Great Ocean Report July 2015

Each year we use our Great Ocean Report in July to look at the performance of the Surfcoast property market for the previous financial year. We have witnessed a very active market, resulting in low stock levels of property for sale as we write. There is obviously a seasonal element to this, being in the middle of winter, but overall buyer demand remains consistent this year on the back of low interest rates.

So let’s have a look at how each of the towns fared over the past financial year. It will come as no surprise that the larger the town, the more turnover occurred. The figures that we track each year are house sales. That is, free standing dwellings on their own title. We have not included land or unit sales. Free standing dwellings with a common driveway have been included. The median house price is the “middle” sale when all the sales are ranked in price order from lowest to highest.

So let’s start at the top:

Torquay recorded 206 house sales for the financial year, with a median house price of $585,000 and with a top sale of $2,000,000. The peak month was in February with 34 house sales recorded and there were 15 sales recorded above $1,000,000 for the 12 months. To give these sales figures some perspective, the total number of rateable properties in Torquay is 7777 (including land, units and apartments).

Jan Juc recorded 57 house sales with a median house price of $620,000 for the 14/15 financial year. The top sale for the year was $3,000,000 and there were 5 sales over $1,000,000. Jan Juc has 1986 rateable properties in total.

Anglesea recorded 111 house sales for the year with a median house price of $588,000. There were 12 house sales over $1m and a top sale of $2,350,000. Although the median house price was down slightly from the previous financial year, the number of house sales above $1m was up from the 9 sales in the previous financial year, as was the total number of house sales with 104 recorded in 2013/2014. Again, to give this context, there are 3140 rateable properties in Anglesea.

Aireys Inlet recoded 34 house sales for the financial year with a median house price of $623,500, which was almost identical to the previous year’s $625,000. The number of sales was well up from the previous years 25 and the top sale for the year was $1,875,000 with 4 sales over $1m. This is significant as there were no sales above $1m in the previous financial year. The median house price was balanced by 10 sales at or below $560,000 which is unusual. There are 1135 rateable properties in Aireys Inlet.

We have always grouped Fairhaven, Moggs Creek and Eastern View together because they are geographically similar, attract a similar buying demographic, but are also quite small in size with only a total of 306 rateable properties. There were 18 sales recorded for the year which is right on the average number of sales per annum over the past 15 years. The top sale for the year was $3,900,000 and there were 7 sales recorded over $1m including one other $3,000,000 transaction. The median house price was $782,000 which was well down from the previous year’s $995,000, but this is more a product of the small statistical sample than a reflection of the market.

Lorne had a very similar year to the previous year with 43 house sales recorded in each of those years. The median house price was also very similar at $795,000 down slightly from the previous year’s $810,000. There were 10 sales above $1m and the top house sale for the year was $1,950,000. As usual, there were a lot of apartment transactions recorded as Lorne has a lot of this type of property. There are 2268 rateable properties in Lorne.

When we look across our service areas we can see quite a divergence in buying demographics. As a generalisation, we see that the further we move way from Melbourne the more absentee lifestyle buyers we attract. Torquay and Jan Juc are attracting a much higher permanent population than Lorne is and this mix changes steadily between the two areas.

In terms of age demographics, we are also noticing some trends. In the more permanent areas, the buying demographic is quite wide spread ranging from first home buyers to retirees, whereas with the lifestyle areas the Baby Boomer demographic is still very dominant – however their motivations are changing. Whereas previously they were looking for a holiday house they are now positioning themselves for retirement. This means different things to different people. Some are cashing the holiday house in to fund their retirement, some are buying for their retirement and others are trading up to a better standard coastal property as they plan to spend more time there in the future and their old, basic holiday house is not suitable.

Interestingly, we have not seen the capital gains that much of the metropolitan markets have seen and this is for two clear reasons. With the exception of Torquay, we have seen very few rental investors as the yields do not compete with the city and this investor demand has been a major driver of the metropolitan markets in both Sydney and Melbourne. We also have not seen any of the Chinese money that has been a major driver in the inner eastern suburbs of Melbourne, which has traditionally been a major heartland of the buying demographic for coastal properties. This is not new however, as this disconnect between the two property markets started occurring in 2008 with the GFC and the change in immigration laws at that time.

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