Budget 2017 – Property Impact White Paper

The Federal Budget 2017 was announced on Tuesday 9th May, with Treasurer Scott Morrison estimating the real growth in the Australian economy will rebound to 3% over the next two years and that the budget will reach a surplus of $7.4bn by 2020-21. Wage growth is also expected to increase from 2% to above 3% over the next four years.

The Budget 2017 addressed a multitude of issues including, but not limited to: infrastructure, banking levy, foreign investment, housing affordability, company tax cuts and small business incentives, changes to the medicare levy, and others.

For our business we need to be aware of measures which have a direct and indirect impact on the property market, as well as measures that will have an impact on business.

For a full analysis of the Federal Budget 2017 click here.

Kind Regards,
Dr Diaswati (Asti) Mardiasmo

National Research Manager
PRDnationwide

Tweed Market Value Ripe for First-Home Buyers and Investors

Despite a lot of chatter about housing bubbles and soaring property prices in Australia, there are still pockets of great real estate value and opportunity to be found in our spectacular coastal region.

The Tweed Heads area – taking in areas such as Tweed Heads West, Tweed Heads South, Bilambil, Terranora and of course Tweed Heads itself – is shaping as a market that is attractive to first home buyers and investors.

Data from PRDNationwide Research shows median house and unit prices in the Tweed are significantly lower than those just across the border in the Gold Coast City Region.

While a unit on the Gold Coast will set you back around $400,000, apartment living in the Tweed Heads area comes in at around $350,000.

On the housing front, the median price north of the border is $610,000 while in the Tweed it’s $536,500.

It’s a considerable difference, especially for first-time buyers who can get on the property ladder while still enjoying the fantastic lifestyle, beaches and weather that bring so many people to the Gold Coast.

And purchasers are catching on, with average days on the market declining and the tightening of vendor discounting suggesting that competition is growing.

This comparative value and the consistently high demand for rentals across the Tweed area are appealing to local and out-of-town investors also.

Our research shows that Tweed rental properties are spending less time vacant and are attracting strong yields – 5.2 per cent for units and 5 per cent for houses – slightly higher than Gold Coast yields, and far better than anything a bank can currently offer.

This along with the area’s wafer-thin rental vacancy rate of 0.6 per cent and very limited supply of new dwellings, adds up to a healthy investment environment for investors.

 

Jason Abbott – Principal
PRDnationwide Coolangatta/Tweed

Top 10 Affordable Major Regional Areas

A new report from our PRDnationwide Research Team has shown that out-of-the box thinking has led to housing and growth options beyond the major capital markets as well as increasingly unaffordable metro regional markets.

To assist those seeking to find an affordable property, the report highlights regional areas across Queensland, Victoria and New South Wales. These key areas identified, not only highlight price affordability but also solid fundamentals for sustainable growth.

PRDnationwide’s Top 10 Affordable Major Regional Areas Report just released covers the regions along the East Coast of Australia. The Top 10 Affordable Major Regional Areas have experienced high growth rates over the past 15 years.

In Queensland Toowoomba, Fraser Coast, and Ipswich were nominated. Over the past 15 years, to 2016, Toowoomba has averaged a 7.9% growth for houses and 8.4% for units, Fraser Coast averaged an annual growth rate of 7.2% for houses and 8.8% for units and Ipswich experienced an average annual growth rate of 9.8% for houses and 9.5% for units.

In New South Wales Tamworth, Maitland, Wagga Wagga, and City of Shoalhaven were nominated. Tamworth averaged an annual growth rate of 6.6% for houses and 5.8% for units, Maitland has seen an average annual growth of 7.4% for houses and 6.1% for units, City of Shoalhaven averaged an annual growth of 5.9% for house and 5.4% for units and Wagga Wagga has seen respective annual growth levels of 6.3% for houses and 5.8% for units over the past 15 years to 2016.

Ballarat, Greater Bendigo, and Shepparton in Victoria have also experienced high growth rates over the past 15 years to 2016. Ballarat has experienced an average annual growth rate of 6.5% for houses and 4.6% for units, Greater Bendigo averaged an annual growth rate of 6.8% for houses and 5.1% for units, and Shepparton had an average annual growth of 5.0% for houses and 3.2% for units.

The PRDnationwide Top 10 Affordable Major Regional Areas have experienced high growth rates over the past 15 years. It also identifies affordable regions that assist in the battle to enter the property market and combat the capital cities and metro regional markets that continue to see property price growth and inflation levels beyond the standard wage increase.

Download Top 10 Affordable Major Regional Areas Report

Source:  Tony Brasier, Chairman and Managing Director – PRDnationwide

 

Jason Abbott, Principal – PRDnationwide Coolangatta/Tweed

 

Strong Demand Outstripping our Meagre Supply Pipeline

While the property market on the Tweed and southern Gold Coast is the best I’ve seen it in eight years, the limited supply of new houses and apartments across the region looks unlikely to change any time soon.

The latest data from PRDNationwide Research reveals that there are only a few residential projects on the development horizon for the Tweed region in the short to medium term, as strong demand puts upward pressure on prices and the rental market tightens.

PRDNationwide’s development map for the Tweed Shire Region shows just there’s just four apartment or townhouse projects that are either under way or scheduled to start in 2017.

The most significant of these are the Fraser Cove Villas with 45 townhouses and a nine-storey apartment building comprising of 40 units earmarked for Florence Street in the Tweed Heads CBD.

Both projects are expected to start mid-year with completion due in late 2018 or early 2019.

On the housing front, the massive Cobaki and Kings Forest residential communities are still at the planning phase and any other new residential land that comes to the market is selling very quickly after its release.

Just over the border, we have The Iconic luxury apartment tower (98 units) under construction at Kirra and a proposal for the 29-level Hotel Komune that will incorporate 94 apartments overlooking Greenmount Beach.

The Iconic is reportedly close to a sell-out and the Greenmount tower is some time away and being beachfront, is more likely to be a luxury product, so there’s very little joy out there for the so-called ‘mum and dad’ investors looking for new apartments.

On the flipside, it’s pretty safe to say that this market is in no imminent danger of a housing or apartment glut.

 

 

Jason Abbott – PRDnationwide Coolangatta/Tweed