Opteon Central Queensland - opg.netopg.net/sig/OCQAugust2015.pdf · Visit our website Offices:...

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Opteon Central Queensland

Inside This Issue

Tax Depreciation

Rockhampton

Mackay Residential

Wide Bay

Hospitality

Biloela

Airlie Beach

Mackay/ Commercial/ Industrial

Gladstone

Rural

Contact us

August 2015 Edition

Visit our website www.opg.net Offices: Airlie Beach | Biloela | Emerald | Gladstone | Wide Bay | Mackay | Rockhampton 2


Our specialist team can help you reduce the amount of tax payable on your investment property.

Tax Depreciation can produce significant financial gains for you to maximise your tax return.

Tax Depreciation



Land, Land and more Land:

If you are in the market for a vacant block of land to build your dream home, you are spoilt for choice as there is plenty of stock available.

The majority of the new housing estates can be found on the northern side of Rockhampton within the suburbs of Norman Gardens and Parkhurst.

Over the past decade Rockhampton has watched housing estates being developed along Norman Road, now the supply of developable land has almost been exhausted. There is still land available within Norman Gardens with prices starting from around $150,000 for a 400 square metre allotment, however a standard sized block of around 700 to 800 square metres starting from around $160,000. Prices can range up until $200,000 depending on the size and contour of the allotment.

Many new housing estates have been developed within the next major growth corridor of Parkhurst which is an outlying suburb of Rockhampton. Parkhurst is quite a large suburb with several housing estates being scattered throughout. Prices start from around $160,000 for a standard sized allotment through to around $250,000 for a larger acreage allotment.

As we move to the south side of Rockhampton, flood free land is very scarce with very few land sales occurring. A small group titled estate within the suburb of Wandal offer blocks of about 500 square metres with prices starting from around $180,000. Group titled estates are a relatively new concept for the Rockhampton region. Only a handful of estates exist, which shows this concept is still quite untested within the market.

As the Rockhampton market continues to soften/decline, an increasing supply of land and lower demand, mixed with low interest rates makes a good opportunity to buy if you are in the market to build your dream home.

Rockhampton

Your Local Contact:

Adam Bray

07 4927 0893



The Mackay residential market continues to decline, however with steady sales volumes and a recent increase in new house constructions. We have seen 395 settled residential house sales to date and 61 residential vacant land sales.

The below table shows a quick comparison between the second quarter for 2014 vs 2015.

This shows a significant decrease in sales volumes for both categories, however the average sale price for vacant land is noticeably higher in 2015, which may be attributed to an esplanade site sale at $430,000, and the average site area is also greater at 902 sqm compared to an average site area in 2014 of 673 sqm.

Mackay Residential

Your Local Contact:

Andrea Serginson

07 4957 2821



Maryborough

The Maryborough airport is located approximately 2 kilometres from the Maryborough central business district. The airport was originally opened in 1930 by the City of Maryborough and is still owned by the now Fraser Coast Regional Council. Scheduled passenger flights ceased in 2007 after extensive upgrades were completed at the Hervey Bay Airport. For the last several years the primary use of Maryborough Airport has been recreational aviation, aviation maintenance and aviation training.

The Fraser Coast Regional Council has recently signed a joint venture agreement with local businesses to develop a residential air park. The development will be completed in 3-5 stages with a combination of land blocks suitable for a house and private aircraft hangar, as well as single residential lots with access to a common hangar space. The blocks of land are estimated to achieve prices from $160,000 - $270,000, which would set a benchmark for land prices in the area in the current market.

There is some speculation as to whether the land will sell readily once it hits the market. This is a niche market for aircraft owners and should be appealing to the limited potential purchasers.

Wide Bay

Your Local Contact:

Eva Schmidt

07 4123 2499



Bundaberg

Port Gas Pipeline

With the recent announcement that the Queensland Government will honour a commitment to fund the development of an $11 million, 26 km gas pipeline from west Bundaberg to the Port of Bundaberg the region can look forward to economic benefits that will flow into the area as a result.

The gas pipeline will enable economic infrastructure, growth and employment in the region and will create approximately 120 direct full time jobs and around 650 jobs in support industries. The pipeline will secure the establishment of a $70 million Knauf plasterboard factory, which was dependent on the ability to access natural gas. Through direct output and the known flow-on effects generated from associated industries, the net annual economic impact is estimated at $195 million.

Knauf Plasterboard Limited currently manufactures and distributes plasterboard and accessories out of its Melbourne and Sydney plants. Last year, the company bought land from Gladstone Ports Corporation at the Bundaberg Port and is expected to start building a new factory once the pipeline is in place.

The economic benefits that will flow into the region as a result of pipeline and the Knauf project will be enormous in a region desperate for economic change and employment opportunities.

Wide Bay…cont’d

Your Local Contact:

Alexandra Marles

07 4123 2499



Over the past few months we have noted a surge in activity in tourist park segment of the industry within regional areas, with details of a number of caravan park sales in recent months, particularly for owner operations (business and Real Estate, or Going Concern). These transactions demonstrate operating yield ranges of sub 10% to 12.5% for investments ranging from $3.1 to $6 million.

Specialist agents also advise that the market for motel and hotel investments remains slow. We can report the sale for the Real Estate component of a modern corporate style motel in Townsville containing a total of 47 motel suite rooms of varying configuration, plus licensed restaurant and manager’s residence. It resulted in a passive return of 9% for a new 10 year lease term plus a total option period of 20 years.

A refurbished transit style motel in the main motel precinct of Bundaberg resulted in a new lease and operator achieving a passive return of 7%.

The removal of the forced sale style properties from the available selling pool in mining related regions should again assist in stabilising this market.

An encouraging sign for the hotel segment is the obvious reduction in recent times of property being offered for sale by Mortgagees, and as always there remains a sound market for balanced, well performing properties. These include operations in Bowen, north of Mackay that are nearing final negotiations.

Hospitality

Your Local Contact:

Ryan Booth

07 4957 2821



Plans have recently been revealed to grow the Whitsunday Coast Airport to international capacity. Whilst the plans have been described as preliminary steps the region is excited about the future and the potential to increase tourism numbers, tourism expenditure and investment in the region.

The plan for international passenger and export flights to and from the region is part of a $100 million project over a 20 year period. In the next five years the runway is expect to increase by 327 metres to 2.4 kilometres. The terminal also requires a massive upgrade which is estimated to cost $60 million just for stage one.

The project will be funded 51% by Whitsunday Region Council and the remaining 49% will be put to the market for a public/private partnership venture. Investor interest has already been expressed by Chinese billionaire Raymond Wang.

Recent statistics released by Tourism and Events Queensland show international tourism numbers to the region for the year ending March 2015 have increased by 12.5% with the international visitor number sitting at 209,000. A large majority of international visitors are from Europe and New Zealand however, there has been a significant increase in visitors from China. It was reported that the growth in both visitation and length of stay contributed to a 17.5% increase in International expenditure, equating to $141.2 million.

As reported by the Whitsunday Regional Council, the Whitsundays are the fifth largest international tourism market in the State of Queensland behind Brisbane, Gold Coast, Cairns and the Sunshine Coast respectively and of the top 5 the only region that currently does not enjoy direct international access.

By creating direct international access to the region, this will allow for further growth, development and job opportunities for the local tourism industry and broader Whitsunday economy.

Airlie Beach

Your Local Contact:

Tim Adams

07 4948 2966



Residential Rental Update

At the beginning of 2015 vacancy rates were at an exceptional 2-3% down from around 9% at the end of 2013. However in the last few months vacancy rates have increased rapidly due to the properties owned by miners being brought back into the rental pool. As there is minimal building activity at present, vacancy rates will drop again over time as the current rental supply will be absorbed by the natural population growth in the Gladstone region.

Townhouses

The Residential Tenancies Authority indicates that the median rent for a 2 bedroom townhouse has fallen from $400 p/w in June 2013 to $250 p/w in June 2015. The median rent for a 2 bedroom townhouse in December 2014 was also $250 p/w. This demonstrates that the Gladstone rental market has stabilised. A 3 bedroom townhouse had a median rent of $325 p/w in June 2015 down from $520 p/w in June 2013. Median rents dropped dramatically from June 2013 to June 2014.

Gladstone

Your Local Contact:

Mark Galway

0427 250 710



Units

In 2014 the biggest change in median rents was for 2 bedroom units in 2014. A 2-bedroom unit in June 2013 had a median rent of $420 p/w, which dropped to $280 p/w in June 2014. In June 2015 the median rent for a 2-bedroom unit was $240 p/w. The median rent for a 1 bedroom flat or unit has fallen from $310 p/w in June 2013 to $180 p/w in June 2015. For a 3-bedroom unit in June 2015, the median rent was $295 p/w, which is a significant decrease from $480 p/w in June 2013 (The Residential Tenancies Authority, 2014).

Houses

A 4-bedroom dwelling had a median rental value in June 2013 of $600 p/w, which fell significantly to $400 p/w in June 2014. A further decline in rent was seen for a 4-bedroom house in June 2015 where the median rent was $380 p/w. The median rent for a 3-bedroom house in June 2015 was $300 p/w, which fell from $335 p/w in June 2014 and $480 p/w in June 2013 (The Residential Tenancies Authority, 2014).

Gladstone…cont’d

Your Local Contact:

Mark Galway

0427 250 710



Current Rental Listings

Price Finder states that there are 7, 1 bedroom residential units currently listed for rent on the market within a 6 month listed period. The rental asking price for these 1 bedroom residential units ranges from $130 to $280 with a median rental asking price of $196. Currently the average number of days a 1 bedroom residential unit has been listed for rent on the market is 43 days, with the highest days listed reaching 118 days.

Currently there are 135, 2 bedroom residential units listed on the market for rent within a 6 month listed period (Price Finder, 2015). For a 2 bedroom residential unit the rental asking price ranges from $150 to $770 with a median rental asking price of $250. Currently the average number of days a 2 bedroom residential unit has been listed on the market for rent is 54 days, with the highest days listed reaching 172 days.

Currently there are 98, 3 bedroom residential units listed for rent on the market within a 6 month listed period (Price Finder, 2015). For a 3 bedroom residential unit, the rental asking price ranges from $170 to $650 with a median rental asking price of $322. Currently the average number of days a 3 bedroom residential unit has been listed for rent on the market is 53 days, with the highest days listed reaching 175 days.

Within the 6 month listed period, 265, 4 bedroom houses have been listed for rent. A range from $220 to $695 is the rental asking price for a 4 bedroom dwelling with a median rental asking price of $360. Currently the average number of days a 4-bedroom house has been listed for rent on the market is 48 days, with the highest days listed reaching 180 days.

Price Finder states that there are 119, 3 bedroom dwellings currently listed for rent on the market within a 6 month listed period. The rental asking price for a 3 bedroom house ranges from $160 to $480 with a median rental asking price of $300. Currently the average number of days a 3-bedroom house has been listed for rent on the market is 56 days, with the highest days listed reaching 180 days.

We predict the market will remain stable for the second half of 2015.

Gladstone…cont’d

Your Local Contact:

Mark Galway

0404 020 221



Cattle Market

Strong cattle prices are continuing to spark increased demand in the Queensland grazing property market. The Queensland Cattle Market Index is currently 304 points, which is up from 181 points last August (2014) or up by 68%.

Sales

Taroom district property ‘Yeovil’ has sold for $5.8 million including plant and equipment and stock. The property comprises 2,562 hectares of improved brigalow/scrub country with a smaller area of creek flats. The sale excluding plant and equipment and stock reflected approximately $2,150 per hectare bare ($870/acre).

The sale of the Sir Sidney Kidman 10 property aggregation of 11 million hectares has attracted strong interest according to the selling agent. The holding is still 98% owned by the Kidman family and is expected to make in excess of $300 million. The aggregation is being advertised as “the largest private, non-monarchical, non-state holding on earth”.

Rural

Your Local Contact:

Justin Robert Smith

07 4957 2821



Biloela

Your Local Contact:

Murray Davis

07 4995 6690

The residential market in the Callide Dawson region has continued its slow pace with only a handful of properties being reported as sold over the last month. These sales are indicating a current plateau in prices, however with limited demand at present, anyone trying to sell in the short term may have to accept lower offers.

The small resource driven communities have seen no significant increase in sales volumes with the continued pressure on values for those having to exit.

We are not aware of any commercial sales within the region over the last month and only a limited number of rural transactions have occurred. One of note is the sale of “Araluen” which is an 88 hectare grazing and irrigation property only 3 kilometres to the south east of Biloela with Burnett Highway frontage. This property sold after auction with two main bidders. The property comprises top quality Kroombit Creek alluvial country and has a 143 ML allocation within the Callide Irrigation Area. It is improved with a lowset dwelling set in attractive landscaping along with several sheds and a set of timber cattle yards. At the time of sale approximately 15 ha was established with Lucerne with a lease in place on the Lucerne area for another 17 months providing a regular income. The sale equated to approximately $9,000 per hectare on a fully improved and watered basis.



The Mackay market is a mixed bag at the moment offering some attractive purchase options together with the continuing low level of confidence. Some transactions of note are as follows:

Industrial Land –Silverton Court, Paget

This property has been sold under distressed circumstances under instructions from the mortgagee. The land area was 7,815 sqm and the allotment is located at the bottom of a cul de sac. The sale price negotiated was $800,000 and reflects a sale price per square metre of just $102. Property was acquired by a local purchaser. Sale price would appear low but the property was marketed for some time

Commercial Building – CBD location

We are aware of due diligence being undertaken on a prominent commercial building within the confines of the Mackay CBD. Purchase price has been indicated in the early $2 million mark with the purchase being negotiated by an owner occupier. The building is part leased with the owner’s intention to take up the current area that is vacant. Should this eventuate it will go a way to show a degree of confidence in the local market and hopefully spark some optimism.

Commercial Building – Fringe CBD location

A single level commercial building has been acquired as part of an ongoing concern with the agreed sale price being $920,000 for the freehold component of the contract. The building has an approximate floor area of 350 sqm and has a degree of onsite carparking which is an attractive feature of commercial property.

On the development front it is pleasing to say the Parkside Neighbourhood Shopping Complex is due to open on the 26th August 2015. The centre is a hive of activity with shopfitters everywhere!! The centre is reportedly 85% leased with the anchor tenant being Coles and is joined by Liquorland, a hairdresser, a newsagent and several eateries.

Harrup Park Country Club is also undergoing renovation at the moment with the development comprising of a function centre capable of housing 200 people. The function centre is attached to the existing structure and will provide open space for conferences, weddings etc, together with bars/toilets and pre-function area. Construction works are being undertaken by local contractors Woollams and is due for completion within the last quarter of this year. Additional floor area to be added is in the vicinity of some 914 sqm. Together with the additional capacity of some 61 on site carparks.

Mackay Commercial/Industrial

Your Local Contact:

Paul Krause

07 4957 2821



Airlie Beach

7/400 Shute Harbour Rd

Airlie Beach QLD 4802

Ph: (07) 4948 2966

Biloela

54 Callide St

Biloela QLD 4715

Ph: (07) 4995 6690

Gladstone

Shop 2, 190 Goondoon St

Gladstone QLD 4680

Ph: (07) 4972 1656

Wide Bay

5 March Lane

Maryborough QLD 4650

Ph: (07) 4123 2499

Mackay

8a River St

Mackay QLD 4740

Ph: (07) 4957 2821

Rockhampton

PO Box 708

Rockhampton QLD 4701

Ph: (07) 4927 0893

Central Queensland

Contact your local valuation & property advice expert today.

Opteon Central Queensland - opg.netopg.net/sig/OCQAugust2015.pdf · Visit our website Offices:...

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