Property plunge attracts first home buyers

Potential Sunshine Coast home buyers who have waited patiently to make their property debut should strike while the iron’s hot.

Real estate agents are urging first-time home buyers to take the property plunge while the usually competitive investors and speculators have stepped away from a slowing market.

The stamp duty reduction earlier this month, and a forecast of possible future interest rate cuts, have brought “the great Australian dream” back into reach for hopeful home owners.

Ray White director Brett Graham said goals for first-time buyers were more achievable now than this time last year due to the slow down in market sales.

Mr Graham said an influx of new home buyers had shown an interest in entering the market in the past few weeks.

“I’ve been a real estate agent for 25 years, and there are a whole lot of circumstances that have seen a huge amount of inquiries from first-home buyers,” Mr Graham said.

“A big thing at the moment is that first-home buyers aren’t competing against investors and speculators as they aren’t in the market, so there’s more choice for property.”

Nambour has become an opportune place for first-home buyers to buy within their budget and reduce their mortgage debt.

Elders Real Estate sales marketing consultant Karen Johnston said one property that sold within a day on the market generated ample interest from first-time investors.

Ms Johnston said while potential home buyers had previously looked under the $300,000 mark, an interest rate cut had allowed them to look closer to $350,000 for their first home.

“We’re noticing a lot more younger couples, and while Caboolture used to be the area to buy, as time goes on Nambour is turning into a first-time buyer’s haven,” she said.

Ms Johnston said the current opportunities for first-home buyers were likely to remain for the next six months.

Woombye Realty principal Les Hadlow said potential buyers surfaced when the September 1 stamp duty reductions came into place, but interest had waned more recently with the unpredictability in world stockmarkets.

 

Soaring rents add to housing stress

A shortage of public housing on the Sunshine Coast is being blamed for skyrocketing rental prices and an increase in the number of homeless.

The median weekly price of a two-bedroom flat in Nambour has increased 35.1% (about $65) in the past two years, outstripping inflation ten-fold in the 12 months to June 2008.

Average rents in the Noosa, Maroochy and Caloundra areas have also risen by $50 a week in the past two years.

Queensland Shelter, a community-based organisation which identifies housing as a human right, is leading a national campaign after the Residential Tenancies Authority released data showing the massive inflation in rental prices between June 2006 and June 2008.

Executive officer Adrian Pisarski said these figures were linked to a lack of public housing.

“It is not commonly recognised, but public housing is the driving force of the housing industry, and despite the decade of neglect from the Liberal government, the Rudd government has not yet done anything to improve the crisis,” he said.

Mr Pisarski said Queensland’s public housing stock levels were the lowest in the country, currently standing at 3.5% compared with the national average of 5%.

“There’s just not enough housing supply; that’s what’s causing rents to rise most rapidly,” he said.

“Currently the Sunshine Coast has one of the lowest levels of public housing in Queensland, so it’s a critical area to add supply for the most vulnerable.

“The Coast has a triple whammy – rapid development with huge population growth putting pressure on the housing market but no new supply at the bottom end.

Mayor slams property developer

Mayor Bob Abbot launched a scathing attack yesterday on property development company Investa, saying he will continue to deliver what the community has asked for.

Mr Abbot had come under fire from Investa property development manager Michael Hopkins, who accused him of playing politics with the state government at the expense of the application to develop another three stages of the Bellflower estate.

The mayor used a general council meeting as a forum to declare he did not care what developers thought of him.

“He can throw as much muck at me as he likes,’’ Mr Abbot said.

“It is costing us at least $4 million to fix the Chancellor Park lake system and millions to get the road network functioning.

“We will not repeat those mistakes. These new estates need genuine planning. I don’t believe we should be rushing down the path of past mistakes.’’

Mr Abbot said he had given the council-staff report recommending refusal of approval for 72 lots to the north of Sippy Creek, and a further 204 lots to the south, the utmost consideration.

The development would have created 540 new dwellings, including multi-unit buildings to four storeys.

“They (the staff) gave that direction on good planning grounds,’’ Mr Abbot said.

“We will be making sure that what we deliver is genuine, well-planned and non-political. To accuse us of that and to throw in affordable housing as an argument shows the incredible attitude of this developer.’’

Mr Abbot said master and structure planning for the entire Palmview area would be complete within 10 to 12 months and would set a benchmark for future development on the Sunshine Coast.

The decision to refuse the application was supported 11-1 by councillors.

Investa Property Group development manager Michael Hopkins said the company was disappointed with the council’s decision to reject the application.

“Our disappointment extends to the more than 600 people who are on our waiting list trying to secure a foothold in Bellflower, which is absolutely perfect for young people, families and average workers who cannot afford the near-coast, high- priced alternatives,’’ Mr Hopkins said.

“We have just 64 blocks of land left to sell based on our existing approvals.

Land in stages three and four of the development sold for an average price of $190,000.

Mr Hopkins said the company would consider all options available to it.

“This decision means stocks of affordable land east of the Bruce Highway will be exhausted by as early as the end of 2009.” There are no winners here.”

 

Is the council stalling cheaper housing?

A developer has accused the Sunshine Coast Council of stalling a major affordable housing project to play politics with the state government.

Investa Property Group development manager Michael Hopkins said mayor Bob Abbot and some councillors were using the Bellflower development at Sippy Downs to play politics instead of allowing cheap land to be released to the market.

“What is clear is that the mayor is using Bellflower as a firing shot to the state government to indicate his stance on any development on the Coast, even that which is logical, needed and well planned for,” Mr Hopkins said.

The council voted Monday to accept the recommendation of planning staff and refuse approval for an application to develop stages six, seven and eight of the estate south of Chancellor Park.

The development was considered premature, coming ahead of structure and master planning for the Palmview major development area of which it was considered part.

“It’s just too early,’’ planning chair Russell Green said. “The body of work necessary has not been done. This is rural land.”

But Mr Hopkins said Bellflower offered the cheapest residential blocks east of the Bruce Highway. He said council had already approved an indicative structure plan for the new stages and infrastructure was already in place.

The application will come before full council today with Mr Hopkins imploring councillors to approve it.

He said he found it odd that floodplain issues were cited in council officer recommendations for refusal.

“Bellflower stage eight is above flood level and stages six and seven are no longer in the floodplain,” Mr Hopkins said.

“He said all the research indicated that the demand for affordable housing exceeded supply.

“We’ve had multiple buyers for each block we have offered for sale.

“The stages are an extension of the Bellflower community, and are not linked to the state government’s fast tracking of greenfield sites.

“Citing lack of infrastructure planning as a reason to deny development seems to be a consistent message from the mayor even when infrastructure is fully planned for, as is the case with the Bellflower application, and in fact much of the supporting infrastructure already exists.”

Mr Hopkins said Investa had already contributed more than $1 million in traffic contributions in line with Bellflower’s development and more would come through the next stages.

 

No need for Noosa property panic

Lies, damn lies and statistics wrote British politician Benjamin Disraeli about the persuasive power of numbers.

The latest figures from the Real Estate Institute of Queensland (REIQ) for June 2008 quarter are a case in point.

While the report showed a whopping 36.9% decrease in median house prices at Noosa Heads, it may be worth comparing apples with apples before property owners press the big red panic button.

The same REIQ report shows Noosa Heads had a 25.2% increase over the same quarter last year.

Quarterly percentage changes are often affected by a number of variables, such as varying quality of stock or number of waterfront properties sold, and are a reflection of what sold in that particular quarter.

REIQ Sunshine Coast chair Jean Hamer said in Noosa Heads water front block and “dry” blocks are lumped together, and less of the higher value water front blocks were sold in the last quarter.

In the March quarter, Noosa Heads experienced a 73.8% increase because a large number of waterfront properties were sold in that period.

In the June quarter, houses sold were from a lower price bracket and as a result the median “dipped” 36% from the inflated March quarter median.

“The big story is that the last 12 months to now Noosa has still gone up 25%,” Ms Hamer said.

Laguna Noosa general manager Richard Forsyth said 20 years selling Noosa real estate taught him to look at prices over long period as quarterly comparison could skew the figures.

“It can be driven by two or three huge sales, that can have a huge effect on median prices,” he said.

“We haven’t seen any prices drastically reduced.”

Mr Forsyth said Noosa’s weather, lack of high-rises and minimal new development meant there would always be demand for property in Noosa.

Greg Smith from Ray White Noosa said the last quarter had been more difficult with more stock on the market, but property was still selling at a steady rate.

Top five performers for house sales, June 2007 to June 2008

Dicky Beach

$489,500 2007 – $648,250

Bokarina

$471,750 – $617,500 30.9%

Noosa Heads

$629,000 – $787,500

Battery Hill

$365,000 – $454,000

Marcoola

$370,000 – $453,500

 

Queensland housing market defies trend, prices set to soar

HOUSE values are set to surge again as the latest real estate sales figures show Queensland has weathered soaring petrol prices and interest rate hikes.

The median price of a Queensland house has risen between 10 to 20 percent in most places over the last 12 months and even higher in some regional areas, according to Real Estate Institute of Queensland figures released exclusively to The Sunday Mail.

Southeast Queensland and regional centres including Gladstone and the Whitsundays are among the state’s hottest real estate growth spots, the new figures for the latest quarter show.

And even in lesser performing areas, median prices generally have remained steady.

The heartening figures, after a tough start to the year in economic terms, have prompted property experts to predict houses prices are poised to rise strongly again before the end of the year.

House-hunters and investors are tipped to swarm back into the market as the recent cuts to interest rates and the scrapping of stamp duty for first home buyers kick in.

REIQ president Peter McGrath said the message for would-be home-owners was simple: “The market has bottomed … the sooner they can move back into the market, the better.”

Property analyst Michael Matusik expects house prices to increase by 25 percent over the next two-and-a-half years, driven by the “strong fundamentals” of continued population growth in Queensland, the strength of the resources sector and a lack of stock.

The median house price across Queensland has almost tripled from $135,000 to $390,000 over the past decade, with Brisbane values soaring even faster – from $155,000 to $495,000.

The time to buy is now

But home buyers are being urged to move quickly because the market is poised to take off again on the back of cuts to interest rates and stamp duty.

“These results fly in the face of some commentators who had predicted doom and gloom and substantial price drops for property markets across the country,” REIQ president Peter McGrath said.

“Brisbane, particularly, was an extremely pleasant surprise.

“Considering what the consumer had to go through during that quarter – two interest rate rises and the filtering down of earlier interest increases, massive spikes in petrol prices and general negativity about the economy – the market has shown a lot of resilience.

“It’s set a very important platform for the market to ease forward later this year as interest rates begin to come down. The message is simple: The market has bottomed in real terms, interest rates have stabilised so if people have the financial capacity to enter the market, now is the time to start looking to go forward.”

Prices in the regions

The Whitsundays region performed the strongest over the three-month period, with median prices up 7.4 per cent to $385,000, while Gladstone’s industrial growth saw a 2.2 per cent rise to $390,000.

Rockhampton slipped 0.9 per cent to $315,000, Bundaberg stayed flat at $282,500 and Fraser Coast fell 3.1 per cent to $305,375.

Townsville’s median fell 1.8 per cent over the quarter to $355,500, Mackay’s by 1.5 per cent to $374,250 and Cairns stayed at $375,000.

Toowoomba’s median price of $259,000 remained unchanged and still offers the most affordable option in the southeast region.

Price factors

Mr McGrath said figures for the current quarter, up to the end of September, would also be flat or marginally lower due to a lag effect, but four “building blocks” were now in place for growth by year-end:

• The Reserve Bank’s decision on Tuesday to reduce the official interest rate by a quarter of a per cent – the first cut in seven years.

• Major banks passing the cut on immediately to customers.

• The removal of stamp duty on properties worth up to $500,000 from the start of this month should encourage first-home buyers back. The proportion of first-time purchasers, traditionally usually 20 per cent of the total, had slipped to 17 per cent.

• The flattening of prices in the June quarter had given prospective buyers some breathing space.

“They haven’t been chasing their tails with big price increases as they tried to save,” Mr McGrath said.

Defying market trends

The continuing mining boom and strong migration, especially from overseas, to Queensland underpinned the ability to escape the big falls that had been feared.

And results for the 12 months to the end of June show strong growth, with prices across most of SEQ and major regional centres climbing between 10 and 20 per cent.

With superannuation funds reporting their worst losses in two decades and the sharemarket down 25 per cent for the year, Mr McGrath said the rise in house values was impressive. In the past decade, the Queensland median house price has almost tripled from $135,000 to $390,000.

Property analyst Michael Matusik says returns on residential houses have outstripped all other major investment options over 10 years and predicts property prices will grow by 8 to 10 per cent per annum over the next three years.

 

 

It’s official: interest rates down

The Reserve Bank of Australia (RBA) has cut its key interest rate by a quarter of a percentage point, its first reduction in the cash rate in almost seven years.

The central bank lowered the cash rate to 7.0 per cent from 7.25 per cent following today’s monthly board meeting, having raised the rate 12 times since May 2002.

The reduction was widely anticipated following a series of statements and speeches made by the RBA in the past month, which now appears more concerned about a rapid slowdown in economic growth, rather than lingering inflation pressures.

However, today’s rate move will mean little to borrowers if retail banks do not pass on the cut to their customers in the form of lower mortgage and other lending rates.

Only the ANZ and National Australia Bank among the major banks have pledged to cut their lending rates by a quarter of a percentage point in line with the RBA’s decision.

Non-bank lender Wizard Home Loans has already cut its rates in anticipation of today’s move.

Homeowners would see a monthly reduction of about $50 in their mortgage repayments on an average $300,000 loan if the RBA’s rate cut is passed on in full.

Prime Minister Kevin Rudd said while the interest rate cut was welcome, it was not a day for celebration.

“Interest rates took a long time to rise, and they will take a long time to come back down, and the road will be a very uneven one on the way through.”

Official interest rates rose 10 times from May 2002 under the previous Howard government, and twice this year under the Labor government.

“That is why the government is committed to continuing a policy of responsible economic management, designed to make it as easy as possible for the Reserve Bank in the future to reduce interest rates further,” Mr Rudd said.

“There will be more tough times ahead as we continue to battle the economic turbulence abroad and high inflation and interest rates at home.”

 

Home buyers tipped to re-enter market

The real estate industry is hoping an interest-rate cut and changes to stamp duty for first home buyers will attract disillusioned house hunters back into the market.

State government stamp-duty charges for first home buyers are scrapped from today Monday 1/9 on properties valued up to $500,000, and the Reserve Bank is expected to cut the official interest rate when it meets tomorrow.

The stamp-duty cut alone could save buyers up to $10,000, and the combined savings might provide the shot in the arm the market needs. Economists say a combination of a slowing economy, deteriorating business conditions and tight credit markets will ensure the central bank cuts interest rates tomorrow.

It remains to be seen if lenders will be quick to pass on the savings.

Deals available in the bottom end of the housing market could also prove an incentive to buyers.

At an auction in Maroochydore on Saturday, a two- ground-floor unit with Maroochy River views, at Bradman Avenue, attracted few bidders, absolutely no first-time buyers and a mere $285,000 as the highest offer.

There was one young woman who was “just looking at prices” and said that the cost of properties was a bigger hurdle for first-time buyers than interest rates.

As the bidding began, from a low of $220,000, she began to take a stronger interest.

Faltering at $275,000 after six bids from three bidders, agent Brent Higgins had a pow-wow with the vendors and after a short break, it was announced “they intended to sell”.

One more bid and it was all over, close to the reserve price, the agent claimed.

Does the mystery woman think that result will influence her position?

“Certainly I’ll be more serious about looking now,” she said after the property sold.

Freelance auctioneer Michael Hughes said the apartment was “a good buy”.

 “You won’t lose in good locations – but sellers need to react to the market – properties are (still) selling every day,” he said.

He said there were not as many bidders at auctions as there used to be.

“Realistic vendors are selling, (because) they are listening to feedback.

“People who are not selling (their properties) have got unrealistic expectations.”

Real Estate Institute of Queensland spokeswoman Jean Hamer believed the stamp- duty cuts would certainly help bring first-time buyers back to the market.

“I know of one of my own support staff who wanted to get in; she has been waiting (for this),” she said.

“Areas like Chancellor Park and Bellflower will be looking for this,” she said, adding that the scrapping of the stamp duty would affect unit and townhouse sales and have a “positive flow-on”.

She denied the Coast property market was over-priced. “I’m not sure you can say that,” she said. If you have land and build on it, just look at the profit.

Ms Hamer said recent figures showing Coast growth had fallen from 3.4% a year to 2.1%.

“It’s not bad that we get a slowdown as it allows infrastructure to catch up,” she said.