Following a similar trend to most coastal centres, Hervey Bay is currently experiencing strong demand for all asset classes with very limited supply. Rates of sale for vacant land has dramatically increased, with most new estates selling lots that aren’t even developed yet and developers scrambling to develop more stock to ride out the strong level of demand. River Heads has experienced similar demand for lots that have been sitting inactive for a number of years. Some re-sales at River Heads have seen a more than 50 per cent increase in value over the past 18 months.
Local builders are looking for staff to meet construction demand with some reporting project bookings out to September 2021 already.
The established home market has seen some price increase, however not to the extent experienced for land. Some recent activity has seen two- to five-year-old homes reselling for 15 per cent higher than their original purchase price. New units have also been in demand and sell quickly, however, and new stock is limited. Older units, although experiencing strong demand, don’t seem to be showing good growth as yet. This is, however, only a matter of time as yields are typically higher for these older units.
Vacancy rates for investment property are very low, with numerous reports of 20 to 30 people attending open houses. Rental rates are beginning to lift due to this strong demand and lack of supply; however, gross yields above five per cent per annum gross can still be achieved in a number of cases.
Buyer profiles range from local owners and investors to interstate owners waiting for borders to open and relocate. Sight unseen sales are becoming common, with buyers reporting missing out on numerous properties. Agents have multiple buyers ready with a large number of recent sales not even making it to advertised listing.
Maryborough is also experiencing similar conditions with a strong level of demand, limited supply and limited rental accommodation. Looking forward, we are likely to continue to experience strong demand for land and construction for the first quarter while grants are on offer. Activity may begin to slow thereafter and there is a risk that some interstate buyers may resell in a short period if the pandemic comes under control. This may see some balancing of
supply and demand towards the end of the year. The outlook is, however, changing on a daily basis and we wish everyone a safe and healthy 2021.
Doug Chandler
Director
HTW Hervey Bay