Buy Sooner Rather Than Later

Early March is still the Port Douglas “off season”, but we can already feel the rumblings of what is going to be a bigger than anticipated year in residential real estate.

  What with the lure of sun and plenty of water the overall prospects for Port Douglas and surrounds remain good if not great.

 The state of Queensland is enjoying an abundance in job growth, strong output growth, and smiling retailers ringing up sales due to  positive consumer sentiment. The rise in sentiment can be attributed to strong growth in employment and wages which have offset the negativity surrounding higher interest rates.

 Our closest “city centre” Cairns is already preparing for the anticipated population growth with major shopping centres expanding and selling for record prices.

 Port Douglas’ own retail strip (Macrossan Street) is experiencing major expansion right to the outskirts.  Juniper’s Coconut Grove currently under construction will have 16 new retail outlets. The adjoining side streets such as Owen Street (with stage 2 of Portico Shopping centre under construction) Grant Street, Warner Street and Wharf Street have also seen an increase in the construction of new retail outlets and the leasing of previously empty retail outlets. iew full map athttp://www.realestateportdouglas.com.au/location.html 

A hot topic in Port Douglas is the ongoing Waterfront development.

The Douglas Shire Council is currently undertaking community engagement on the Water front of the Dickson inlet.

Several proposals have been submitted to date. Suggested commercial, retail, restaurant, swimming pools, yacht moorings board walks and marina plans have been thrown around the table. Nothing is firm to date but certainly the article published by the Port Douglas and Mossman Gazette February 1, 2007 sparked a lot of community interest, it provided information of a State Government Plan as an example of what is possible. Local council will now undertake a series of public meetings and work shops to update the community before joining with the State Government.

More information can be sought from Douglas Shire Councilwww.dsc.qld.gov.au 

  

Compared to the rest of the country the Queensland housing sector is in a happy place.  Measured housing investment in Queensland is rolling along and is at its highest share of the national total since the mid 1980s.

All this of course goes back to the demographics. For the first time since March 1999, Queensland has run second in the population growth stake, Queensland’s growth was a 1.9% increase compared to Western Australia’s 2.0% increase. However, in raw numbers Queensland is still well ahead in population growth.

One factor contributing to an increase in interest in buying property in our “off season” includes the stamp duty relief in Queensland.

First home owners in Queensland now enjoy substantial stamp duty relief under changes that took effect on January 1, 2007.

First home buyers who purchase an existing home valued up to $320,000 or vacant land valued up to $150,000 to build their first home will pay no stamp duty. Previously, stamp duty kicked in at $250,000 for established homes.

The Queensland government has also cut stamp duty rates for homes values between $320,000 and $460,000 and land between $150,000 and $300,000.

For land; the concession is available for individuals who are at least 18 years of age and acquire vacant land to construct their first home and occupy it as their principal place of residence.

For purchasers of first vacant land of up to $150,000 in value, no stamp duty is payable. The concession progressively reduces as the value of acquired land increases and when the value reaches $300,000, the concession cuts out completely and full transfer duty is payable.

Other elements adding to a surge in interest we believe to have come from the share market. The share market has broken new ground and is due to peak in the near future. The likely result of this will be share owners pulling out their profits from the share market and wanting to reinvest in property. In the meantime, the strong performance of the share market has lured many personal investors away from direct property investment. However with stable interest rates it is expected that indirect investment in real estate will increase through institutional investors and property funds.

As we discussed in our last news letter record low vacancy rates in the Douglas Shire are set to continue throughout 2007, this is driving rents up and generating higher house prices..

Continued strong price growth in the property market, is driving demand up for housing at the lower end of the market.  As house affordability has continued falling further, we see the median house price in Port Douglas is at approx $450,000.

 In the outer areas of Port Douglas, median prices are below $400,000 and this has forced an unprecedented surge for residential real estate in Mowbray, Mossman, Shannonvale,  Cooya Beach, Newell and Wonga Beach.  

Despite the fact the head of the Reserve Bank of Australia recently stated that interest rates were more likely to go up than come down in 2007, we have already seen higher rent levels, and rising property prices enticing investors back to the housing market.

Further to that a presently ongoing online survey reveals that from an investors perspective 58% believe that 2007 will be a year to buy property as opposed to sell or hold property.

Although it is still early in 2007, all the emerging statistics and information, points to further hikes in house prices therefore making a strong argument for buying sooner rather than later.