel very confident they can continue their work-life and continue to operate from a regional location like Noosa.
“Some of them are feeling they might not travel as much as they might have previously, and they want to secure a good property and a lifestyle property they can come to… They feel if we’re going to see lockdowns, they want to be able to isolate in a nice environment.”
He said the new Sunshine Coast Airport’s international flight capacity would make it viable for businesspeople or expats to have a home in Noosa and travel internationally for work once it is possible to do so.
Reed and Co director Adrian Reed said the area recorded steady growth pre-Covid, and the airport and hospital infrastructure projects laid robust foundations for the market.
“Post the first shutdown, it’s like someone lit the Bunsen burner under Noosa, and it probably accelerated beyond our expectations,” he said.
“It’s the perfect storm from a property perspective with some other economic fundamentals like low interest rates.”
Highly skilled work can now be performed from lifestyle locations, bringing affluent Sydneysiders and Melburnians north. At the same time, retirees have pulled forward plans to move to the area, and wealthy individuals who can no longer travel internationally are looking for Noosa homes instead, he said.
Other remote workers prefer Byron Bay, where the median house price skyrocketed 120.2 per cent in five years to a median of $1.96 million.
That’s for the suburb of Byron Bay alone – nearby neighbourhoods are recording a spillover effect, with Suffolk Park up 81.8 per cent to $1.45 million over the same timeframe.
Locked-down Melbourne and Sydney remote workers have been looking for more space near the beach in a smaller town, Cape Byron Property’s Bryce Cameron said.
“I think [remote work] is here to stay, so that is really changing the outlook for many people,” Mr Cameron said.
“They’re now able to live their desired lifestyle and have the same income as in the city.
“A few of my most recent sales have actually been sight unseen. [Of] the last two, one was from Sydney, one was from Melbourne.”
Beaches closer to the city recorded strong growth, with Palm Beach on Sydney’s northern beaches up 102.9 per cent in five years to a median of $4,362,500, while Bulli in Wollongong rose 95.7 per cent to a median of $1.4 million.
Melburnians have been flocking to the Mornington Peninsula as the city goes through extended periods of lockdown.
Prices in sought-after Sorrento are up 94.9 per cent from five years ago to a median of $1.91 million, with Blairgowrie up 85.7 per cent to $1,392,500.
The back beaches have become more popular with buyers seeking seclusion, and Somers house prices rose 135.4 per cent to a median of $1,706,750 in five years.
RT Edgar Portsea’s Geoff Hall said the growth had been “extraordinary”.
“I’ve never seen a rise this rapidly in a market before, and I don’t think anybody has,” he said.
“Every time there’s a lockdown, it seems to throw fuel at the fire … People want their little slice of heaven.”
Melbourne-based buyers are often looking for holiday homes or homes where they could split their time, spending four to five days at the beach and the rest in Melbourne if their offices allow this flexibility, he said.
With little for sale, he expects prices could keep rising.
“I don’t think we’ve seen the top of the market yet,” Mr Hall said. “We’re expecting a spike in the market as soon as the lockdown is over.
“The pent-up demand is enormous.”
Article Source: www.domain.com.au
Boomers a ‘Force of Change’ in Retirement Property Market
As teenagers they invented pop culture and now—much older, collectively wealthier and arguably wiser—they are defining a new age group and re-inventing retirement living.
Millenials may have surpassed them in numbers but baby boomers are still having significant influence on world economies and trends—not least in the property market.
“The baby boomers are coming through and have become a force for change in the seniors’ market,” said Cameron Kirby, managing director of Kirby Consulting Group, a retirement and aged care specialist.
“The more progressive operators are definitely getting their ducks in a line.
“And there’s a lot of developers interested in dipping their toes in the market for the first time, some of them with more than 30 years’ experience in the development industry, because they can see there is huge opportunity.
“[But] many developers that want to enter into this space are probably a bit reticent because they’re worried about the complexity of it, they’re worried about the unknowns.
“The opportunities, however, far outweigh any of their concerns.
“And if you’re offering what the market wants, you’re going to be successful.”
Kirby will be a speaker at The Urban Developer Developing For An Ageing Demographic vSummit on April 28.
“The sector is continuously changing,” he said.
“You’ve got land lease communities and over-55 developments that have been moving into the traditional retirement village space.
“And, at the moment, there’s a lot of talk about integrated care in retirement living with a greater weighting on having more retirement villages and less aged care.”
Last year, a survey by benchmarking firm StewartBrown showed 58 per cent of aged care homes were operating at a loss, up from 55 per cent the previous financial year, and 32 per cent made a cash loss.
“Aged care has got some major challenges … but in the meantime there’s also the baby boomers coming through,” Kirby said.
“What I’ve seen over the last 10 years is a bit of a slide where low-care people that used to go into aged care are more likely to go into retirement villages and, equally, people that used to go into more traditional retirement villages are now probably more interested in moving into land lease communities and over-55s concepts.
“Land lease communities are growing very fast and are hugely attractive, there’s no doubt about that … but retirement villages have upped the ante enormously as well, they tend to offer much more wellness and are moving more towards the care side of things.
“Certainly, operators who are offering care in retirement villages are going from strength to strength.
“There’s an increasing amount of quality retirement villages with hotel and resort-style living and state-of-the-art amenities coming online. Pools, gyms, spas, saunas, cinemas, you name it they’ve got it.
“But those retirement living operators that have a full continuum of care solution that’s what the market is demanding … [the boomers] know they’re going to need some support down the line so they’re planning for their future.
“It really doesn’t matter, however, whether you’re doing aged care, retirement, over-55s or land lease community … because demand is outstripping supply. There is a market for all of those and they attract very different types of buyers.”
Kirby said given Australia’s ageing demographic, the seniors and retirement market was a “much more defensive proposition” for developers.
“Just as healthcare is a defensive stock on the stock market, I think seniors living is a much more defensive play in the property sector,” he said.
“It tends to be more needs driven than what a straight-out residential property play would be.
“And so, I think if we are going to be headed towards a softer property market this is an area that can really shine because seniors will still have the wealth and will still want to move and look at downsizing opportunities.”
Article Source: www.theurbandeveloper.com
Houses still in high demand, apartment prices lag
The price growth of apartments continues to lag rocketing house prices in many suburbs across Sydney and Melbourne, with the trend showing little signs of abating.
The widening price gap between houses and units is a long-term trend driven by land scarcity in our biggest cities, with the difference tending to be widest between houses and high-rise apartments.
While house prices in Sydney’s North Ryde soared 29 per cent in the year ended March 31, unit prices in the suburb grew by a mere 6 per cent. Similarly, prices in Homebush grew 29 per cent, compared to unit price growth of just 7 per cent.
In Sydney’s Pennant Hills, house prices grew 24 per cent, while unit prices were flat, figures from CoreLogic show.
It is the same story in many parts of Melbourne, with Essendon North house prices growing by 19 per cent over the same period, while apartment prices fell by almost 1 per cent.
Houses in Melbourne’s Canterbury saw their prices jump more than 14 per cent, while units dipped 4 per cent. In inner-city Hawthorn East, houses were up 9.6 per cent, compared to a 6 per cent fall in unit prices.
Earlier analysis by CoreLogic showed more expensive property markets, particularly those close to CBDs and in areas where there are high numbers of units relative to houses, tend to have the biggest price gaps.
Eliza Owen, head of research at CoreLogic, says one of the reasons for the relative recent poor price performance of unit markets is COVID-19 related travel restrictions, including the closure of Australia’s international borders.
Demand for investment units in urbanised centres likely fell because of their high exposure to migrants and international students.
During the height of the pandemic, many units were empty, particularly in inner Melbourne.
The re-opening of international borders is seeing arrivals from overseas rising quickly, which should help to support the prices of units in both Sydney and Melbourne, she says.
However, Owen says one area of concern remains the prospect of higher mortgage interest rates, with prices of investment units more sensitive to rate movements than houses.
Many analysts expect the Reserve Bank of Australia to start increasing official interest rates this year, possible as early as June, with lenders expected to pass on any hikes in their variable rate mortgages.
Following two years of surging property prices, the big gains made over the past year appear to be over.
Sydney house prices were 0.1 per cent lower in March after being flat in February. Unit prices were 0.5 per cent lower in March and 0.3 per cent lower in February.
In Melbourne, house prices down 0.2 per cent lower in March, following flat prices February. Unit prices were 0.2 per cent higher in March and 0.1 per cent higher in February. However, those small gains came after big falls in inner-city unit property values during COVID-19 restrictions.
Coming off the back of strong annual growth, falling affordability continues to be a key factor affecting property market conditions.
A surge in the cost of living and rising rents is restricting the ability of prospective homeowners to save and borrow.
In last month’s federal budget, the government expanded the number of places available in its low-deposit scheme.
The program allows first-home buyers, and others, to buy new or existing dwellings with a deposit of only 5 per cent, instead of the usual 20 per cent that is needed to avoid paying expensive lenders’ mortgage insurance.
Article Source: www.brisbanetimes.com.au
Brisbane house prices leave units in the dust
The gap between house and apartment prices in Brisbane is now the widest in at least two decades, but is set to shrink over the next 12 months as housing affordability bites and buyers choose cheaper options, Colliers says.
Colliers residential director Queensland, Andrew Roubicek, said the price difference between houses and apartments in Brisbane has reached 45 per cent compared with an average of around 20 per cent between 2003 and 2015.
Brisbane house prices further escalated with the onset on COVID-19 when people placed a higher value on privacy with interstate migration to the Sunshine State also propelling Queensland’s property market.
Property data company CoreLogic estimates that Brisbane house prices increased 32 per cent in the year ended March 31 compared with 15 per cent growth for units over the same period.
CoreLogic said house price growth is slowing faster than units and Mr Roubicek predicted that Brisbane apartment values will rise by “at least” another 15 per cent in the next 12 months.
Mr Roubicek said rising construction costs have hit the new apartment market hard and that comparable established stock costs about 25 per cent less.
“There have been several examples of new developments achieving pre-sale [targets] only to have developers refund deposits and tear up contracts because building costs escalated to a point where it was financially unviable,” he said.
“As a consequence, developers who are looking to acquire new development sites are forced to increase their projected sales prices by around 20 per cent.
“Just 18 months ago a two-bedroom apartment in Brisbane might have sold off the plan for $9000 per square metre.
“But to build that apartment today the developer would need to achieve a sale price of $11,000 per square metre for the project to stack up.”
He said as result new stock is selling slower than established units, a trend that will play out through the rest of this year.
“The market is coming to terms with those newer prices and are seeing in the short-term better value for money in the established unit market.”
He said it is a similar scenario to when GST was introduced in 2000.
“When GST came into the market overnight the cost of housing went up 10 per cent and put more demand into the established market, where the prices of stock grew and the difference between new and second hand became narrower.”
Mr Roubicek said he believed the record price gap between houses and apartments will contract through the year.
“If you believe in history, if you believe in charts, and take a long-term view you would have to think that gap is going to narrow because everyone’s talking about affordability, everyone’s talking about interest rate movements,” he said.
“Natural forces will push what would have been a buyer of a detached home back into the unit market because of affordability.”
Article Source: www.afr.com
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