Coolangatta Area Property Watch Q2 2013
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.
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.
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.
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.
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.)