Gold Coast PROPERTY

Carrara properties were the best riverfront performers in terms of price growth last year, according to Colliers International research.

The firm’s Gold Coast Beachfront Riverfront Housing Property Watch report reveals that while main river houses across 12 suburbs achieved an annual capital growth of 5.3 per cent, Carrara almost tripled that with a 15.7 per cent rise.

Paradise Waters remained the Gold Coast’s most expensive riverfront suburb in 2009, although only two sales were recorded.

Sorrento finished a close second with four sales producing the $4.131 million average, followed by Southport where four sales averaged just over $3 million.

“Paradise Waters showed average capital growth during 2009 of two per cent, which is the lowest we have seen there in the 13 years of monitoring riverfront sales,” said Colliers International prestige residential director John Natoli.

“Sorrento’s average price and an average growth rate of 11.1 per cent were buoyed by the sale of Bartinon in Marseille Court for $8 million, the highest price paid for a riverfront home during 2009.

“That sale also helped push the 10-year riverfront growth total for Sorrento to … 525 per cent.”

The report’s author, Colliers International Gold Coast research manager Lynda Campbell, said only Paradise Waters and Southport were achieving average riverfront property prices of more than $1 million 10 years ago.

“In 2009, all riverfront suburbs recorded average prices over $1.1 million, with the exception of Cronin Island and Surfers Paradise where no sales were recorded and Ashmore where the average price was just under $1 million,” she said.

“Price growth has been outstanding with all suburbs experiencing triple figure growth over the 10-year period.”

Mr Natoli said interstate buyers were returning to the Coast’s prestige property market.

“With their markets experiencing increased activity and rising prices, they are seeing value here, and finding price corrections for beachfront and riverfront land have provided some enticing buying opportunities,” he said.

Over the 12 months to June 2009 and in raw number terms the states which recorded the greatest growth in population were: New South Wales (119,534), Queensland (116,533), Victoria (116,250) and Western Australia (68,077).

In this week’s RP Data blog, they take a look at the trends in regional population growth analyzing the 25 fastest growing Local Government Areas (LGA) of the country based on the total increase in population.

Australia’s 25 fastest growing Local Government Areas

Victoria and Queensland each had eight LGA’s in the top 25.  In Victoria all of the areas except for Greater Geelong where located within the Greater Melbourne metro area.  All of the Melbourne LGA’s could be characterized as being on the outer fringes of the city and in locations which generally enjoy relatively affordable house prices.  Of course greater Geelong, although being outside of Melbourne, is within commuting distance to the city and once more house prices in this region are relatively affordable compared to Inner Melbourne prices.

In Queensland the LGA’s tend to be larger (especially after recent amalgamations) and Queensland LGA’s occupy four of the top five positions of fastest growing areas.  Six of the eight Queensland LGA’s are located in the south-east corner of the state and the remaining two are the large regional cities in North Queensland (Townsville and Cairns).

New South Wales recorded five regions within the top 25 fastest growing LGA’s, all of which were situated within the Sydney metro area and most were situated in the outskirts of the City in areas which are relatively affordable.  The exception was the Sydney LGA which is recording strong population growth thanks to inner city densification.

Western Australia had three LGA’s on the list all of which were located in the outer precincts and can be broadly described as providing more affordable housing than areas close to the city.

Finally in the Australian Capital Territory the Unincorporated ACT LGA, which covers most of the Territory, was the nation’s 13th fastest growing LGA during the period.

The clear trend is that populations are tending to grow the most in the outer more affordable regions of our major population centres.  It’s not really surprising given that these major regions have the largest amount of land available for greenfield development, the strongest job prospects and most abundant amenity.  In saying this, poor infrastructure provision in these areas often makes travelling around the city difficult and time consuming

We would expect these trends to continue however, we feel it would be beneficial for Government’s to encourage population growth in areas outside of these regions to ease the strain on infrastructure which is already insufficient in the majority of these regions.

The federal government has denied Australia is a property tax haven attracting overseas investors at the expense of locals trying to enter the market.

Housing Minister Tanya Plibersek said while only about 1.67 per cent of new properties were purchased by foreigners in January, Labor needed to ensure their bids weren’t unfairly hiking up high-end house prices.

“We need to make sure this is within the rules, and we are asking the Foreign Investment Review Board and Treasury to ensure that’s happening,” she told Network Ten on Sunday.

Ms Plibersek denied negative gearing and capital gains tax exemptions made Australia a tax haven, saying both measures encouraged locals to buy property.

“We see that there is an economic as well as a social benefit for ordinary people to be able to afford an ordinary home in Australia,” she said.

Ms Plibersek wouldn’t be drawn on what the “broad-ranging” upcoming Henry Tax Review would recommend in relation to both incentives.

“We understand that housing supply and the way that tax influences (it) is the absolutely critical issue here,” she said.

The housing minister was also tightlipped on whether she thought the Reserve Bank would increase interest rates when it meets on Tuesday.

Ms Plibersek said rates were still at emergency lows and it was likely they would go up over time – although the government would prefer them to remain reduced.

“We never like to see interest rates go up, because we know that every time they do, it’s a bit more stress on the family budget,” she said.

Reserve Bank Governor Glenn Stevens’ appearance on commercial television this week has sparked heated debate about the state of the property markets in Australia, but property author Margaret Lomas says it didn’t really clarify the central bank’s position.

Stevens gave a rare interview to Channel Seven’s Sunrise program, and when asked if there was anything Australians should be concerned about, he nominated the state of the property market.

“I think it’s a mistake to assume that, a… riskless, easy, guaranteed way to prosperity is just to be leveraged up into property,” he said.

“You know, it isn’t going to be that easy. And I think if we think about property prices as parents – you’re a parent, as am I – I’ve got kids that within not too many more years are going to want somewhere of their own to live and you wonder, you know, how is that going to be afforded because the prices are getting quite high.”

The comments have sparked a lot of media commentary on property in recent days, but Lomas, chair of Property Investment Professionals of Australia, says the RBA Governor didn’t reveal much about RBA policy.

“These comments do nothing to explain the current position of the RBA on housing affordability nor its intended approach to an economy which remains skittish,” she says.

“Yes property is rising in price in some areas, but in others it remains eminently affordable.”

Macquarie Bank interest rate strategist Rory Robertson says RP Data and Rismark International figures out this week that show house prices continuing to rise make an interest rate rise next week more likely.

“RP Data-Rismark’s February report shows house prices still trending up by one per cent per month,” Robertson says. “In 2010 so far, average house-price gains in Sydney and Melbourne have been coming at more than twice that rate.

“Before Christmas, the latest information suggested some flattening in the house-price uptrend. Data for 2010 so far, however, show that to have been a hoax. An important driver of the ongoing strength of the house-price uptrend is the growing involvement of investors.

“A year ago, growth in housing credit to investors had stalled; now, it’s again increasing as quickly as credit to owner-occupiers. Recall that Governor Stevens on TV this week famously went out of his way to nominate geared-investor purchases of existing homes as bad behaviour, or at least an activity frowned upon by policymakers.

“Looking at 5.3 per cent unemployment and the return of the biggest mining boom in Australia’s history, the RBA remains anxious that interest rates are too low. The steep ongoing uptrend in house prices just reinforces that anxiety.

“Unless something big changes in coming days, we should expect the RBA’s ‘policy normalisation process’ to continue on Tuesday.

“If that turns out to be correct, I suspect March and April’s back-to-back hikes will be followed by the RBA pausing for a meeting or two.”

Paradise Point locals have endorsed the latest waterfront development on their shores with most buyers in the $650 million Salacia Waters project coming from the surrounding area.

Data compiled by Ray White New Projects reveals that locals are the primary buyers in the Salacia Waters masterplanned community which is taking shape on the Paradise Point peninsula.

Ray White New Projects director Julian Sutherland said locals had an appreciation for the region and understood the opportunity that the project presented.

“Salacia Waters is the final piece in the puzzle for one of the city’s most prestigious suburbs, so it is no surprise that locals are eager to secure their piece of paradise in a region that boasts all of the lifestyle facilities they already love,” he said.

Mr Sutherland said in addition to local interest, Salacia Waters has had far-reaching appeal with inquiries from as far afield as Dubai, Europe, Korea, Japan, China, the United Kingdom and the US.

Six apartments and three marina berths have sold at the development for a total of more than $7.2 million.

Mr Sutherland said the majority of inquiry was from empty-nesters looking to downsize from large homes and upgrade their lifestyle.

“People are essentially looking to maximise their leisure time and Salacia Waters will offer a range of lifestyle options on your doorstep, including the beach, recreational facilities and parks as well as the project’s proximity to shopping and golf facilities,” he said.

Apartments will range in size from 87sq m to 369sq m and are priced from $430,000 to $3.1 million.

Construction of the 470-home community is well under way with the first stage due for completion later this year.

The sales office is open every day at 17 Killowill Avenue, Paradise Point

Foreigners seeking to buy residential real estate in Australia in many cases need to seek prior approval from the Foreign Investment Review Board (FIRB). However, there are still many opportunities for foreigners to acquire and develop real estate in Australia, both through certain exemptions from needing approval and through situations where approval is usually granted.

While the Australian Government recognises the strong benefits of foreign investment, particularly direct foreign investment, to Australia, its foreign investment policies are designed to help maintain stability in the Australian property market.

A government briefing paper, Foreign Investment Policy in Australia – A Brief History and Recent Developments, notes:

“The government seeks to ensure that foreign investment in residential real estate increases the supply of residences and is not speculative in nature. The government’s foreign investment policy, therefore, seeks to channel foreign investment in the housing sector into activity that directly increases the supply of new housing (i.e. new developments – house-and-land, home units, townhouses etc.) and brings benefits to the local building industry and their suppliers.”

As a result of this approach, new dwellings account for most of the properties foreign buyers purchase in Australia – and many of them are purchased off the plan, meaning buyers sign a contract to purchase the property in advance of the completion of construction.

Rule changes

The Australian Government under Kevin Rudd has recently made widespread changes to the foreign investment rules governing the purchase of residential property in Australia, in a bid to improve flexibility.

The changes, which took effect in March 2009, include:

Temporary residents are now allowed to buy an established dwelling as their principal place of residence. They can also buy any new dwelling regardless of purpose without needing to notify the government.
Foreign-owned companies, overseas trust estates and non-residential foreign persons purchasing vacant residential land need to build within two years of the purchase date. Previously, they had only 12 months.
Foreign companies can now buy existing property for the use of their Australian-based staff, provided they sell or rent the property if it’s vacant for more than six months.
Developers are no longer limited to selling a maximum of 50 per cent of one development to foreign buyers, so long as they still market their product locally as well as overseas.
Accommodation facilities such as resorts and hotels are to be treated as commercial real estate rather than residential real estate.
Non-residents of Australia aren’t allowed to purchase an established property for straight investment purposes.

However, investors are able to purchase established dwellings for the purposes of a redevelopment that will increase the number of dwellings or make an existing dwelling inhabitable. In this case, buyers must notify the FIRB of their intentions and must commence the redevelopment within 24 months of purchase. They can’t rent out the existing dwelling before redevelopment.

Non-residents can purchase newly built dwellings – whether they be units within a complex or standalone houses – so long as the property has never been sold before and has not been occupied for longer than 12 months.

Buyers must notify the FIRB of their intentions and receive approval for purchases of this kind.

Article courtesy of API Magazine. Visit their website here for more informative articles API Magazine

Now is the time to buy a luxury apartment on the Gold Coast.

The latest Midwood Queensland Investment Report for the February quarter shows there are more than 1000 medium and high-rise apartments for sale on the Gold Coast, and with just 58 sales in this category since December, it has never been a better time to get into the luxury market and negotiate a sweet deal.

Midwood Report author Bill Morris said the number of apartments on the market equated to two and a half years’ worth of stock, allowing prospectors and buyers to shop around for a good deal.

Have your say on the feedback form below

Mr Morris said prices for new luxury apartments had fallen by as much as 20 per cent in the past year.

“Anyone looking at buying an apartment in the $600,000 to $3 million price range has a lot of room to negotiate a good deal at the moment,” said Mr Morris.

“The amount (of stock) on the market is partly due to the amount of residual stock in projects that have gone into receivership, such as Freshwater Point in Broadbeach and Southport Central.”

And there was better news for those who have the means to pay in cash, with an even greater discount possible, according to Mr Morris.

“If you’ve got the cash you could walk in and pay 30 per cent less than the current asking prices, which have already been discounted,” he said.

Mr Morris predicts prices on luxury apartments will continue to drop for up to two more years, or until the supply runs out.

Mr Morris said the huge number of terminated contracts at Coast Marine Parade in Labrador and Southport Central III in Southport had contributed to the lousy sales figures for new high-rise apartments for the February quarter.

Cattleman Evan Richards and wife Sally believe they achieved ‘good value’ when they purchased a three-bedroom, 400sqm apartment with Broadwater views and a 15m marine berth at Stockland development Allisee in Hollywell earlier this year for $1.85 million.

“Stockland make quality apartments and I think this is a one-of-a-kind apartment, the outlook is sensational, it’s close to the M1 and in a growth area full of new infrastructure,” said Mr Richards.

“It’s a safe and secure place to come home to after a day managing 300 head of cattle.”

Article courtesy of the knowledgeable Bill Morris @ Midwood Australia. Visit him @ The Midwood Report

THE GFC-inspired property slowdown has filtered through to Gold Coast residential land values which have dropped an average 5 per cent since they were last measured in 2007.

Dry suburbs generally fared better than waterfront areas which took hits of up to 29 per cent, according to a State Government report released yesterday.

The Property Market Movement for the 2010 Valuation reveals that plummeting unimproved values in prestige suburbs like Mermaid Beach (-29 per cent), Surfers Paradise (-18 per cent), Paradise Point (-15 per cent), Hollywell (-14 per cent) and Runaway Bay (-13 per cent) contributed to the city’s overall negative result.

Not a surprising outcome given that the valuations are based on sales during the period and that the GFC hit the Coast’s well-heeled suburbs hard in terms of sales volumes and prices.

But ratepayers whose land values have fallen should not hold out hope for a significantly lower rates bill.

Gold Coast City Council budget boss Eddy Sarroff said some ratepayers whose valuations had fallen substantially below the city average would receive a slightly lower rates bill but changes in land values had no affect on council coffers.

“The fluctuation in valuation does not have an impact on our revenue — the only difference this fluctuation in land values will make is between one ratepayer and another ratepayer,” said Cr Sarroff.

Multiple unit properties plunged an average of 17 per cent, in line with investors abandoning the sector at the height of the downturn.

On the other side of the ledger, the more affordable and land-rich areas of Coomera and Ormeau were the standout performers, recording hikes of 20 per cent and 15 per cent respectively, reflecting the increasing attractiveness of entry-level property over the past few years.

Land in Coomera now has a median value of $205,000, while in Ormeau it sits at $197,500.

The only other Gold Coast suburbs in positive territory were Arundel, Ashmore, Carrara, Highland Park, Merrimac, Molendinar, Nerang, Parkwood, Upper Coomera and Worongary, all of which had single-digit rises. The remaining suburbs had zero or negative growth.

A  release of large blocks will be on offer at Coomera Springs next week as the 123ha masterplanned community continues to attract steady sales.

With just nine lots available in completed stages, Coomera Springs developer Global Properties Australia will release the 15-lot stage for sale off the plan.

Construction of the large-lot precinct, which provides blocks from 1200sq m to 1389sq m, will begin immediately and is due for completion in three to four months.

Global Properties manager Adam Gilbert said prices would range from $270,000 to $320,000, averaging less than $290,000.

“The families attracted to Coomera Springs all tell us the open space environment is one of the most important factors influencing their choice to live here,” he said.

“Land size is a big drawcard, especially in a location with such excellent access to education and amenities, and we have always had very strong inquiry in regard to the availability of our planned big blocks.

“The lots are in a leafy enclave virtually surrounded by bushland.

“Most have frontage to a cul-de-sac, so it will be quiet and private yet only a short stroll to the community oval.

“It is quality elevated land which will lend itself to split-level designs and striking architecture, so we are looking forward to the emergence of a distinctive neighbourhood.”

The $130 million Upper Coomera estate, off Old Coach Road, is now an established community complemented by the opening in 2008 of Coomera Springs State School.

Around 200 lots and a childcare centre remain to be developed over a timeframe of two to three years, depending on market conditions.

The estate features extensive parklands with a large centrepiece lake, boardwalks, viewing decks, parks and playgrounds, barbecue pavilions and picnic areas, a recreation oval, wildlife corridors and nature trails.

It is just west of the M1. Go to coomerasprings.com.au

The nine remaining homesites in completed Coomera Springs land releases range in size from 629sq m to 1,232sq m, are available at prices from $225,000.