Buyers testing the waters

Vanessa Jones   |  12:01am March 23, 2013

WATERFRONT houses in the low million-dollar range are proving popular with buyers looking for affordable prestige properties, according to the latest McGrath Report.McGrath real estate agency founder John McGrath has identified the areas of the Isle of Capri, Mermaid Waters, Benowa and Sorrento as prime examples of good buying.He said while the Gold Coast remained one of Australia's best value markets, recent activity suggested the bottom of the cycle had passed."There's a noticeable change in sentiment, with more sales occurring and higher buyer inquiry across the board," he said. "Prices are still well below their pre-GFC highs but homes are selling in a more reasonable timeframe. We may not see major price growth this year, but we'll definitely see more sales."Coverage of the Gold Coast slump has been widespread and this has encouraged a lot of interstate interest among investors and seachangers, particularly from Sydney and Melbourne."Mr McGrath said about 50 per cent of buyers were from out of the area and seeking affordable waterside property or growth investment."Investors usually buy at the lower end -- typically apartments -- but the opposite is true on the Gold Coast, with investors competing against local upgraders for larger family homes in canal suburbs."The prestige sector is also firing up, with several $5 million-plus transactions since November.Real Estate Institute of Queensland Gold Coast zone chairman John Newlands said there had been a definite pick-up in buyer activity from those specifically looking for waterfront property."We've noticed a spike in the late $600,000s to $900,000s price range which is the entry level for these types of properties," he said."We had a house on the Isle of Capri which was listed at $795,000 and we had 13 groups through on the first open for inspection which resulted in a sale. People are realising there are some great opportunities to buy properties that in better times were selling for 25 to 30 per cent more than what they are currently, so they are positioning themselves for the future."He said properties on main river or canals were unlike many other types of properties because tidal waterfront homes were a limited supply."It's all about supply and demand. People know the chance to recreate them again are non-existent so they know they are going to have good capital growth as this opportunity won't arise again," Mr Newlands said. "A lot of these suburbs are well located close to schools, infrastructure and shops and from a boating point of view you can be out on the aquatic playground in the Broadwater in a matter of minutes."Professionals John Henderson Real Estate principal Andrew Henderson said Mermaid Waters stock in the $700,000 range was selling well."Potentially, if you get the right property you could sell it on the same day," he said."Our open homes are being a lot better attended, especially in the sub-million mark and there is a definite lack of stock in properties priced in the $700,000s."People are getting more confidence because there is better affordability, lower interest rates and prices have come down."He said with many retirees choosing to downsize after living in one house for 20 to 30 years, buyers could pick up great renovators on the waterfront to transform into family homes.

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Buyers heading south to the Tweed Coast

THE Tweed Coast is shaping up to be one of the area's most active regions, a Tweed development forum heard this week.

The Urban Development Institute of Australia (UDIA) this week held its inaugural forum to discuss the opportunities and challenges facing the region.

The think tank, sponsored by Villa-wood, created a platform for the UDIA to take an increasingly active role on the Tweed as an independent liaison between developers, Council and other regulatory bodies.

A panel of speakers addressed the forum on a range of topics including demographics, supply, infrastructure requirements and the development approval process.

Ray Group (which developed the $1 billion Salt Village) CEO Tom Ray said the company's research had shown after the recent lift in sales volume, there were only about 350 lots remaining in the pipeline for development across the Tweed.

"That sets a very good base for future growth," he said. "People need to recognise although values have come back significantly, history does repeat itself and those that buy in today will be able to reap the rewards of the next upswing."

He drew a number of comparisons between Tweed and Gold Coast beachfront property, highlighting the cyclical nature of the property market and the importance of recognising value in the current low phase.

"In the lead up to the Global Financial Crisis (GFC), the relative ease of obtaining credit led to a housing bubble where prices for a 400sq m beachfront lot on the Gold Coast reached about $8 million, while at the same time we were selling larger beachfront lots at Salt Village for about $3 million," he said.

"We virtually sold out of all stock at those prices but when the GFC hit, the market stalled and those values were no longer attainable."

predominantly by end users including many young families."

Oliver Hume Real Estate Queensland joint managing director Marcus Buskey said with 350 developable lots remaining on the Tweed Coast, there was about two years' supply based on current sales rates.

"It's important to recognise this is all that remains for those who want to live within walking distance of the beach," he said. "There will be another 10,000 lots released by Leda over the coming years to help cater to demand but this new stock will be positioned west of the highway, so it will attract a different market."

He was positive about the future of the region with buyers showing more confidence and the area attracting a wider demographic.

"With the upgrades to the highway and Sexton Hill, we now have more buyers moving down from the Gold Coast and Brisbane, and choosing to commute to school and work each day," Mr Buskey said.

"While there hasn't been a lot of price growth there has been a definite growth in sales volume, and with financiers starting to be a bit less stringent in terms of lending, the wheels are starting to turn again."

Richard Duce, of Leda Developments (the developer of Cobaki and Kings Forest), said the population of the Tweed was about 85,000 but an estimated additional 38,000 people were expected to move to the region over the next 18 to 20 years.

"It's no secret there are significant land constraints along the coastal corridor, and that's why we expect our two projects to absorb about 70 per cent of future land take up."

Consolidated Properties (which developed the $1.5 billion Casuarina Beach) CEO Don O'Rorke said "the demand for both residential product and a new retail centre at the heart of Casuarina was "very strong", and the proposed 20ha retail and residential community, Casuarina Village, would set the region in good stead in terms of population growth over the coming years.

UDIA Gold Coast Logan Branch president Stephen Harrison said the Tweed Coast was shaping up as an active one.

"The UDIA can assist by ensuring clear lines of communication exist between peak industry bodies and by taking a proactive approach to identifying and training new talent in the development industry," he said.

Tweed Shire Council Planning and Regulation director Vince Connell said the council was reviewing a number of its internal planning processes in line with new State Government reforms.

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Study: Younger buyers leaving Japanese for South Korean, American brands

Young Car Buyers Shift Preferences from Japanese to U.S. and Korean Brands, Reports Edmunds.com

SANTA MONICA, Calif. - March 20, 2013 - American auto brands are gaining strength with younger buyers in the U.S., while their Japanese rivals have taken a big step back, reports Edmunds.com, the premier resource for car shopping and automotive information. According to an analysis of new car retail registrations from R. L. Polk & Co., American brands accounted for 36.8 percent of cars bought by Americans age 25 to 34 in 2012, up from a share of 35.4 percent in 2008. Meanwhile the share of Japanese brands for the same age group plummeted from 50.6 percent to 42.9 percent during that period

But even with the incremental success of American brands, Edmunds.com found that the exodus from Japanese cars by young buyers is turning mostly toward South Korean brands. About 10 percent of new cars purchased by 25-to-34 year olds in 2012 carried South Korean nameplates, more than doubling the rate for this age group since 2008.

"U.S. automakers have burst onto the scene in recent years with small, fuel-efficient and affordable cars that really appeal to a young set of buyers," says Edmunds.com Sr. Analyst Jessica Caldwell. "But while Detroit might be chiseling away at the Japanese grip on Gen X and Gen Y, South Korean brands are taking big hacks. Not only are the Koreans making better cars for young people, but they've also worked to make credit available to young buyers who still don't have solid credit history."

The South Koreans' progress with young buyers reflects their overall growth in the U.S. market. Korean brands represented 9.5 percent of all new retail registrations in the U.S. in 2012, almost twice as much as their share of 5.0 percent in 2008.

European car labels are flexing their own muscles in the U.S. market as well, accounting for 9.9 percent of new car registrations in the U.S. last year, up from 8.5 percent in 2008. Like the South Koreans, European carmakers have delivered consistent growth among all age groups since 2008, with the biggest successes among older car buyers, thanks to Baby Boomers choosing European luxury cars post-retirement.

Edmunds.com offers a wealth of insights into car shopping behavior and habits through its Industry Center at http://www.edmunds.com/industry-center/.

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