High rental demand makes Coffs Harbour an attractive investment: HTW

The Coffs Coast district has a fairly low economic base with a limited amount of high paying work available, according to Herron Todd White’s (HTW) latest monthly market report.

The property advisory firm says that the majority of the pressure for property is on the affordable sub-$500,000 sector.

At this price point, the majority of purchasers are investors and first home buyers or to a lesser extent people locating to the area.

Rental demand is high which translates to strong rental returns making Coffs Harbour an attractive place for investors.

Typically Coffs has been a fairly transient community which is why rental demand is high.

Recent major infrastructure upgrades primarily centred around the Pacific Motorway to the north and south of Coffs has seen a steady influx of road workers over the past five to 10 years.

These workers are transient and slowly moving away from Coffs Harbour currently working to the north on the Corrindi Beach to Ballina upgrade and south at Warrell Creek.

Although this demand is slowly shifting away the planned Coffs Harbour bypass which is expected to start some time in the next five to six years will see these workers returning and increasing pressure on future rental demand.

HTW observed that homes under $500,000 are still reachable in Coffs Harbour.

"What do we expect to buy for under $500,000?" the report asked. "Increasingly less for your money, however, the median price for a home is currently around $430,000 which buys you a three to four bedroom home, probably in the 10 to 40 year age bracket and located within good proximity of beaches, schools and all major services."

There is a vast array of properties available for sale within the Coffs Coast region however more affordable localities can offer the same type of property for less.

For example, for the same three to four bedroom home in Nambucca Heads to the south, you will be looking to pay around the $330,000 mark. One example would be a three bedroom home at 41 Old Coast Road (pictured above) that was for sale for $330,000 and sold at $325,000.

Conversely, HTW advised the slowest price point is the prestige market ($1 million plus) which is dependent upon high net wealth individuals.

These are limited in the local market with prospective purchasers generally coming from Sydney or out of town.

The difficult global economic conditions over the GFC period resulted in a reduced number of buyers seeking properties in this value range and location.

There are positive signs that the market has turned upwards for prestige property with improved conditions over 2016.

Sales activity for residential product between $1 million and $1.3 million increased although property over $1.5 million is still thinly traded with selling periods in excess of 12 months generally expected.

This market improvement is being experienced in the more traditional sought after beach locations such as Sawtell, The Jetty, Diggers Beach, Korora, Sapphire Beach and Woolgoolga.

Herron Todd White noted that Coffs Harbour's market is largely dependable upon economic conditions in NSW.

"We note this market is dependent upon the greater economic conditions throughout New South Wales and more specifically the metropolitan markets at the time of sale," said the report.