Property investors should be considering the Sunshine Coast: Hotspotting's Terry Ryder - Queensland Property Investor
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Opinion

Property investors should be considering the Sunshine Coast: Hotspotting’s Terry Ryder

Property investors should be considering the Sunshine Coast Hotspotting's Terry Ryder

EXPERT OBSERVER

I believe real estate markets are driven more by local factors than national ones. While many commentators are placing great significance on interest rate reductions as a prime driver of real estate markets, I’m much more interested in what’s going on the coalface of local economies.

And, in those terms, I put a high rating on the Sunshine Coast as a market that investors of all kinds should be considering. I regard the Sunshine Coast as the strongest market in Queensland at the moment and indeed one of the strongest in Australia.

I see events happening there as an economic revolution, which is shifting the Sunshine Coast from tourist destination to international city – a massive transition that’s happened in the past 2-3 years and continues to happen.

I recently completed a comprehensive 30-page report called The Sunshine Coast: Australia’s Most Compelling Growth Story, in which I note that the Sunshine Coast economy was no longer predominantly reliant on tourism because of the creation in recent years of strong health, education and technology industries – all part of an infrastructure program totalling more than $20 billion.

Economies reliant on tourism traditionally fail to deliver sustainable real estate growth. But the Sunshine Coast has diversified and strengthened and is now, I think, the nation’s most compelling growth story.

It has a $17.7 billion economy, making it one of the largest regional economies in Australia, and on infrastructure it’s outspending several of the nation’s capital cities.

The health, education and technology sectors – including the new $5 billion health precinct – are bringing new residents to the Sunshine Coast and this is providing strong impetus to the real estate market, notably at the Top End. The median house price for Noosa Heads has increased 40% in the past three years, while the median apartment price has jumped 25% in the past year.

In terms of becoming an international city, the Sunshine Coast will soon have an international airport and an international broadband network connection to Asia. Earlier this year the Sunshine Coast was named in the Top7 Intelligent Communities of 2019 by the global Intelligent Community Forum, alongside major international cities like Chicago.

Central to everything that’s happening in the region is the creation of a Sunshine Coast CBD from the ground up – a $5 billion enterprise which is now under way on a 53ha greenfield site in central Maroochydore.

The new city centre has attracted investment from local, national and international firms interested having an early presence in the growing region.

The Sunshine Coast is among the top 10 leading regions in the country for employment generation, adding more than 20,000 jobs over the past five years. The $1.8 billion Sunshine Coast University Hospital (SCUH) has created 5,000 jobs since opening in April 2017 and the new Maroochydore City Centre is forecast to provide 15,000 jobs over the lifespan of the 20-year project and inject $4.4 billion into the economy.

In addition, the Sunshine Coast International Broadband Network will deliver 800 new jobs once it’s operational next year and will deliver the fastest data connection to Asia from the east coast of Australia.

Part of the economic revolution of the Sunshine Coast in recent years has stemmed from the region’s growing reputation as an innovation and technology hub.

Demographer Bernard Salt has described the Sunshine Coast as “the entrepreneurship capital of Australia “because of the large number of knowledge-based start-ups and small businesses such as information technology, clean-tech, creative industries, aviation and education.

The population of the Sunshine Coast is forecast to reach 580,000 by 2041, an increase on the previous forecast of 558,000.

The Sunshine Coast is one of Australia’s fastest-developing economies, growing each year at rates well above national averages and is expected to expand to $33 billion by 2033.

As a consequence, our new Spring edition of The Price Predictor Index has found that the Sunshine Coast has more locations with rising sales activity than any other municipality in Australia. And that kind of outcome is likely to create sustainable long-term price growth.

 

 

 

Source: www.propertyobserver.com.au

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Brisbane

Brisbane and Melbourne retail markets are peaking: HTW Retail Clock

Brisbane and Melbourne retail markets are peaking HTW Retail Clock

Three of the eight capital cities are now at the top of the retail market, with Melbourne and Brisbane joining Canberra, according to valuation firm Herron Todd White’s (HTW) latest retail property clock.

The Central Coast, Gold Coast, Ipswich and Coffs Harbour also moved to the peak of market position.

Sydney remained at the approaching peak of market position this month, while Ballarat, Bendigo, Burnie-Devonport and Launceston are holding as rising markets.

Mackay joined Adelaide, among others, beginning their retail market recovery.

Brisbane and Melbourne retail markets are peaking HTW Retail Clock 1

Geelong and Illawarra remain at the start of their decline.

There’s not great news for Ballina, Newcastle, Lismore and Toowoomba, which are now declining markets, joining Echuca and Gippsland.

Hobart’s retail market is still nearing the bottom of the market, as is Gladstone, South West WA and now Rockhampton.

Alice Springs joined Perth, Darwin, Cairns, Townsville, Wide Bay, and Emerald at the bottom of the market.

 

 

Source: www.propertyobserver.com.au

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Brisbane

Brisbane seller market expectations highest since beginning of 2018

Brisbane seller market expectations highest since beginning of 2018

Nearly 70 per cent of Brisbane home sellers are expecting property prices to increase within the next six months, according to new data.

A survey carried out on 3306 Australian vendors by OpenAgent.com.au last quarter on their expectations for price movement for Brisbane property found respondents were the most optimistic they’ve been since the beginning of 2018, with 67 per cent believing prices would rise within the next six months.

At the end of 2018, 17 per cent of vendors believed Brisbane house prices would go down within the next six months; now, only 7 per cent believe prices are likely to drop over the next six months.

This is despite recent figures which showed Brisbane’s property prices had fallen again, making it one of only two capital cities in Australia to record house price declines over the quarter as well as the year.

The latest quarterly Domain House Price Report, released last week, showed house prices within the Brisbane LGA, where the median house price is $666,500, had fallen over the past year by 1.3 per cent.

Brisbane seller market expectations highest since beginning of 2018 1

However Carson Teh, data analyst from OpenAgent, said sellers remained optimistic about Brisbane prices.

“Though seller expectations in Sydney and Melbourne have now overtaken those in Brisbane, the optimism surrounding Brisbane’s property market has proven to be comparatively more stable over the past three years,” said Mr Teh.

“Home sellers in Brisbane have been expecting prices to be on the rise for at least three years, however, we haven’t seen confidence levels this high since the beginning of last year.”

He said the Brisbane property market had been performing well for many years.

“The Brisbane market hasn’t been as dramatically affected by the recent downturn in comparison to other capital cities such as Sydney and Melbourne,” said Mr Teh.

Brisbane seller market expectations highest since beginning of 2018 2

“Those looking to buy have a little time to make a move before dwelling values reach the next peak, however, those looking to sell could benefit from waiting for the market to bounce back even more,” said Mr Teh.

“Upsizers, in particular, should look to upgrade now before the gap between your current home and next home widens even more, whereas downsizers could do better off waiting for the market to improve.”

Compared to the previous quarter, the proportion of Brisbane home sellers that were expecting price increases has gone up by 28 per cent.

Another 26 per cent of Brisbane home sellers believed prices would stay about the same for the next six months.

Source: www.domain.com.au

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Opinion

First Home Buyers: How to buy with just a 5 per cent deposit

First Home Buyers How to buy with just a 5 per cent deposit 1
The hardest part of buying a property in Australia isn’t necessarily affording the sky-high prices – it’s mustering up enough cash to cover a 20 per cent deposit for a loan.
For first home buyers, a deposit of at least 20 per cent of the property’s valuation is recommended as it generally helps you avoid costly lenders insurance.
But take stagnant wage growth, sprinkle in some cost of living and stir up the rise of the share economy, and suddenly you’ve got a reality where only high-income millennials are able to get their foot in the door.
But not all hope is lost.
There is a way that first home buyers can have a deposit of just 5 per cent – and have the Federal Government as the guarantor for the remaining 15 percent – if you play your cards right.

Q: What is the First Home Loan Deposit Scheme?

A: The First Home Loan Deposit Scheme is a draft proposal by the Coalition Government to help first home buyers enter the property market.
Under the scheme, buyers taking out their first home loan will be able to gain finance with a deposit as little as 5 per cent, with the government acting as guaranteeing the difference (in this case 15 percent) of a standard down payment.
Buyers will still have to pay the remaining 15 percent, as they are technically borrowing 95 percent of the property’s valuation from a lender.
It’s currently still a draft, but if it is approved by all stakeholders by November 4 it will come into effect from January 1, 2020.
First Home Buyers How to buy with just a 5 per cent deposit

Q: Sounds risky for the government – what’s to stop millennials from asking the government for cash to live in multi-million-dollar mansions?

A: You might be relieved to find that scheme has caps on the prices of the properties that first home buyers wish to purchase.
In expensive markets such as Sydney (where the median cost of a house is $1.08 million), first home buyers can purchase a property up to $700,000.
If you’re outside a capital city – or a significant regional centre like Wollongong – that cost drops down to $450,000.
The government has set out price thresholds for each state and territory, to help even the playing field across the country:
State/territory:Capital City/Regional Centre:Rest of State:
NSW$700,000$450,000
VIC$600,000$375,000
QLD$475,000$400,000
WA$400,000$300,000
SA$400,000$250,000
TAS$400,000$300,000
ACT$500,000N/A
NT$375,000N/A

Q: How do you know if your regional centre is big enough to pay the capital city prices?

A: The capital city price caps apply to “large regional centres” which have a population greater than 250,000 people.
To give a couple of examples, that would mean places like the Illawarra, the Sunshine Coast, the Gold Coast, Newcastle, Lake Macquarie and Geelong would all fit under the capital city price caps.
First Home Buyers How to buy with just a 5 per cent deposit 2

Q: Part of the reason house prices are so high is that rich people buy property after property. What’s stopping the kids of rich parents leveraging the government for this scheme when they can already afford a deposit?

A: To meet the scheme, first homebuyers will have to meet a whole raft of eligibility criteria that essentially tests their means.
Only singles who earn a taxable income of up to $125,000 a year will be able to access the scheme, while only couples with a combined taxable income of $200,000 a year will be eligible.
Inheritance is not taxed in Australia, but the eligibility criteria may assess a person’s current access to cash.
First Home Buyers How to buy with just a 5 per cent deposit 3

Q: This all sounds great, what’s the catch?

A: There’s no overt catch (remember this is the government, not one of the banks), but the scheme is only available to the first 10,000 people who apply.
Last year about 110,000 Aussies bought their first home, which means the scheme is really only available to roughly one in 10 first homebuyers.
If the scheme becomes law on January 1 next year, it is reasonable to assume all 10,000 places will be filled almost immediately.
First Home Buyers How to buy with just a 5 per cent deposit 4

Q: Just how much are people saving with this scheme? Can you give me a few examples?

A: Okay, let’s run through a few scenarios:
SCENARIO ONE
Imagine Ben is a carpenter living in Newcastle who earns a national average salary of $74,074. He is applicable for the scheme because he earns under $125k a year and he can get a property under the Sydney price cap because Newcastle has more than $250,000.
That opens up properties like this three-bedroom house in Mayfield, valued at $640,000.
First Home Buyers How to buy with just a 5 per cent deposit 5
To get his foot in the door of this family home, Ben would only need a deposit of $32,000 (the cost of a decent second-hand dual cab ute) to secure finance, with the government guaranteeing the rest.
Without the scheme, Ben would have had to pay as much as $128,000 (20 per cent) – representing an immediate saving of $96,000.
First Home Buyers How to buy with just a 5 per cent deposit 6
SCENARIO TWO
Jenna and her husband live in Melbourne with their two young kids. As a household, they have a combined income of $194,000 – just scraping in below the $200,000 eligibility cap.
With ongoing childcare costs, Jenna cannot put enough money away for a 20 per cent deposit if she wants to buy a property in the next decade. Jenna’s current property, a two-bedroom unit, is becoming too small for the four of them.
First Home Buyers How to buy with just a 5 per cent deposit 7
But under the scheme, Jenna could secure finance for this beautiful four-bedroom home at Pakenham, valued right on the Melbourne limit at $600,000.
Traditionally, a 20 per cent deposit for this house would cost Jenna and her husband $120,000 – but the scheme would reduce that to just $30,000.
First Home Buyers How to buy with just a 5 per cent deposit 8
SCENARIO THREE
Jessica lives in Gove, in the remote far north of the Northern Territory. She works from home in an online capacity, and earns approximately $45,000 a year.
She wants to own a home in Arnhem Land, but is hesitant because her wage does not allow for a lot of discretionary spending.
Under the scheme, Jessica could buy this three-bedroom home in Bynoe valued at $339,000.
First Home Buyers How to buy with just a 5 per cent deposit 9
She would need to save $16,950 (approximately $325 a week for a year, or 42 per cent of her weekly wage) for a five percent deposit.
Saving a 20 percent deposit for this property – approximately $67,800 – would take Jessica 208 weeks, or four years at her current rate.
First Home Buyers How to buy with just a 5 per cent deposit 10

Q: Last but not least … why is the government doing this?

A: Guessing the personal motivations behind policy is always a game fraught with danger. What we do know is that this scheme is part of a promise given by Scott Morrison during his election campaign.
A better reason is that having more first homebuyers (who can service their loans) simply means a stronger and more balanced economy.
Ironically, suddenly giving 10,000 households access to quick deposits may actually push up the prices of more affordable properties, leaving everybody back at square one.
Put simply, there is no such thing as a silver bullet for first homebuyers – and even though the government is being guarantor for the remaining 15 per cent of the loan – first homebuyers still have to pay it back eventually.

 

 

Source: www.9news.com.au

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