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Residential
National Property Clock
NSW Central Coast
February 2018 Coffs Harbour
NSW Mid North Coast
Houses Newcastle
South East NSW
Melbourne
Gold Coast
Sunshine Coast Sydney
Canberra
Peak of
Market
Approaching Starting to
Peak of Market decline
Aldelaide Launceston
Brisbane Lismore
Hobart Mount Gambier
Albury Orange Rising Declining
Ballarat Tamworth Market Market
Echuca
Start of Approaching
Recovery Bottom of Market
Cairns Toowoomba
Emerald
Hervey Bay Bottom of
Ipswich Market
Mildura
South West WA
Townsville
Perth
Darwin
Alice Springs
Bundaberg
Liability limited by by a scheme approved under Professional Standards Gladstone
Legislation. Mackay
This report is not intended to be comprehensive or render advice and Rockhampton
neither Herron Todd White nor any persons involved in the preparation of
this report, accepts any form of liability for its contents.National Property Clock NSW Central Coast
February 2018 Coffs Harbour
Gold Coast
Units Melbourne
NSW Mid North Coast
Newcastle
South East NSW
Peak of
Ballarat Market Sydney
Approaching Starting to
Peak of Market decline
Albury Mount Gambier
Bathurst Orange
Echuca Sunshine Coast Rising Declining Brisbane
Hobart Tamworth Market Market Canberra
Launceston Perth
Lismore
Start of Approaching
Emerald Recovery Bottom of Market
Hervey Bay
Ipswich Toowoomba
Mildura
Bottom of
South West WA Market
Townsville
Adelaide
Darwin
Alice Springs
Bundaberg
Liability limited by by a scheme approved under Professional Standards Cairns
Legislation. Gladstone
This report is not intended to be comprehensive or render advice and Mackay
neither Herron Todd White nor any persons involved in the preparation of Rockhampton
this report, accepts any form of liability for its contents.Month in Review
February 2018
New South Wales
Overview and properties that are affordable for first home over paying at hotly contested auctions as seen in
Looking back on last year’s markets reveals the buyers and appeal to the wider market. On the other previous years, vendor expectations will have to be
diversity of performance that played out across the hand, there may be limited growth or slightly weaker realistic to meet the market.
nation’s residential real estate. It wasn’t just city vs. market conditions in less sought after pockets of
Houses are considered to continue to perform
regional either. Every capital had its own story to tell. Sydney or areas with higher concentrations of new
better than units in the up to $3 million price range.
unit supply. If interest rates increase later in the
It’s with this as a backdrop that we venture into our Good quality homes above $3 million performed
year or APRA was to enforce further restrictions on
hit predictions for the year. particularly well in the eastern suburbs throughout
lenders, this could exacerbate the situation and put
2017 and we consider this to continue and remain
We’ve compiled what is arguably the most further downward pressure on value levels across
stable in 2018. The large number of off-market
comprehensive quality document of on-the-ground Sydney, particularly investment grade properties.
transactions is expected to continue particularly in
knowledge about real estate performance in 2018
Eastern Suburbs the prestige sector.
– location by location. Our experts reveal their
The eastern suburbs are expected to remain fairly
expectations so you can stay many steps ahead of While most buyers looking to enter the eastern
stable this year with some product types and price
the competition. suburbs property market would generally be more
ranges potentially showing a slight decline in values.
than happy with any suburb, properties located
Sydney Considered unaffordable for most, the eastern
in secondary positions (busy roads, proximity to
Early to mid 2017 proved to be another period of suburbs has always benefited by its limited supply of
a cemetery, properties with privacy issues etc)
growth, albeit at a moderate level compared with new product (particularly the harbour and beachside
are generally the properties that are impacted
previous years. The end of 2017 however saw market locations) which is considered to help maintain its
first in a cooling market. We expect to see some
conditions easing across some locations. Sydney stability compared to some other areas of Sydney.
of these properties having longer selling periods
represents a diverse market with various price points
The buying frenzy in 2016 and into the first half than previously seen and if the vendors need to sell
and sub markets with property types performing
of 2017 has slowed to longer term levels. Smaller quickly, then these property types may see a slightly
quite differently depending on a range of factors.
sized units (under 50 square metres) and investor lower sale price achieved. Overall we see the eastern
While auction rates and activity levels have appeared
style products are expected to see some softening suburbs market remaining fairly stable throughout
to slow recently, we have still seen healthy growth
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throughout the year. Given that capital gains are 2018 with stronger price growth for higher quality
overall with houses up 2.1% and units up 5.4% over
expected to moderate slightly in the coming year properties and more sought after positions.
the full year according to CoreLogic.
and rentals for investment properties are showing
Inner West/City
We expect that 2018 will be a year of steady growth, fairly average returns, it is considered to somewhat
Auction clearance rates towards the middle to end of
particularly for properties located in highly desirable impact this sector of the market. With buyers having
2017 saw a moderate decline in the inner west with
regions with limited supply, high quality products more confidence and not getting carried away and
26Month in Review
February 2018
many choosing to withdraw their properties from the considered to be below average in quality, being built are applied or interest rates move up, we will likely
market prior to auction with the hope that the market and marketed towards the investor, with first home see slight volume and price declines. We recommend
may improve again at the beginning of 2018. This was buyers perhaps wanting more for their money. sticking to the harbour side suburbs or areas such
partly due to vendor expectations which seemed to as Circular Quay and Millers Point as they are
In addition to new stock, conversations with some
remain stubbornly high as well as a tip in the supply undergoing gentrification due to the government sell
local inner west agents indicate an increase in
versus demand balance in parts of the region. We off and light rail. New precincts such as Loftus Lane
existing properties to hit the market early this
expect 2018 to continue this trend with some price are also set to reinvigorate the area. Areas at higher
year with many attempting to cash in close to what
points affected more than others. risk are the high density unit markets such as Green
appeared to be the peak of the market last year for
Square and similar style surrounding locations.
Restrictions on lending imposed through tighter certain locations and market segments. Many of
If buying in these locations, negotiate hard, don’t
regulation means that a large portion of investors these sellers perhaps withdrew from auction at the
rush, and buy quality or unique property as this will
may be less active in the market. Many suburbs in the end of 2017 and following the recent run of negative
hold value better than cookie-cutter investor stock.
inner west such as Marrickville, Ashfield, Erskineville, media activity, have decided now is the time to sell.
Furthermore, it is probably worth buying for rental
Waterloo, Zetland and Rosebery rely heavily on With an already reduced buyer segment in some
yield in the short to medium term as capital growth
investor demand and we are predicting longer selling areas, this further increase in supply is likely to have
may be less achievable.
periods in some of these areas as well as reduced an effect on the property market for the short term
demand. In some areas this impact is likely to be at least. We still feel there is good demand above Southern Suburbs
softened with the continuation of the first home the $3 million level, with quality renovations and Our predictions for the south are that 2018 will
buyer concessions. Areas where unit price points fall dwellings finished to a high standard in traditional remain stable with a few good buys this year.
below certain thresholds will see increased demand blue chip suburbs likely to remain in high demand Properties in blue chip areas will most likely remain
from first home buyers. These locations will also as oversupply is unlikely to be an issue at this stable while properties in secondary positions (main
continue to attract demand due to being situated price point. As this segment of the market is not roads or located near industrial areas) will notice the
within very close proximity of the CBD. traditionally investor-driven, the current demand is slower market conditions. The proposed F6 Highway
also likely to remain as is. will have an impact given stage one was approved in
A predicted oversupply of units in certain areas is
2017.
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also likely to put increased pressure on the market. For the inner city, the market is going to remain
Areas such as Bankstown and the Canterbury Road subdued for now, similar to the second half of $2 million plus units in Cronulla are worth watching
corridor in particular have had high levels of unit 2017. We will see investor properties fail to reach as are high quality brand new or renovated dwellings
approvals in the last number of years with pockets the results of early 2017, however good quality in Cronulla and South Caringbah. Downsizers are
of oversupply issues likely to become a reality this properties and owner-occupier properties will likely prepared to pay $2 million plus for a high quality
year. Some developments in these areas are also still meet expectations. If further lending restrictions product within Cronulla and young families are
27Month in Review
February 2018
seeking brand new or high quality renovated cousins. This is highlighted by the median price settlement not meeting their off the plan prices
dwellings in areas such as Caringbah South. for a 3-bedroom house in Penrith being $600,000 when purchased during stronger market conditions,
(source: Domain). The level of investment and mostly in 2015 and 2016. Whilst mostly occurring for
Development changes in the Sutherland Shire
infrastructure planned for outer western Sydney overseas buyers, this could trigger a flow of sales
might come through which will impact house
will lay the foundation for solid demand for years to post settlement due to difficulties obtaining finance
prices with land area below 600 square metres
come. This includes the aptly named Aerotropolis and rental yields not meeting expectations thanks to
(already agents are seeing not as much developer
surrounding the second airport at Badgerys Creek, high investor participation. Losses on these property
interest in allotments below 600 square metres) as
the Sydney Science Park in Luddenham and the types are currently more likely to be realised if
Sutherland Shire Council may increase the minimum
continued expansion and development surrounding purchased and sold within a short period of time.
requirements for land size for a duplex site from 550
Parramatta.
to 600 square metres. Northern Sydney
Overall we feel the western Sydney market will A focus on the northern beaches suggests this
New units in large complexes should be treated with
continue to stabilise after a lengthy period of market will continue the trend seen in the later
caution as oversupply is possible in the Shire. There
sustained growth, with certain pockets continuing to stages of 2017, with stabilising values and extended
has been a large influx of new unit complexes being
see slight increases mostly due to new and proposed selling periods after a period of sustained capital
built particularly along the railway line from Jannali
infrastructure. In recent times selling periods have growth. Units in Manly performed strongly with 11.7%
through to Cronulla. We have recently started seeing
begun to lengthen, prices have become more stable growth in 2017 after 17.1% growth in 2016 (source:
developers offer incentives to purchasers such as
and auction clearance rates are dropping. This trend Pricefinder.com.au). Another popular and affordable
reduced or no stamp duty, gift cards and guaranteed
may continue until vendors realise that times have suburb, Dee Why, performed strongly with 10.3%
rental returns to name a few.
changed slightly and meet the market. Similar to growth in the unit market after 9% growth in 2016
Overall we expect the Sutherland Shire and St other parts of Sydney, possible speed bumps for (source: Pricefinder.com.au). Housing affordability
George areas to remain fairly stable (in the most the western Sydney market include potential RBA will remain a hot topic in 2018 as financial institutions
part) this year given that most of these suburbs are interest rate rises and stricter lending criteria by the tighten their lending policies and the recent capital
located within approximately 20 kilometres or less major banks. growth makes it difficult for buyers to enter the
of the CBD and are also a short drive to the local market, having a downward trend on demand levels.
Residential
Whilst the vast majority of western Sydney comprises
beaches and bays.
detached houses, the areas more at risk are new We consider suburbs surrounding the new $600
Western Sydney units, particularly units in areas with a high level of million Northern Beaches Hospital due to open in
Whilst predictions are for a period of low growth, recent or proposed supply and new areas offering October 2018 will defy this trend. The NSW State
western Sydney will still be in healthy demand as it high density units for the first time. We have Government has invested a significant amount
presents a more affordable option than its eastern noticed a number of valuations for new units on in the new hospital and infrastructure upgrades.
28Month in Review
February 2018
The Northern Beaches Council is in the process of The opening of the hospital will see renewed performs over the next couple of years. While there
finalising the Northern Beaches Hospital Precinct interest in the area and should the gazettal occur may be areas of oversupply, in general we would
Structure Plan. The plan involves the re-zoning as expected next year, the area will see an influx expect that any slight declines in value levels will be
of low density residential areas surrounding the of new development and housing styles relatively short lived and purchasing with a medium to long
hospital which will make way for a range of higher uncommon for the traditional 1960s style housing term view will reduce the risk in these situations.
density residential styles and commercial uses. that currently occupies the area. It will be interesting
Canberra
Medium density unit and townhouse developments, to see how the area adopts the new property types,
The Canberra residential market is complex with
commercial development (including a new town as the market shifts towards higher density living to
many factors interacting to affect demand, supply
centre, auxiliary medical and retail services) and help ease housing affordability and increase supply
and ultimately price. On a macro level, the Canberra
recreational areas will surround the immediate area levels.
residential market aided by historically low interest
and are planned for stage 1.
North Narrabeen and Narraweena have the lowest rates has a number of underlying positives including
median house prices at $1.54 million and $1.55 generally strong employment and a perception
million respectively (source: Realestate.com.au). The of good job security. There is depth in Canberra’s
suburbs comprise typical older 1960s and 1970s style residential market and it is seen as one of the
homes and offer value for individuals looking to enter strongest markets in Australia. A negative aspect
the housing market at an entry level. however is the limited population growth.
We anticipate that many markets across Sydney At a micro level the local ACT economy remains
will continue to perform steadily however other resilient in the face of continued job losses and
pockets may look different to what we have seen in Government cutbacks. Negative market sentiment
recent years. There will be more of a focus on quality though is a real risk in Canberra given the
property with a traditional long term view rather dependency on the public sector both for direct and
than buying for short term gains only. We would indirect employment.
recommend that anyone looking at new units be very
In general the housing market has experienced a
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selective in the type of product and development,
period of strengthening market activity over the past
existing and planned infrastructure nearby, privacy
12 months. Underpinned by low interest rates, limited
and access to sunlight and the amount of existing
new housing supply and the Mr Fluffy buy-back
and proposed unit supply as these are some of the
scheme, house prices have seen strong growth. The
factors which will likely determine how the property
Source: Northern Beaches Council development of Canberra’s light rail is also viewed
29Month in Review
February 2018
as a strong attraction for buyers to Canberra’s inner the Flemington Road corridor in Gungahlin and the Illawarra in the first three weeks of the year as
north suburbs and the Gungahlin district. the Belconnen Town Centre. There has also been reported on Realestate.com.au.
significant apartment growth in Molongolo Valley
Many suburb sales records were achieved throughout Of particular interest through the year will be the
and Tuggeranong Town Centre. We have seen some
2017 in the standard residential dwelling market. performance of Wollongong CBD units, the upper
value reduction in the unit market, generally in the
Notable sales include a property in Hunter Street, end of the market and sales of land and new homes
outer locations. Well located central developments in
Deakin for $5.75 million and a record sale in in new subdivisions throughout the region. Our
the city centre and in close proximity to town centres
Mclachlan Crescent, Weetangera for $1.551 million. prediction is that the overall market will cool as the
are less likely to experience value reductions. Overall,
There has been significant growth in established year progresses. Uncertainty in the Sydney market
minimal value growth is predicted in the unit market.
suburbs especially in the Woden Valley, inner north will flow down the coast and selling periods will
and inner south. We expect this trend to continue We anticipate 2018 will be a year of continued growth start to increase as the market turns into more of a
throughout 2018 in suburban areas of Weston Creek with demand shifting further away from the unit buyer’s market.
and Woden Valley and regions within close proximity market in most segments and towards new and
Southern Highlands
to the light rail network. established detached houses.
As we settle into the new year, the market
The Mr Fluffy Asbestos Removal Scheme is Illawarra fundamentals for the Southern Highlands remain
continuing with all land sales likely to be completed in We like to dust the crystal ball off each January and bright and strong. There are several new land
2018. Overall the resale of affected blocks was strong for 2018 it is looking particularly cloudy. 2017 ended releases throughout the region coming on line in the
in 2017 with the highest sales exceeding $2 million with initial signs of a slowdown in the residential first quarter of 2018 across the main townships of
in the inner south suburbs. As a result of these market, the first slowing signs for over three years. Bowral, Moss Vale and Mittagong, bringing ongoing
sales and zoning changes allowing dual occupancy Agents were reporting lower numbers to open increased construction activity and anticipated
development there will be streetscape changes homes, less demand from Sydney buyers and a lower retail spending. The most recent announcement by
to many established suburbs. 2018 will see this volume of transactions. Christmas and the new year the NSW Department of Planning and Environment
change continue and also the introduction of these have now come and gone and the big question is how in November 2017 of the rezoning of rural lands
completed developments into the market. will 2018 pan out. on the south end of the township of Moss Vale to
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provide up to 1500 new homes to be progressively
The number of new apartments coming onto the Initial signs are that there are still buyers in the
released brings both opportunities and civil, social
market has continued to build with more stock market with plenty of sales occurring so far in
infrastructure challenges.
expected during the start of 2018. The threat of January, including the upper end of the market
over-saturation is a very real one and continues to such as the recent beach front sale in Coledale for As mentioned in earlier versions of the Month in
be observed in several market segments including $2.04 million and 15 other sales over $1 million in Review, announcements over the past couple of
30Month in Review
February 2018
years by Federal and NSW Governments of Priority influencer Sydney at the beginning of a declining continue to improve as the mines continue to recover
Growth Areas in our region to provide an additional market and the new restrictions implemented on this year.
17,000 new dwellings, including Wilton Township, the banks regrading investment loans causing a
Further north in Port Stephens, other than the
and major infrastructure projects including Western decline in the number of investors, a group which has
Williamtown contamination zone which was expanded
Sydney Airport at Badgerys Creek, will have medium statistically been the largest number of buyers over
50% at the end of 2017, the market continues to
to long term accretive benefits for the Southern the recent growth period.
show signs that indicate that the Sydney influence
Highlands.
While we have recently seen record sales in a number may not be as strong.
Affordability relative to Sydney remains the of areas including Kotara South and Stockton, local
2018 will certainly be an interesting year for the
foundation for demand across the Southern agents are reporting fewer buyers in the market
Hunter. The Newcastle Jets are killing it, the Knights
Highlands. As mentioned in the last Month in Review which generally indicates the market is slowing.
are expected to climb off the bottom and much
for 2017, the northern villages and townships located
This may not be the case for long though. With like these local teams, the property market has
in the Wollondilly Shire have seen a big uptick in
reports of a resurging mining industry and Newcastle the potential to do very well, but could possibly
residential and commercial activity, with affordability
undergoing one of its biggest infrastructure disappoint.
and ease of access to the freeway a factor.
developments in recent history, there is an
NSW Mid North Coast
Generally across the Southern Highlands, the underlying feeling that the Hunter market may
This month we are looking at what’s in store for the
market up to $1.5 million remains liquid. Above buck the trend and continue the strong growth
2018 property market on the Mid North Coast.
this point there is a wide choice of property types experienced over the past few years.
available: prestige residential; rural and lifestyle; and Last month we reviewed 2017, which saw housing
There are certainly a large number of inner city
acreage properties, with purchasers tending to be prices in the Port Macquarie area increase
apartments being constructed which don’t seem to
discriminating in their purchasing decisions. throughout the year, although with a slight slowing in
be staying on the market for long and are fetching
growth towards the end of the year.
Newcastle anywhere between $600,000 and over the magic
So 2018 is upon us, the Ashes are run and won and million, which indicates we aren’t yet seeing an In 2018, we can see Port Macquarie and surroundings
Newcastle is alive with BBQs, beaches and business. oversupply and the inner city infrastructure push is continuing to grow into the new estates with a
Residential
The question is will that business be property certainly attracting buyers. continuation of blocks being released. These areas
business or has the market slowed? will mainly accommodate families moving into the
Out in the valley, Singleton and Cessnock are
area, local families upgrading to newer homes and
There is definitely more uncertainty and trepidation certainly not seeing the prices they were during the
first home buyers. We predict there will be a slowing
in the market for this year than there has been in the mining boom, but they have climbed off the floor
of houses with attached flats and the like which
past few, especially with Newcastle’s biggest market and there is an air of optimism that the market will
31Month in Review
February 2018
were popular in 2017 as the rental market weakens. the past two years and our optimism continues for the activity within Lismore City for 2018 although
We have recently seen a softening in rents in the the coming year, tempered with a more cautious superior quality product within the $400,000 to
larger towns and in Port Macquarie there has been approach for residential investors in our region. $600,000 has improved markedly of late and will
an increase in rental vacancies mainly due to the likely have the same amount of interest well into
NSW North Coast
increased construction activity bringing additional 2018, assuming current interest rates level remain
Lismore / Casino / Kyogle
dwellings onto the market. The weakening rental low.
The residential market for the year ahead in the
market and tightening of lending policies to investors
Lismore area is expected to stabilise following the Casino and Kyogle houses in the $200,000 to
is likely to see less investors in the market in 2018.
last three months of 2017 where the demand for $300,000 price range will still appeal to first home
There are a number of centrally located higher good quality residential stock was heightened due owners as they are very affordable at the current
density developments underway but a lack of pre- to the lack of available stock and real estate agents interest rate level.
sales has seen construction stall and it is unlikely were desperately seeking new listings. Richmond
The most affordable property type will continue to
they will be completed in 2018. and Kyogle Shires are expected to remain relatively
be older stock of the typical circa 1970s and 1980s
steady.
The other coastal towns and villages all along the 2-bedroom brick and tile units of which little sold
Mid North Coast are also experiencing good demand A key factor that could potentially influence house in 2017. This is likely to continue throughout 2018,
for land and modern dwellings at present, but it is prices is the much touted beginning of projected however at price levels of $125,000 to $175,000
expected to stabilise somewhat over the coming interest rate increases towards the end of 2018. depending on whether they are renovated or not,
months with a significant amount of vacant land However, if the availability of real stock remains they generate a reasonable rent return in areas
and recently completed dwellings coming online and limited, then demand may well remain strong despite close to the CBD and major educational facilities
available for sale. This expanding market may not any interest rate increases. such as Southern Cross University. Good buying
be sustainable over the long term in these smaller opportunities may present themselves, providing
Whilst not at the same demand level as residential,
coastal towns and may result in an oversupply of the body corporate fees are kept in check and to a
the rural residential real estate market is likely to
dwellings and land if demand was to lessen during minimum.
remain steady this year, with the possible exception
2018.
of increases for the more well presented properties We expect the larger rural lifestyle and rural
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The higher value, prestige properties and rural with highly valued features such as expansive residential property market in Lismore, Kyogle and
residential property markets in the region remain views, creek or river frontage and high quality Richmond Valley to be subject to the vagaries of
slow but steady, with slow demand combining to improvements. distance and accessibility as well as maintenance
produce slowly increasing values. of the land as determinants in the type of buyer.
Generally, properties within the $250,000 to
However, there is a continuing trend of real estate
We have been quite optimistic for the region over $350,000 price bracket are likely to see most of
32Month in Review
February 2018
agents outside of the general area, such as Byron Lennox Head and Skennars Head localities will likely same desirable features that Byron Bay offers, such
Bay based agents, bringing in potential buyers to place a cap on any significant increases in value as beaches and restaurants.
the outer limit of the Lismore City Council area and in the short to medium term in these locations.
During 2017, Lennox Head saw a number of long
achieving improved sale prices for well presented If market conditions soften, this may result in an
term Byron Bay residents sell in Byron to purchase in
rural residential properties. As the more traditional oversupply of land in these locations.
Lennox because of its village atmosphere compared
sought after areas have become increasingly
During the end quarter of 2017, the market within to that of the changing pace of Byron Bay. If that sort
expensive, these outlying areas of the Lismore City
Byron Bay remained strong with limited supply and of money continues to come from Byron Bay and
area become attractive.
strong demand from interstate buyers. Towards the interstate purchases as well, Lennox Head remains in
In summary, we expect the residential property very end of the year (close to Christmas) however, a strong position for price growth.
market for Lismore, Richmond Valley and Kyogle there were signs of the prestige market slowing with
It would seem that Byron Bay has become nearly
Council areas for 2018 to stabilise overall with agents advising limited new enquiry over the $1.8
unaffordable for everyday purchasers looking to buy
some assurance of stability. Whilst unlikely to see million mark.
a home for a principal place of residence, especially
major growth, quiet confidence should remain
Moving into 2018, things have remained somewhat within walking distance to town, unless they have
while couched in the hope that a low interest rate
steady with little change. This however, could be come from some sort of generational wealth or a
environment remains, even if there are modest rises
purely a sign of people holidaying in the northern strong interstate income based job.
in bank lending rates.
NSW region without the thought of buying or
Mullumbimby has seen massive growth over the past
Ballina /Byron securing a property. Moving into February as people
two years on the back of the strong prices being
After strong increases in value throughout 2017 filter back to work, we should have a good indication
achieved in Byron Bay and the neighbouring suburb
across the majority of areas within the Ballina and of whether the market will continue to steady as
of Brunswick Heads. Given its inland locality five to
Byron Shires, value levels appear to have somewhat agents indicated close to Christmas or continue to
ten kilometres from the coast, it remains an area
stabilised, however extremely low stock levels across surge ahead as was the case for the majority of 2017.
of concern that average value levels of $900,000
most market segments may result in some further
The coastal town of Lennox Head is expected to plus may not be able to be sustained if the market
increases in value in the short to medium term.
remain a place of interest during 2018 across all price changes direction. If the Brunswick Heads and
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Demand within the highly sought after areas of the
points and property types. As the coastal resort Byron Bay markets have some form of correction,
Byron Shire appears to have slowed off the back of
town of Byron Bay saw a big increase during 2017 purchasers may look back to the coastal areas which
slowing Sydney and Melbourne markets, however
from interstate buyers, investors and occupiers alike, could see values fall in Mullumbimby.
again stock levels remain low. The amount of vacant
people are looking to Lennox Head as an alternative
residential land scheduled for release within the
with a more affordable price point with many of the
33Month in Review
February 2018
Job stability and low interest rates remain key to Coffs Harbour shot in the arm by way of the completion of the
all of these markets in 2018. Should either of these 2017 realised significant growth throughout most Pacific Highway upgrade, considerably reducing
market forces be impacted, we could see markets in market sectors due to increased demand and commuting time to the nearest major town of Coffs
these coastal resort towns cool. diminishing supply fuelled by continuing low interest Harbour. Average prices range between $250,000
rates, a strong rental market and infrastructure and $450,000 in these localities which offer good
The Clarence Valley
upgrades. lifestyle benefits within small town communities.
The Clarence, in particular Grafton, Maclean and
Yamba, is looking set to perform positively in 2018, 2018 has forecasters predicting interest rate rises The rural residential market has also recorded
however, we may see some stabilisation in capital which are expected to be moderate off the back considerable increases in values, typically for well
growth and sales volumes. of recent record low levels. January as always has located properties close to Coffs Harbour in areas
started slowly however initial feedback from local such as Boambee, Bonville, Karangi, Moonee Beach,
Vacant land looks set to be in high demand with
selling agents indicates good levels of demand, Emerald Beach, Upper Orara and Bucca and typically
residential land lots across the area continuing to
however there is a feeling that the phone is not within the $600,000 to $1 million price range. It
be taken up by owner occupiers and investors alike.
ringing as often as it was. There is still a lack supply should be noted that in our experience with this
Similarly, properties with the capacity for good rental
in many market sectors which will continue to prop rural residential market, it is the last market sector
returns will continue to be popular with rental price
up the high value levels being achieved. to increase and the first to decrease when market
increases across the market due to the continuing
conditions decline.
Pacific Highway upgrade. The one location where prices still appear cheap
for a beach side property is Sandy Beach were you Vacant land has become scarce which has seen
New product (i.e. new dwellings and house and land
can purchase an esplanade position (opposite the significant increases in land values and this coupled
packages), often with premiums being paid for new
beach reserve) starting at $575,000 to $700,000. with normal building cost increase is seeing
quality in peaking markets, should be treated with
This locality is traditionally considered a lower premiums paid for new homes. Typically new
caution as any market softening conditions is likely
socio-economic area with little infrastructure, homes are at their peak of value upon completion
to affect this segment of the market first if any
however a large 200 lot development is planned and usually require upward market movement to
oversupply or over-capitalisation occurs.
for the area and this coupled with good access and maintain their value as the property ages.
Residential
Overall looking forward, the market looks to remain increased services offered in the nearby township of
Sales evidence within new estates such as Sapphire
steady with slight possible increases if market Woolgoolga, six kilometres to the north, make this a
Beach Estate, Mariner Cove (Safety Beach), North
conditions continue with the upward trajectory suburb to watch.
Sandy Beach Woopi Beach Estate and Seacrest
recorded in 2017.
To the south of Coffs Harbour the townships of Estate reflect premiums being achieved for new
Macksville and Nambucca Heads have received a homes above cost, however should market sentiment
34Month in Review
February 2018
and conditions soften over 2018 and supply of We caution that this is a more volatile market with new housing stock in Thurgoona, Lavington,
spec homes increase, we may see these premiums with the most likely buyer being a high net wealth Hamilton Valley and Springdale Heights. Out of
deteriorate. individual, these buyers being limited in the local town investment in this new housing market cooled
market and dependent on greater economic market somewhat in 2017—we think this trend will likely
In summary, we do not see any major correction in
conditions at the time of sale. continue in 2018. Investors and banks will be training
the market in the short to medium term, although
a watchful eye on any softening in rental returns and
there is a sense we are at the top of the wave and Albury / Wodonga
the cost to build, which increased as did vacant land
waiting for it to break. Any lift in interest rates would The Albury property market is in good shape as it
allotment prices. We think residential land may not
only add to this expectation and may see consumer enters 2018. Since 2013 the market as a whole has
run as hard in 2018 due to supply and the inability of
confidence waver. been on a gentle incline, however it is difficult to
market evidence to support higher values from the
discuss the market as a whole in Albury as there
It is reported that banks are clamping down on higher land, as well as the build dilemma when it does not
are many different housing stock options and sub-
risk loans with reduction in interest only lending and add up for the customer. The more established areas,
markets to consider. Regional Australia is poised to
higher deposits required for investors in line with with stock ranging from mid-1980s to mid-2000s will
continue capitalising on the housing affordability
regulatory recommendations. These restrictions may continue to hold or slightly increase in value, with
crisis in Sydney and Melbourne. Progressive regional
limit some potential investors’ options and soften location and presentation factors maximising sale
cities such as Albury-Wodonga have been investing
investor demand. prices.
in infrastructure and development, securing an
It is no surprise that it is the affordable end of the advantageous position for 2018. As a border town, East Albury is a very popular suburb; the stock in old
market sector (sub $600,000) that will experience the achievements of one side of the border benefit East Albury will continue to achieve similar results as
the most activity with prices remaining strong and both cities, and both Albury and Wodonga have had its counterparts in highly sought after Forest Hill and
shortened selling periods. The prestige market has major projects completed in 2017: Albury with the Monument Hill. Many will opt to buy and undertake
seen increased sales activity for residential product Regional Cancer Centre, two new child care centres, extensive renovations to attain a property within
over $1 million within the greater Coffs Harbour a public fitness station at River Park, upgrade to walking distance of the CBD. Over the hill in new
locality, although property over $1.5 million is Murray High School in Lavington and the near- East Albury, proximity to the hospital, IGA, Lauren
still thinly traded with limited sales and extended complete relocation of Bunnings and Total Tools Jackson Sports Centre and Bunnings will continue to
Residential
selling periods generally expected. Local agents are to much larger sites near the existing homemaker attract interest for home owners and investors alike.
reporting the majority of this activity is from out centre in East Albury. In the middle to the north, the cheap seats of East
of town purchasers coming from the metropolitan Albury are already being discovered as good buying
From new to old, Albury is alive with activity. New
areas, who were notably missing from the market for townhouse development.
land releases were a feature of 2017; to that end we
over the GFC period.
expect the influx of dwelling construction to continue
35Month in Review
February 2018
Albury often impresses property seekers (locals and expected to be delayed and 2018 is not expected to Last year, our suburbs to watch were the emerging
newcomers) most with its tree-lined streets, showing see a fall in prices until perhaps very late. suburbs of Calala and North Tamworth as they
off beautiful character dwellings a stone’s throw from provided the opportunity for well priced new
Positive employment conditions in the area,
the CBD, Botanic Gardens and Murray River. Central construction, enticing both first home owners and
continued affordability, a weekly spending pledge
Albury is the strongest sub-market in this regional upgraders alike. This year, with the introduction of
from the local member, lifestyle and aged care
city; agents’ overuse of terms such as “sought the stamp duty exemption for first home buyers we
options mean the economic fundamentals are good
after” and “tightly held” in this area, along with high expect this trend of construction to slow slightly and
for 2018 and a soft landing late in the year is a worst
demand and rising princes, leave one wondering just that the houses that will be built to be of a slightly
case scenario.
how much steam this sub-market has left in 2018. higher value than in previous years at around
There has been solid investment in renovation and The construction of new houses is expected to $400,000 plus. This expected shift will mean that
extension of these character dwellings and the area continue in suburbs such as Kelso, Llanarth and the established parts of North Tamworth and the
may have been undervalued a few years ago. It will Windradyne. Recent land releases by the local suburbs of East and West Tamworth will be the
be an interesting area to watch this year, with many government have been popular and will continue to suburbs to keep an eye on. As competition increases
consumers priced out and heading north or south to be so for developers and land bankers. for the lower end of these suburbs ($300,000 to
acquire proximity and character at a more affordable $450,000), we expect values to be driven up by this
The median house price will increase towards
rate. competition.
the $500,000 mark as the number of residential
Overall, the Albury property market reflects the properties sold above this figure increases. The suburbs of South Tamworth, Hillvue, Oxley Vale
depth and breadth of the region; we have a broad and Westdale all offer affordable housing without
Tamworth
and diverse employment base, the Murray River having to sacrifice a good neighbourhood. While
The Tamworth market is expected to continue its
and Lake Hume at our doorstep, mountains, rivers patches of these suburbs have historically been more
steady growth throughout the different segments
and wineries and heritage surrounding. It is a great aimed at investors, this is slowly changing to include
in 2018. With the continuing low interest rates it
place to live and work with a variety of housing stock owner occupiers.
is expected that interest from owner occupiers
and an affordability which means turnover of stock.
and investors alike will remain strong. The overall The area of West Tamworth known as Coledale
Choosing a house to suit a purpose at any life stage is
Residential
cost of property in Tamworth compared to larger continues to provide reason for concern with an
achievable for many.
metro areas continues to attract those looking for a increase in new development located in a non-
Bathurst / Orange lifestyle change from the cities as well as investors desirable location with much of the new and
Property values increased in 2017, although the start looking to capitalise on the good rental yields and surrounding development consisting of housing
of the increase was a delayed kick-off in comparison low costs. Tamworth continues to grow in all sectors commission. While high rental yields can be achieved,
to metropolitan areas. Likewise, the slowdown is with strong agricultural, industrial, commercial and the risk of damage to property is high and the
professional sectors providing good opportunities for potential for capital growth is limited.
employment.
36Month in Review
February 2018
Victoria
Melbourne concerns remain around off the plan apartment of new developments scheduled to be released
This year is set to be another busy one for purchases. throughout the year to satisfy demand for more
Melbourne’s residential property market, which is affordable housing options. We expect a continued
Inner Suburbs
expected to remain generally stable across most and stable price growth throughout 2018.
We expect the inner suburban ring property market
market segments. While we expect to see some
to stabilise throughout 2018 in suburbs such as Port The outer northern suburb of Mernda, located
market softening, there will be some suburbs still
Melbourne, South Melbourne and South Yarra. We approximately 27 kilometres north-east of
experiencing median price growth, albeit at a slower
expect Melbourne’s inner city apartment sector to Melbourne’s CBD will continue to be worth watching
pace than previous years. Population growth in
flatten and potentially face a slight decline due to the in 2018. According to REIV, median house prices in
Melbourne is expected to continue to be a major
wave of off the plan apartment complexes coming Mernda have increased by 31% in the past two years,
driving factor, with Melbourne set to overtake Sydney
to completion in the early part of 2018, as there are with a median of $590,000 in the December quarter.
as the nation’s biggest city by 2036 if the current
concerns that supply will outstrip demand in some We expect to see further growth and development of
trends continue. In the 2016-2017 financial year,
areas. Mernda and surrounding suburbs, due in part to their
Melbourne’s population grew by 126,175 people and
increased accessibility as a result of the railway line
for the 15th consecutive year, showed the largest The price gap between housing and apartment
extension.
growth rate for an Australian capital city (source: markets is expected to become increasingly larger,
Australian Bureau of Statistics). with many younger first home buyers looking to the We have also seen a steady increase in median house
apartment market as a more affordable option. prices in developing suburbs, such as Mickleham with
Residential estates in the outer suburbs (25 plus
a 40% increase from the December quarter of 2016
kilometres from Melbourne’s Central Business High rise apartments should be treated with caution,
(REIV), and we expect these suburbs to keep a steady
District) in the north, south-east and west are as the off the plan apartment market seems to be
growing pace throughout this calendar year. While
continuing to expand, with house and land packages heavily reliant on a strong interstate or overseas
infrastructure within these suburbs is still developing,
remaining a popular choice for first home buyers purchaser and prices are heavily driven by these
they are located within close proximity of established
and families. In the middle ring suburbs located purchasers.
residential suburbs such as Craigieburn, providing
within 10 to 25 kilometres of the CBD, such as Keilor
Northern Suburbs residents with a compromise between convenience
East, Preston, Box Hill, Clayton and Bentleigh, we
Residential
The outer northern suburbs are viewed as a relatively and affordability.
are seeing redevelopment of older dwellings on
affordable option for owner occupiers and renters
large sites into multiple townhouses and small scale Melbourne’s middle and inner northern suburbs
alike. These suburbs have experienced steady price
apartment complexes. In the inner city, apartment have remained strong throughout 2017, experiencing
growth over the past 18 months for detached houses,
buildings are in various stages of completion and a slower growth rate compared to the outer ring,
townhouses and vacant land. There are a number
37Month in Review
February 2018
but greater capital gains. For the past two years, We will be observing the performance of developing the privacy and open space they seek for their new
price growth has led to high vendor expectations suburbs such as Clyde North, Cranbourne East and families.
which may be moderated in 2018. We believe that Officer over the coming year as new land releases
The middle east Melbourne suburbs of Ringwood,
new legislation around foreign investment as well and subdivision projects become available on the
Heathmont and Mitcham have exhausted their
as tighter lending policies introduced in July 2017 property market.
supplies of potential redevelopment sites and are
have led to lower clearance rates, especially for
We expect there to be steady activity and growth approaching values of over $1 million. Locations such
the apartment market, which may put downward
within the inner south-eastern suburbs. These as Nunawading and Blackburn appear to have an
pressure on prices in 2018. As a result, vendors
suburbs performed well in the past and are expected oversupply of apartments situated close to railway
may see extended marketing periods, especially for
to continue to grow in 2018. Throughout 2017 we stations and other forms of public transport.
secondary stock.
saw a continuing trend of redevelopment. The outer
Throughout 2018, we predict that the proposed
South Eastern Suburbs bay side suburbs of Melbourne such as Chelsea,
development of the old Lilydale Quarry and the David
As with the outer northern suburbs, new land Carrum and Seaford are popular areas for investors
Mitchell Estate will progress steadily through the
estates in the outer south-east experienced high and developers to look for the property that has
planning and implementation stages. The property
price growth and strong demand throughout 2017. potential to be subdivided and redeveloped. This sub
located on the corner of Hull Road and Melba
Our expectation for 2018 is that these estates will market appeals to potential buyers due to its bay
Avenue is proposed to include a multi-lot subdivision
continue to be in strong demand, however price side location, proximity to amenities and competitive
(approximately 200 lots), releasing a new range of
growth is likely to be at a much slower rate. These price.
available properties varying from vacant land to
markets are quite sensitive to any changes in
North Eastern Suburbs townhouses, with allotment sizes varying from less
economic conditions and should interest rates rise
Outer suburbs such as Bayswater, Kilsyth and than 400 square metres to over 600 square metres
or economic conditions decline, it is likely to slow the
Mooroolbark are continuing to supply affordable upon completion.
market considerably.
living for first home owners whilst being accessible
Western Suburbs
Pakenham will be one of the suburbs to watch to necessary amenities. These suburbs are either
The inner north-western apartment market should
in 2018. Pakenham is located approximately 56 supplying new townhouses on smaller allotments
be treated with caution due to the large amount of
Residential
kilometres south-east of the Melbourne CBD within or older weatherboard and brick veneer homes
supply coming on stream, particularly in the suburbs
the Cardinia Local Government Area. According to that younger generations seek to improve through
of North Melbourne, West Melbourne, Travancore
the REIV, median house prices in Pakenham have gentrification. Furthermore, dual occupancies with
and Parkville. This concern may be contributing to
increased by 27% over the past year and reached a 400 square metre blocks appear to be particularly
softening values. While Parkville had unit capital
median of $520,000 in the December 2017 quarter. desirable to the younger generation as it provides
38Month in Review
February 2018
growth of 1.5%, there was negative capital growth in Echuca We consider the sweet spot of the market will again
unit prices in North Melbourne of 0.7% (REIV). We Building demand and tight supply continue to be renovated period properties in good locations.
will be watching the performance of this sub market dominate the conversation at a local level with most These locations include Ballarat Central, Lake
over the coming year as more supply is released on local and bulk builders busy. This is consistent with Wendouree, Soldiers Hill and even Buninyong.
to the market. continued gains in almost all market segments The main driver of growth will be the demand for
from the mortgage belt through to the higher end. properties in these suburbs due to their location,
The middle ring western suburbs of Albion and
Reasonable conditions in the rural sector will likely street scapes and access to infrastructure such as
Ardeer will be interesting to watch in 2018. In 2017,
feed through to general buoyancy in the local the train station, Lake Wendouree, Parkland and the
median prices for a 4-bedroom house increased by
economy and coupled with the construction of the Ballarat CBD.
almost 27% to $658,750 and by 32% to $595,000
second bridge, is likely to result in ongoing buoyant
respectively (REIV). Although less popular than the The new green field estate properties will again
conditions for 2018.
neighbouring suburbs of Sunshine and Sunshine generally feel pressure to maintain their values due
North, the proximity to the city, relatively low median Ballarat to ongoing over supply issues. Two estates which we
price and local amenities make these suburbs ones to Happy new year to all our valued customers. feel could buck the trend will be Insignia and the new
watch in 2018. section of Lucas, known as Lucas Platinum. These
The sun is blazing, the grass is yellow, the pubs are
estates border already established and well regarded
The outer western suburbs of Kurunjang, Melton, busy on school nights, many cafés are closed and
areas and most importantly the supply of the land
Wyndham Vale, Werribee and Tarneit all ranked in the many people are away with sand between their toes.
within the estates is finite.
REIV’s most affordable suburbs in December 2017. It must be January in Ballarat.
As with previous years, affordability will be a driving Suburbs that seem affordable at present include
As the Sturt Street set slink reluctantly back to their
factor of demand in the outer western suburbs as Ballarat East, Golden Point and to a lesser extent
desks, we are to give our predictions of what will
Melbourne’s investors and owner-occupiers continue Black Hill. We consider there to be a significant
happen in the Ballarat bricks and mortar game this
to grapple with affordability and shortage of supply. chance of positive price movement in these areas
year.
These suburbs are dominated by first home buyers due to gentrification and an increase in the capacity
and families looking for larger living space and Although unspectacular, our general prediction for and speed of the train to Melbourne.
Residential
amenities close by. We expect this rapid growth to the Ballarat residential property market is that it will
We would advise buyers considering off the plan
continue in 2018 with demand remaining high and a continue to hasten slowly. The strong underlying
investment properties in most areas to use the
number of new estates to come onto the market with economic fundamentals of the area are such that any
utmost caution. Experience has shown us these often
land pre sales. downturn or deflation would be extremely surprising.
promise much but deliver little.
39Month in Review
February 2018
Mildura homeowner grants from state government. Prices in consequently require substantial energy to cool
The Mildura market played out as expected in Irymple and Gol Gol are similar to Mildura, however in summer. Builders and home owners need to be
2017, ticking along steadily, with modest growth the average lot size tends to be bigger, which is better educated to look at more than just whether a
in particular for family homes in the $300,000 to attractive to many buyers. home achieves a 6 star energy rating.
$550,000 price bracket.
The rental market is expected to continue to be SHEPPARTON
We expect 2018 will see a continuation of this trend. reasonably evenly balanced and rental growth is The Shepparton property market (including
The Sunraysia region is currently benefiting from likely to be modest. Mooroopna and Kialla) has had a ten year median
some significant investment in local horticultural price increase of just 1% (CoreLogic). Yet the region
There are number of initiatives currently being
industries, resulting in higher employment and has seen increased sales volumes with overall
proposed by Mildura Council, including the Mildura
stronger business activity. The strongest demand average days on market falling. Local agents have
South Sporting Precinct, Mildura Motorsports
is likely to continue to be for good standard family reported increased activity from all buyer types, with
and Community Precinct and stage two of the
homes in town and also for rural residential a noticeable increase in interest from metropolitan
Mildura Riverfront redevelopment. These are big
properties with plenty of room for larger sheds investors being attracted to the higher yields that the
projects, reliant on funding from state and federal
or swimming pools. These larger properties are area offers. Mooroopna is starting to see an increase
governments. While it is unlikely that the first two
predominantly between 2,000 and 5,000 square in the $350,000 plus market, which is considered to
projects will commence in the short term, it is hoped
metres in size and located within a 10 kilometre be ‘top of the market’, while good quality established
that at least one may come to fruition in the next
radius of Mildura. stock in Shepparton and Kialla above $450,000 is
few years. These projects have the potential to drive
becoming more fluid. Generally, new constructions
There are a number of traditional residential tourism growth and have been eagerly anticipated
with basic upgrades (cooling, appliances, benchtops
subdivisions currently underway in Mildura and we for some time.
etc.) are in line with market parameters, however
expect that demand will remain firm for serviced
Finally, as Mildura endures a scorching week of high overcapitalised builds are becoming more common.
lots. Vacant building blocks in Mildura are expected
temperatures, we expect buyers to continue to look
to continue to increase in value as developers try to Residential vacancy rates are sitting around 1.5%
more closely at the energy efficiency of homes.
recoup ever increasing subdivision costs. with approximately one third of the Shepparton
One of the weaknesses of the current state-based
Residential
population being renters. Investment yields in the
The release of land in some recently completed energy rating scheme is that it does not differentiate
area are hovering around the 6%, however it’s not
subdivisions in the outlying towns of Irymple and between winter heating and summer cooling,
unusual to find properties with tenants in place being
Gol Gol will help to satisfy demand from families and so we occasionally still see houses being built in
sold with yields of above 7%. Hence the increased
first home buyers able to avail themselves of first Mildura which are more suited to a cool climate and
investor activity.
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