Greener pastures predicted for regional real estate in NSW
Media release - 18th October, 2013
Regional property markets tipped for big growth by Easter
- 15 percent price growth is achievable for some regional real estate markets by Easter 2014 as a result of a shortage of listings (as much as 40 percent), and an average 20 percent increase in buyer demand
- Demand is being driven by cheap money, improved consumer confidence and the expectation that robust Sydney property values will filter through to regional centres
- Listings are down as regional homeowners wait to exact the best possible capital growth for their homes
Owner-occupiers and investors are leading the charge for entry-level housing in regional New South Wales, according to leading real estate group Raine & Horne, with the possibility of price growth of up to 15 percent by April 2014.
“It appears the news of robust price growth in Sydney is starting to impact regional real estate markets, with local buyers vying with growth- and yield-hungry investors for affordable real estate,” says Angus Raine, Executive Chairman and CEO of Raine & Horne.
“Raine & Horne offices across regional NSW are reporting buyer demand is up by as much as 20 percent compared to October 2012, yet it seems regional vendors are continuing to sit on their hands, with listings down by between 20 and 30 percent.
“Property owners are waiting for additional evidence that the price growth achieved in Sydney will translate to their region, and appear cautious about jumping the gun early, and conceivably missing the opportunity to realise potentially bullish short-term capital growth.”
“Entry-level homes in Batemans Bay are always on the menu for owner-occupiers, investors and those looking for holiday homes – although we’ve also recorded some sales of homes valued between $900,000 and $1 million in the past few months,” says Mr Porteous.
Mr Porteous confirms that listings in the Batemans Bay region are down by as much as 40 percent, as homeowners wait for more evidence of capital growth, particularly as prices have been flat in Batemans Bay since the Global Financial Crisis.
“People are reading about the market spurt in Sydney but haven’t yet made the decision that it’s translated to Batemans Bay.
“They don’t want to sell too early and miss out of the maximum growth opportunities, although picking when to sell is a tricky business,” adds Mr Porteous.
If, as expected, stock levels in Batemans Bay fall further, and with buyer enquiry 30 percent stronger than October 2012, Mr Porteous says price growth of 15 percent is possible by Easter 2014.
“Yet there is still value in the market and the smart buyers are grabbing homes before the market takes off,” confirms Mr Porteous.
For instance, a buyer snapped up a four bedroom home on a 1300 sqm block at 28 Johnson Place, Surf Beach for $250,000 at auction last weekend.
“This price reflects very closely the vendor’s expectations,” says Mr Porteous.
“For example, last weekend we sold a four-bedroom, tri-level home at 31 Tulong Avenue, Cooma, for $400,000 following the first open home,” says Mr Menchin.
“That said, the majority of buyer enquiry is for homes priced between $170,000 and $340,000.”
Buyer demand for entry level property in Cooma is 20 percent stronger than the same time last year, according to Mr Menchin, while listings are down by about 25 percent.
“The combination of cheap real estate, lower interest rates and growing consumer confidence is driving up buyer demand for affordable housing in Cooma,” says Mr Menchin.
“Sharply rising rents are also making home ownership a more sensible proposition for tenants, which is creating additional demand pressures,” Mr Menchin added.
“Like other regional centres, lower interest rates and improved consumer confidence are major contributors to stronger buyer activity, while the smart buyers have recognised that the improvements to the Great Western Highway are almost complete,” says Mr Ebzery.
“At the same time, listings are only filtering through in dribs and drabs.”
According to Mr Ebzery, the middle price ranges between $450,000 and $650,000 are attracting plenty of interest from baby boomer investors and owner-occupiers.
To illustrate the level of buyer demand in Leura, last weekend, Raine & Horne Leura held an open for inspection at 90 Craigend Street, Leura, with an asking price above $599,000.
“The double storey home was on the market with Raine & Horne Leura for a week and attracted seven committed groups,” confirms Mr Ebzery.
“We expect the listing shortage and buyer demand will see the prices of Blue Mountains homes grow between now and Christmas, with 5 percent increases a distinct possibility.”
In the Hunter, Michael Cleaves, Head of Sales and Auctions at Raine & Horne Cessnock, confirms listings are down 20 percent on Spring 2012, while buyer enquiry is a minimum of 20 percent stronger, with investors leading the charge.
“We recently sold 47 George Street, Cessnock to a Sydney investor for $320,000,” says Mr Cleaves.
“The property was on the market for just two weeks and will rent for between $370 and $380 a week.”
Although Mr Cleaves says there is evidence that first home buyers are also making a mark.
“Lower interest rates mean it’s now cheaper to take out a mortgage on an entry-level home in Cessnock than to rent, which is driving enquiries from first time buyers.”
For further media information contact:
Angus Raine, Executive Chairman and CEO, Raine & Horne on 0409 920 697
Andrew Harrington, National Marketing & Communications Coordinator on 02 9258 5400