Australia’s lifestyle driven coastal markets have fared worse than other markets over the last year. Conditions are slowing improving, and now may be the best time to position in the market while prices remain low.
For those prospective buyers who have aspired to buy into one of Australia’s coastal lifestyle markets but couldn’t quite afford to do so, now may be a good time to consider your options. Housing values across some of Australia’s most popular coastal regions have shown significant falls and competition in the ‘lifestyle’ market remains relatively subdued.
It is becoming increasingly clear, however, that many of these lifestyle markets have seen the worst and are now showing some signs of improvement:
• The number of home sales across the major coastal markets has increased by 37 percent since bottoming twelve months ago.
• The time it takes to sell a home is becoming shorter across most markets and vendors are discounting their properties less (see ‘Major coastal lifestyle markets’ summary table below).
• The total amount of stock available for sale is gradually reducing indicating that supply is being absorbed by the heightened level of buyer activity.
The turnaround in market conditions is coming from a low base, however, and most coastal lifestyle markets still provide a wide range of opportunities. Generally prices are still lower than what they were last year and the level of negotiation to be had by the buyer is still typically higher than what they would experience in the metro areas.
Despite the strong jump in market activity, monthly sales volumes remain well below the ten year average, suggesting competition in the market is far from fierce.
While the conditions appear to be improving, the road to recovery is likely to be a slow one for many of these regions. The tourism industry has been hit hard by the Global Financial Crisis, with the Australian Bureau of Statistics reporting that takings from tourist accommodation were down 5.8% over the year to June 2009 and room occupancy rates have plunged to just 59%. Tourism Australia is forecasting that visitor arrivals will fall by about 5.5% over the second half of 2009.
Arguably Australia’s most iconic lifestyle market, the Gold Coast, provides a good case study. The median house prices is still 7.7 percent lower than last year and the median unit price is 8.4 percent lower than last year. The annual number of properties available for sale has fallen by 6 percent from 20,500 in September last year to 19,300 over the last 12 months. Houses and units are taking 68 days to sell compared with 100 and 92 days last year for houses and units respectively.
In summary, these popular coastal markets are still much more affordable than they once were and market conditions are still in favour of the buyer. For these reasons now is likely to be a good time to be buying into in the market for future growth.
Buyers are already returning, as evidenced in the Sales Volumes graph, and as the global economy continues to improve, visitor numbers will once again pick up, reinvigorating these popular lifestyle markets.
