Homes selling unseen in holiday hotspots
Houses in popular holiday towns across the country have become hot property, as flocks of buyers descend on locations such as Byron Bay, the Gold Coast and Western Australia’s Margaret River Region, with some properties even selling without an inspection.
With COVID-19 placing international travel on indefinite hold, cashed-up professionals seeking a lifestyle shift are snapping up properties in Australia’s most idyllic towns.
McGrath Estate Agents Byron Bay principal, Nick Dunn, who has been selling property in the seaside town for more than 30 years, described current demand as “off-the-hook”.
Mr Dunn said stock levels were becoming an issue in Byron, with buyers becoming willing to purchase properties sight unseen.
“I’ve done about three myself and I know that other agents have done them as well,” Mr Dunn told Australian Property Investor Magazine.
“Before COVID, I would never take a sight unseen buyer completely seriously, because it always comes up at the end that they insist on having a look.
“But now it’s definitely happening.”
Mr Dunn said he actually transacted himself without an inspection, after returning from Japan in March and spending two weeks in isolation.
“The only reason I did was I was waiting for something to come up on this street for a long time and it came up so I jumped on it,” he said.
“My business partner went through for me, but I knew I was going to knock it down one day and rebuild, because that’s where I wanted to be.”
Mr Dunn said there was no discounting occurring by vendors, with the demand resulting in most properties selling above their asking price.
"In no shape or form is there any discounting, and I’d be bold enough to say that there has probably been price growth of five to 10 per cent," he said.
Byron’s rental market is also under significant pressure, with supply in traditional leasing markets dwindling to zero and spilling over into holiday rentals.
Mr Dunn said that usually in the middle of winter, he would have around 15 properties available to lease, but now he has just four.
The tightening supply situation is also playing out at boutique agency Byron Beach Realty, which also operates a holiday rental business in addition to providing traditional real estate services.
Byron Beach Realty licensee Diana Green said at the start of the COVID crisis, Byron Beach Realty had been forced to cancel and refund all of its holiday bookings.
But those holiday homes are all filled now, some by owners moving into their vacation houses and working from home, and others by those who would have previously taken a permanent rental.
“We very seldom get vacancies of any sort, whether it’s owners staying in their homes or people that have said ‘right, I’m willing to pay your holiday rental rate, or very close to it’ to stay in these houses’,” Ms Green said.
On the sales side, Ms Green said one property, listed in the $4 million range, attracted 10,500 views on the Byron Beach Realty website.
Ms Green said demand was largely coming from owner occupiers seeking a safer haven than Australia’s big cities.
“Almost every single person that I’m waiting to find houses for, and I’ve got pages and pages of them, they are wanting to come here to live," Ms Green said.
“They might keep a city house, but they want this for backup.”
A similar story is playing out in Western Australia, with the state’s hard border resulting in a bonanza of buying in the Margaret River Region.
Demand in WA’s South West is coming from the full range of property buyers, with first homebuyers taking advantage of generous federal and state government grants to build a new home, and wealthy executives and retirees buying up premium properties.
Development Capital Management managing director Darren Cooper has been developing a housing estate in the town of Witchcliffe, located several kilometres south of Margaret River, since 2011.
Mr Cooper said he’d been surprised by the swift uptick in demand for vacant lots and house and land packages at the Reserve on Redgate estate following the escalation of the COVID crisis.
“The project has been going for years and has been a steady barometer for the South West market,” Mr Cooper said.
“We have typically done around one sale per month, but recently we sold 12 lots in six weeks.
“That’s partly because of the government stimulus, but it’s also partly because of the realisation that working from home actually works, and people don’t need to be in the office, so they’re seeking a tree-change.”
Stocker Preston Dunsborough property consultant Tony Farris said the Margaret River Region property market was the most potent it’s been since 2005-2006.
Mr Farris said there was considerable pressure on rental supply in the South West, with just seven properties currently available to rent across the towns of Dunsborough, Margaret River and Cowaramup.
“What people don’t realise is that we are actually quite a small market down here so when the market starts to come under siege, whether it’s from buyers or prospective tenants, we get stripped of supply very quickly,” Mr Farris told Australian Property Investor Magazine.
“Right now there is a combination of factors that are forcing the issue on the market, especially from a rental point of view. I’ve never seen it this light on.
“It’s been forced into this situation because there has not been a lot of investment down here in the last two or three years, where people have bought land and decided to build to rent out.
“There has been a level of investment but there hasn’t been enough to provide for the moment that we’re dealing with right now.”
Mr Farris said demand was surging for not only house and land packages such as the Witchcliffe estate, but also premium homes.
“For us, we are very fortunate that we have such a diverse market down here,” he said.
“We are seeing capital flow coming into our market from first homebuyers, second homebuyers, professionals looking to invest in the region and we’ve got that demographic that’s not going to be holidaying overseas, those that are 60-plus, who are really focused on securing an acquisition down here and enjoying it.
“We are seeing very good foot traffic in home opens and strong demand for private inspections across the wide range of properties that we’ve got, whether it’s on the beachfront at Dunsborough or Eagle Bay, up into the semi-rural market of Yallingup and the Quindalup hills, areas just out of town of Dunsborough where people have 20,000 square metres of land, a lot of privacy and space and some really incredible properties.
“Then on the flipside we’ve got the mining sector, which has put a wall up to eastern states fly in fly out workers, so we have this pressure on the area to provide rental properties to those who are moving from the eastern states and are choosing to live in Dunsborough or Margaret River or Yallingup.
“We’ve seen people from the northern beaches of Sydney, the NSW central coast and down into Victoria, they have to get over here if they want to retain their job, and they’re primarily focused on buying because the rental market is not offering enough choice.”
On the Gold Coast, Australian Property Investor Magazine recently reported that the city had become a property bright spot post-COVID lockdown, with local downsizers and interstate investors rapidly buying up available properties.
Ray White Surfers Paradise Group chief executive Andrew Bell said the Gold Coast was entering a “fascinating new era”, with a rush of buyers seeking to move to the sunshine state following the pandemic.
Mr Bell said Ray White Surfers Paradise had sold nine properties in the last weekend of July, most of which were sold either unseen or via virtual inspection.
“Since a second phase of COVID has accelerated recently we have seen a dramatic increase in the number of buyers purchasing here from southern states,” Mr Bell said.
“Generally these people are aged 60 plus, they see Queensland as a safer place to be, and have said to themselves ‘Why am I living here, I’m moving to Queensland’ - it’s as simple as that.
“We are finding that people who are now reassessing their lives and choosing to move to Queensland is something that’s driving the current strong activity seen in the market.”
Mr Bell said many buyers had been motivated to find properties that suited a work from home lifestyle, with that demand complemented by the downsizer set.
“The current COVID climate is certainly having a fascinating knock-on effect for the Gold Coast property market,” Mr Bell said.
“As buyers are now spending more time at home and less time travelling, they are wanting to find properties that better suit their current lifestyle and living arrangements.
“There was a wide range of properties in our latest auction including apartments and units that people want to reside in as part of a downsizer or retirement strategy.”