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Second Quarter │2013

COOLANGATTA AREA Property WatchÂŽ

COOLANGATTA AREA MARKET OVERVIEW The following Property Watch report is the result of an investigation into the historic and current market trends of the Coolangatta Area, which encompasses the suburbs of Banora Point, Bilambil Heights, Bilinga, Coolangatta, Terranora, Tugun, Tweed Heads and Tweed Heads West. The Coolangatta Area property market has begun to regain some traction, with sales numbers up amongst both the house and unit markets in the six months to March 2013. The house market recorded a total 240 transactions for the March 2013 half year period, translating to a 15 per cent increase in sales activity from the six month period ending September 2012. The median house price has continued its steady softening to those levels seen prior to 2007, recording a median house price of $420,000 for the March 2013 half year period. This represents a three per cent decline from the September 2012 half year period and a two per cent decline on the corresponding period 12 months earlier.

MARKET INDICATORS

Change from Last

Year

Half Year

HOUSE SALES HOUSE MEDIAN HOUSE RENTS UNIT SALES UNIT MEDIAN

Observing the House Price Points chart, it can be seen that the higher end of the market ($600,000 plus) has seen some contraction, accounting for 14 per cent of sales during the March 2013 half year period, down three per cent on the corresponding period 12 months earlier. Conversely, the lower end of the market (under $400,000) accounted for a total 44 per cent of total transactions, up nine per cent on the same period 12 months before. This increase in transactions in the lower end of the market has contributed to the declining median price, and is reflective of a market that is heavily price driven. Market evidence suggests that properties which are priced correctly are selling far more quickly than those properties priced above the market, which then have to undergo several reductions. With this increased affordability in the market, stock is becoming tighter as buyers take advantage of all time low mortgage rates, leading to less and less property on the market. This is highlighted by a reported auction clearance rate of approximately 60 per cent by PRD Coolangatta agents, with those not selling at auction selling in the subsequent weeks.

COOLANGATTA AREA HOUSE SALES CYCLE 600

$600,000

Number of sales

UNIT RENTS

Median 503

500

LAND SALES

$500,000

480

479

Number of sales

The indicators depicted above are based on the year ending March 2013, including rental indicators which reflect quarterly data up to March 2013.

397

400

$400,000

367

366

348

346

345 317

294

288

300

289

$300,000 238

237 215

240

237

224

208

204

200

$200,000

100

$100,000

2012 SEP

2013 MAR

2011 SEP

2012 MAR

2010 SEP

2011 MAR

2009 SEP

2010 MAR

2008 SEP

2009 MAR

2007 SEP

2008 MAR

2006 SEP

2007 MAR

2005 SEP

2006 MAR

2004 SEP

2005 MAR

2003 SEP

2004 MAR

$0

2003 MAR

0

Median sale price

$420,000

LAND MEDIAN

Half year period

Prepared by PRDnationwide Research. Source: PDS

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HOUSE PRICE POINTS 2011 MAR

2011 SEP

2012 MAR

2012 SEP

2013 MAR

18%

14%

17%

16%

14%

Price points

At least $600,000 $550,000 to $599,999

8%

4%

6%

$500,000 to $549,999

13%

9%

9%

$450,000 to $499,999

20%

$400,000 to $449,999

20%

21%

$350,000 to $399,999

11%

$300,000 to $349,999

5%

Less than $300,000

22%

24%

0%

10%

20%

23%

12%

4%

20%

14%

21%

11%

3%

8%

19%

20%

6%

6%

9%

11%

21%

4%

4%

COOLANGATTA AREA UNIT SALES CYCLE

13%

5%

40%

The unit market registered a total 325 transactions for the March 2013 half year period, resulting in a nine per cent increase from the previous six month period to September 2012. The median unit price has seen some improvement in the six months to March 2013, finishing the half year period with a median price of $347,000. This represents a two per cent improvement on the previous September 2012 six month period, although is four per cent down on the previous March 2012 half year period. Again, in a price driven market where price is a key purchasing factor, those properties which are priced competitively in the market are selling well.

900

8%

60%

80%

800

100%

$450,000

Number of sales Median

796

Percentage of total sales

$400,000 732 $347,000

684

700

$350,000

600

Number of sales

600

MEDIAN RENTS FOR COOLANGATTA 2011 MAR

2012 MAR

576

573

594

598

580

$300,000

546

480

479

500

$250,000

421

400

364

$200,000

363 302

300

325

324 299

$150,000

263

200

$100,000

100

$50,000

2013 MAR

$250

2012 SEP

2013 MAR

2011 SEP

2012 MAR

2010 SEP

2011 MAR

2009 SEP

2010 MAR

2008 SEP

2009 MAR

2007 SEP

2008 MAR

2006 SEP

2007 MAR

2005 SEP

2006 MAR

2004 SEP

$280

2005 MAR

$0

2003 SEP

$270

2004 MAR

0

2003 MAR

Flat 1 Bed

589

Median sale price

Prepared by PRDnationwide Research. Source: PDS

Half year period

Dwelling type

$310 Flat 2 Bed

$310

Prepared by PRDnationwide Research. Source: PDS

$310

$430 Flat 3 Bed

$400 $440 $370

House 3 Bed

$375

$600

$500

$400

$300

$200

$-

$100

$480

Observing the Unit Price Points chart, this small half yearly rise in the median unit price can be seen through the small expansion of the $250,000 to $399,999 price range. Where in the half year period earlier it accounted for a total of 43 per cent of transactions, during the March 2013 six month period the same price range increased six per cent to account for 49 per cent of total transactions. Over the 12 months to the March 2013 half year period, units priced from at least $500,000 went from accounting for 28 per cent of transactions, down to 20 per cent. The move to the affordable end of the market is a sign of both buyer demand in combination with stock on the market as well as prevailing economic conditions.

Median weekly rent Prepared by PRDnationwide Research. Source: RTA

UNIT PRICE POINTS 2011 MAR At least $500,000 $450,000 to $499,999

Price points

2011 SEP

30%

7%

$400,000 to $449,999

10%

7%

15%

12%

17%

16%

12%

6%

Less than $200,000

3%

0%

22%

8%

$300,000 to $349,999

$200,000 to $249,999

2012 SEP

28%

7%

$350,000 to $399,999

$250,000 to $299,999

2012 MAR

31%

11%

20%

40%

14%

13%

16%

18%

9%

6%

8%

12%

16%

19%

13%

8%

8%

60%

20%

7%

6%

10%

10%

5%

8%

6%

16%

2013 MAR

There are still investors present in the Coolangatta Area market, with money still flowing on from the resource sector in North and Central Queensland as well as from Western Australia. As the resource sector has begun its inevitable slowdown, employees are realising the need to invest the money earned into something tangible. As such, the Coolangatta Area, with its proximity to the Gold Coast Airport as well as the overall lifestyle factors make it an attractive proposition, especially for longer term investments with a view to retirement. Over the past three years, as the median price of both houses and units has trended downwards, median rental price have either remained unchanged or seen good increases (three bedroom houses and three bedroom units have both recorded strong rental growth in the past 12 months). In turn, this has led to better yields for investors, with a three bed house potentially achieving a yield of 5.94 per cent (based on the median house price in conjunction with median three bed rental price).

7%

80%

100%

Percentage of total sales

Prepared by PRDnationwide Research. Source: PDS

Research Analyst │Matt Ballam P (07) 3026 3356 F (07) 3166 0456 E mattballam@prd.com.au PRDnationwide Coolangatta │ Jason Abbott P (07) 5536 5526 F (07) 5536 7066 E jason@prdcoolangatta.com.au Prepared by PRDnationwide Research. Source: PDS, Housing NSW. PRDnationwide does not give any warranty in relation to the accuracy of the information contained in this report. If you intend to rely upon the information contained herein, you must take note that the information, figures and projections have been provided by various sources and have not been verified by us. We have no belief one way or the other in relation to the accuracy of such information, figures and projections. PRDnationwide will not be liable for any loss or damage resulting from any statement, figure, calculation or any other information that you rely upon that is contained in the material. Prepared by PRDnationwide Research © All medians and volumes are calculated by PRDnationwide Research. Use with written permission only. All other responsibilities disclaimed. © 2013

Coolangatta area property watch 2013 q2