PRDnationwide reports that prices for properties in Roma and the Gold Coast are the best they’ve been in decades and that there are numerous bargains to be had for savvy buyers who are willing to take a risk in a subdued market. Bad press has stymied buyer confidence in the region, but the lower prices are expected to draw both domestic and foreign purchasers out of hiding. The Gold Coast is a city located in the southeast of Queensland and is known as the most populous non-capital city on the continent. Meanwhile, price trends in Roma have long bucked the downward pressure faced by the rest of the country and continue to see gains. For more on this continue reading the following article from Property Wire.
The Gold Coast property market in Australia is set to improve in the second half of 2012 with signs there may already be an upswing in buyer numbers.
The recovery is expected to be gradual, according to PRDnationwide, but the outlook is the best it’s been in years.
PRDnationwide research analyst Robert Matta said emerging indicators suggest a likely turn in the Gold Coast market is on the horizon.
‘There are exceptional buying opportunities present in the marketplace for those brave enough to test their nerve and savvy enough to buy well,’ he said.
He believes upgraders from outside the region are looking to purchase on the Gold Coast to capitalise on the opportunity to purchase a property they could not afford until now.
‘Investors may also consider re-entering the market soon enough after several years on the sideline, with rental yields firming on the back of bargain buys,’ he explained.
He pointed out that the key challenges facing the coast’s property market are vendors adjusting their price expectations to meet market demand and consumer nervousness.
‘The signs of a struggling property market may not appeal to all potential buyers, however ,the risk of taking the leap, given the spate of negative property data and sentiment will often yield the greatest returns,’ he added.
Meanwhile, PRDnationwide research shows sales volumes for both houses and units are at their lowest levels in over two decades. Just 2,158 houses changed hands during the six months to June 30, 2012, down 17.1% per annum since June 2007.
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The median house price continued to fall, down 6.7% to $466,750 from a year earlier.
Some of the best value on offer in the market is from excess unit stock in the higher end of the market with developers eroding margins to make sales.
‘Since the peak experienced during the June 2007 period, unit sales volumes have decreased on average 19.8% per annum. Anecdotal evidence suggest enquiry levels from end uses, particularly first home buyers and those looking to downsize, have increased since the beginning of 2012 influenced by increase mortgage affordability, sustained price corrections and a notable price disparity between the house and unit market,’ said Matta.
The Gold Coast land market has also recorded the lowest sales volumes in 25 years with a total of 318 transactions registered during the six months to June 2012, representing a 21 per cent fall from the December 2011 period.
‘It is anticipated that the trend of declining sales volumes will turn markedly in the coming years as competition between the banks drives variable mortgage products to affordable lows providing yet another incentive for first home buyers to enter the market,’ added Matta.
Research also shows that the Roma residential property market has experienced exceptional growth during the April 2012 half year period. The volume of house sales increased by almost 70% and the median house price rose by 13.3% during the year to 30 April 2012, as resource workers and investors flocked to the region.
Matta said during what had been a challenging five years in the Australian housing market, Roma had bucked the nation’s trend to record consecutive average annual growth of 7.2% in the median price during this period.
‘Impressive rental yields are currently on offer to investors looking to capitalise on purchasing affordable property in an unaffordable rental market. Significant resource based projects in the area will continue to underpin and safeguard the local economy by generating a stable flow of short to long term employment opportunities that will support a positive outlook for capital asset appreciation,’ he explained.
He added that a shortage of both long term and short term accommodation in Roma has had an adverse impact on the current rental market, with exorbitant growth providing the catalyst for a spike in developer activity and subsequent uplift in land sales.
‘Super charged price escalations over the year have led to an increasingly unaffordable rental market, particularly for renters without the benefit of subsidised rent. Many long term residents in rental properties are either relocating as a result of the increase cost of living or more noticeably are considering a mortgage as a more affordable alternative. Investors are also doing their part to alleviate further price growth pressures, fast becoming a dominant segment in the Roma property market,’ Matta said.
During the year to the end of June 2012, median rental prices for four bedroom houses increased by 69.4% to $800 a week. The median rent for three bedroom houses was $500 for the June 2012 quarter, a 42.9% increase from the June 2011 period.
The Australian Capital Territory is still in a downward phase of its property cycle but investor activity is increasing, the research also shows.
A total of 1,403 houses sold during the first half of 2012 was the lowest level of sales in the past 20 years. The median house price was down. PRDnationwide Inner North director Jeremy Francis said that the market’s stagnation was created by vendors’ high expectations and buyers’ dented consumer confidence.
However, the top end of the market has remained stable in the past two years, with properties transacting for $1,000,000 plus accounting for 4% of sales.
‘My forecast is for slow but steady growth over the next 12 months. Then three to six months after the election I expect prices will rise quite strongly as the new government will start spending money in the region to deliver on election promises,’ said Francis.
Derek Whitcombe, PRDnationwide Canberra Central principal, said the investment market has been buoyant over 2011 and into 2012, with investors targeting properties in close proximity to shopping centres and educational institutions.
‘The demand from investors is particularly strong in the inner areas such as Kingston in the inner south and Braddon in the inner North, Bruce in the inner Belconnen area and also in the new developing area of Molonglo which is less than 10 minutes’ drive from the CBD,’ he said.
He believes that in the next six to 12 months there should be a slight improvement in sales of established homes under $800,000 in most areas and apartment sales between $400,000 and $650,000 should also be quite healthy.
‘The deductibility of stamp duty for investors and the high rent return in Canberra property is seeing strong interest from Sydney investors. Most popular are one bedroom and study and smaller two bedroom configurations with recent developments not seeing as much interest by tenants in one bedroom designs,’ he explained.
The median rent for a four bedroom house in the inner city increased by 11.5% in the year to March 2012, closing the period at $725 per week. The strong demand for detached houses extended to the Woden and Weston Creek region, recording a 9.1% growth for a four bedroom house.
The report says recently announced cuts to the federal budget have further dented buyers’ confidence as public servants contemplate interstate relocations. Also the effect of the European economic issues is still keeping the brakes on for some people.
This article was republished with permission from Property Wire.