Australia’s residential property market is heating up, just as thousands of people migrate to the country’s coastal hot spots, many of them prepared to mix down time at the beach with a spot of aspirational holiday house hunting.
Only a month from the close of 2019, and it’s been revealed Australia’s residential market is in full recovery mode with house prices in most cities surging upward, contributing to a national average increase of 1.7% in November according to CoreLogic RPData figures.
The outlook, too, remains positive, with CoreLogic analysts forecasting record home values to be set in Sydney and Melbourne in the coming months as the cumulative effect of interest rate cuts and a loosening of previously stringent lending conditions help fuel the recovery.
It’s anticipated that premium lifestyle markets along Australia’s populous east coast, which have already enjoyed a buoyant six months, will benefit from the traditional busy summer period, particularly given persistently low stock levels and increasing buyer demand.
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On the Sunshine Coast in Queensland, 90 kilometers north of the state’s capital city Brisbane, buyers have already forked out millions of dollars on beachfront apartments this year including a record A$11 million (US$7.5 million) sale of a unit on the north-facing beachfront glamour strip, Hastings Street at Noosa Heads.
The full-floor unit, one of only six in the prestigious Noosa Court building, was the first in the complex to be listed in more than a decade and was sold by Tom Offermann Real Estate agent Roark Walsh.
A whole floor apartment in the Noosa Court building on Hastings Street, Noosa Heads, was the first in the complex to be listed in more than a decade and sold for about A$11million.
Tom Offermann Real Estate“Noosa Main Beach is one of a very few true north-facing beaches on the east coast of Australia,” real estate principal Tom Offermann said.
“Noosa has an amenable subtropical climate and a town brimming with natural assets, which turns holidaymakers into property buyers, something I have experienced over 30 years,” he said.
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“This, coupled with the Noosa apartment market topping the country for capital growth over the last year at a rate of 24.8%, the trend is continuing,” he said. “The investment potential speaks only of enviable financial success for those who are fortunate to acquire their piece of Noosa Heads’ hottest real estate.”
“We have had a lot of sales in the A$5 million to A$10 million range in the past six months,” Mr. Offermann said, predicting strong market interest to extend through the peak Christmas and New Year period.
The highest sale in the area was set in 2018, when a seven-bedroom beachfront home on Webb Road in Sunshine Beach sold for A$18 million.
It was one of four prime beachfront sales to occur that year, along with the A$15.2 million transaction of tennis champion Pat Rafter’s property on Seaview Terrace at Sunshine Beach.
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The property has been relisted for sale with Tom Offermann Real Estate, this time with an asking price of A$20 million after owner David Hales, a food and beverage entrepreneur, and his wife, Louise, spent more than A$1 million on renovations.
According to the Australian Bureau of Statistics, more than 80% of the country’s population lives within 50 kilometers of the coast, making the country’s residents one of the world’s most urbanized coastal-dwelling populations.
Sunshine Coast buyer’s advocate Ann Lindner said the majority of her clients came to her for help securing a home that was either on the beach or had water views.
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“Particularly expats or retiree clients who want to walk to the beach, be it from a unit or a house, and they have the funds to purchase them,” she said.
Mrs. Lindner said the Sunshine Coast offered 60 kilometers of pristine beaches, stretching north from Caloundra to Noosa.
There are “surf beaches, calm beaches, walking beaches and dog beaches,” she said. “There’s something to suit everyone both in style and budget.”
Balcony view from a whole floor apartment in the Noosa Court building on Hastings Street, Noosa Heads.
Tom Offermann Real EstateGolden Coastline
The Knight Frank Prime Waterfront Index, released this month, has found that of Australia’s prime properties—considered the top 5% of the market—those with absolute water frontage are worth, on average, 65% more than comparable homes inland.
The report, which measures how much uplift value an absolute waterfront location—-where a property’s boundary is immediately adjacent to the waterline can add to a property, revealed that prime waterfront properties in Sydney, followed by the Gold Coast and Perth offered the most.
Knight Frank’s Head of Residential Research Australia Michelle Ciesielski said that while harbourfront properties in Sydney commanded the highest premium of all waterfront properties, prime coastal homes across the country enjoyed up to 61% added value compared to similar properties inland.
The Knight Frank figures suggested the proportion of waterfront properties sold compared to the total number of prime property transactions was as high as 42% in the 12 months to the end of September.
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Drilling even further into the sales figures found that coastal homes were the most popular of all blue ribbon waterfront sales, comprising of 46% of the transactions.
Gold Coast prestige realtor Michael Kollosche said premium beachfront property in the area was transacting quicker during 2019 than at any other time in the past decade.
Having been heavily impacted by the fallout from the global financial crisis in 2008, which resulted in beachfront properties transacting at 50% less than what the owners bought them for, Mr. Kollosche said today’s prestige buyers are more conservative buying for lifestyle purposes with little to no debt.
“There’s very limited stock on the market, with owners in most beachfront areas, such as Mermaid Beach and Palm Beach, wanting to retain the assets, so it’s leaving very little opportunities for buyers to get into the market,” he said.
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“It means buyers are having to come to terms with paying considerably more than what they would have done previously,” Mr. Kollosche added. “The market is normalizing after being undervalued for so long after the [global financial crisis].”
Figures from property analysts, CoreLogic RPData, shows Australia’s iconic east coast markets are moving back into growth territory, with values increasing across the Gold Coast (+1%), Sunshine Coast (+0.9%) and Richmond Tweed (+0.4%) for the quarter ending in September.
This year’s most notable direct beachfront sales have occurred predominantly on Mermaid Beach’s most premium street, Hedges Avenue—colloquially known as “Millionaire’s Row” due to its prestige status—with three homes on modest 500 square metre blocks selling for up to A$6.5 million.
A Hedges Avenue, Mermaid Beach, home sold for A$6.395million on Millionaire's Row, one of Australia's most sought after beachfront property locations.
Kollosche - Broadbeach“The depth of the market is stronger, there’s less gearing [borrowings], and all of those factors will cause that prestige beachfront market to gradually increase and return to its former glory,” Mr Kollosche said.
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Premium Prices
When LJ Hooker Palm Beach were engaged to sell a blue ribbon beachfront house in June—the first time it had traded since construction in the 1980s—they opted to quietly market the listing with their exclusive database of high-end and qualified buyers.
The sale’s strategy resulted in a record price, with the Barrenjoey Road, Palm Beach, property selling for more than A$20 million, the highest single transaction for the exclusive area, located 45 kilometers north of the Sydney central business district.
The absolute beachfront property, located on Barrenjoey Road, Palm Beach, set a new suburb record when it sold for more than A$20 million in winter this year.
LJ Hooker Palm BeachGiven the current demand for prime beachfront property, LJ Hooker Palm Beach principal David Edwards said the strategy was a testament to the power of the database, with interest coming from half a dozen genuine buyers.
“The vendors had some strong expectations, and we achieved a very good sale for them, which maintains a consistent trend for properties such as this, which are very much in demand and particularly sought after,” he said.
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The generous 2,100-square-meter, Philip Cox-designed home fronted the quiet waters of Pittwater and had a grass tennis court to the rear.
“The issue with the top end of the market is that pragmatic buyers will look at comparable sales, but the very top echelon of property will sell for a price that’s beyond those comparable sales,” Mr Edwards said.
“These properties are often generational properties,” he added. “When they come up for sale, it’s an opportunity.
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