Beach town prices in Australia on the rise again, research shows
Rising residential property prices in certain coastal areas in Australia shows the worst could be over for beach towns, according to research.
Figures from property research group PRDnationwide show there has been strong growth in some locations with units appreciating at a faster pace than houses.
PRDnationwide’s head of research Aaron Maskrey said in the past year the best performing coastal town was Bells Beach in Victoria.
‘Unit prices performed well, increasing by 24.5% during the year ending in December 2011. Similarly, house prices in Bells Beach increased by 5.2% for the same period,’ he explained.
Maskrey said the strongest area for activity has been the Gold Coast with 2,722 unit sales and 2,216 house sales in the second half of 2011. There has also been a boost for median prices in Port Douglas with units up 14.8% to reach $310,000.
‘Looking at the main coastal markets across Australia, many of them are set to reach the bottom of their property cycle over the year, making it a good time to invest in coastal property, given the past three year's price falls,’ said Maskrey.
He admitted it was not likely that the market would see double digit growth in the near future, but it was still a good time to buy. ‘For investors looking to buy for capital gains there are good opportunities out there,’ he said.
He pointed out that it is very location specific, with some markets faring better at the moment than others but coastal property can be a good investment if you buy in the right location.
In Coffs Harbour in New South Wales the median house price is down 2.6% Similarly houses in Queensland's Whitsunday Region are down 1.7% for the year.
Four out of the top five beach town markets to have experienced the largest increase to the median price were for units, not houses. ‘Units have outperformed houses for median price growth in the major costal destinations over 2011,’ said Maskrey.
Byron Bay in New South Wales experienced big decreases in median price for both units and houses, at 25.4% and 19.3% respectively, the research also found. But unit prices in nearby Yamba performed well, increasing by 9.1% during the year ending December 2011. In Port Douglas the median unit price increased 14.8%.
‘Many coastal markets have experienced significant drops in value over the past three years, through the double hit of tightening credit from the banks and a softening in the tourism industry,’ explained Maskrey.
‘Prices have become very competitive over the years, with vendors selling at a discount to meet the market. Typically, I recommend buying houses over apartments for investment because of the security with owning your own section of land. But if investors are looking for affordable property as a holiday home while still achieving decent capital growth, coastal apartments are a great option,’ he added.
Maskrey said the downturn in the volume of property sales in beachside towns continued and most beach towns experienced a decline in activity over the year, at an average 32.4%. However, Broome experienced a rapid increase of 82.4% in unit sales and 31.5% in house sales.