Property boom 'just around corner'
THE good times are set to return to the Tweed Coast property market despite the global financial slowdown, with one experienced agent saying the amount of interest in buying houses and apartments in Pottsville is similar to the boom of 2006.
Roger McLeod, of Pottsville Professionals, who has been selling property on the Tweed Coast for more than 25 years, believes that the bust brought on by the global financial crisis is over and another boom is just around the corner.
“The first half of the last financial year, or from about April to December 2008, was probably some of the worst months in terms of inquiry and sales that I have seen on the Tweed Coast in at least the past 20 years,” Mr McLeod said.
“However, the second half of the financial year, from January to now, has been as busy as we have ever seen it,” he said.
“Historically, July and August are our quieter months, because people are taking stock at the end of the financial year.
“But after the successive interest rate cuts at the end of this financial year and the fact that people are realising they would get better returns from property than investing in the stock market or long-term deposits, this period has been the busiest that I can remember - as busy as during the boom of 2006.”
Mr McLeod's comments are supported by research by the Colliers International agency, which compared median sales prices and volumes in March 2008 to the same period this year.
The research found that sale prices for houses in the Pottsville area increased by 4.3 per cent, from $465,000 to $485,000, in that period, making it the fourth-fastest growing area in the Tweed and Gold Coast areas in that time.
While first-home buyers wanting to take advantage of up to $21,000 in government grants to build a new home, or $14,000 to buy an existing property, have helped drive the Tweed property market during the slowdown, the property cycle reached its lowest point in February this year, Mr McLeod said.
“It normally takes people about three to four months to realise the cycle has bottomed out and I believe it did earlier this year, after the successive rate cuts by the Reserve Bank,” he said.
“We are also seeing the return of the investor to the local market, and they are looking for houses or apartments and townhouses between $250,000 and $500,000.
“With the cash rate being as low as it is at the moment, and with about a four per cent rental return, as well as an anticipated capital gain of around four per cent per annum, investors are seeing the value of putting their money back in bricks and mortar.”
First-home buyers still make up the majority of inquiry and are looking to pay up to $500,000 for a home on the coast, with large numbers being drawn across the border by the lifestyle the Tweed has to offer, as well as its more affordable housing, Mr McLeod said.
“We are also seeing a trend of people selling to downsize, but spending the same amount of money, or selling to upsize.
“People are realising that this will be a rare low in the market, and time is running out to make the most of it,” he said