Central Coast property values expected to remain steady in 2020: HTW residential
The real estate market of the Central Coast Region of New South Wales enjoyed a good year in 2019 and we don’t expect much changing for year 2020, according to the latest Herron Todd White (HTW) residential report.
The valuation firm asked their valuers to give an educated outlook on the residential market in their service areas in February.
"Of course there are many factors that may change this. The most obvious factor likely to affect the market is the bushfire disaster seen across the state.
"The Central Coast region has been affected by this, but to a much lower level than other regions. This means we can’t see a direct and significant effect on values and demand in the region," the valuation firm said.
It remains to be seen this early in the year what operational changes, if any, lenders and insurers will implement as a result of the bushfires, but if changes occur within their respective spaces, there will be an indirect effect on the market.
"There is of course, a similar scenario in many parts of the state, and the Central Coast region sits between two markets that have been particularly affected, the Sydney and Newcastle markets," the valuation firm commented.
Historically, the periods following significant events such as the devastating bushfires usually cause some disruption to the market and to a degree we do see this playing out in a period of consolidation - nothing new here.
"In Central Coast terms, the market is more likely to experience short term effects by excessive rainfall and flooding as we have seen in the past and if weather predictions prove correct, the region will have a lot of rain soon," the valuation firm added.
There weren’t any really identifiable standouts across the various market segments in 2019 and this is expected to be the case in 2020.
"We saw the completion of several residential unit complexes in 2019. Almost all of the individual units within these complexes were sold off the plan from as far back as 2016.
"As completion drew close and developers starting calling for settlements, we were instructed to provide current valuations for mortgage purposes," the valuation firm said.
In most cases, the values held with some increasing and on the odd occasion, a fall in value was noted.
Construction of new residential unit developments waned during the latter part of 2019 and there remains only a few developments still under construction, meaning that the heat of this market segment has eased and this should provide an opportunity for the consolidation of values in both new and older units, the latter of which did suffer slightly due to the preference for new stock.
The report notes general housing showed little of the effects of market disruptors seen in other regions during 2019 and from our perspective, it was pretty much a case of the market for established dwellings being steady throughout the year.
"We don’t see much changing in 2020 for this segment and no locations showing signs of emerging as the place to be," the valuation firm stated.
"Last year we offered that the peninsula suburbs of Woy Woy, Umina Beach and Ettalong Beach would see a reduction in values on the back of several extraordinarily strong years of growth.
"We couldn’t see the rise in values being sustained for long and to a degree, this occurred with some real estate agents referring to 2016 values as the new norm for this part of the region. Once again, we would suggest caution and well founded research when buying in these suburbs," the valuation firm said.
"If pushed to suggest an emerging market, then we suggest a look at the new estates around Berkeley Vale," the valuation firm noted.
The land is considered good quality and well priced. As new dwellings are established here, the values both within the estate and adjacent should benefit.
Considerable new home building activity remains a staple for the newer suburbs towards the northern end of the region. This includes the suburbs of Hamlyn Terrace and Wadalba.
Both suburbs provide well priced land with services close by and handy access to the M1 Motorway.
A 7 bedroom dual occupancy house in Hamlyn Terrace has recently been sold for $790,000.
The large house with a self-contained granny flat is situated at 37 Georgia Drive (pictured below).
It features multiple living and entertaining spaces, covered patio, swimming pool and side access for boat/caravan.
A current listing is a Wadalda four bedroom house priced between $520,000 to $570,000.
Located at 13 Terka Street (pictured below), the house comprises open living and dining spaces, three bedrooms, fourth bedroom or study and outdoor entertaining area.
The house is situated minutes to schools, shops, sporting grounds and hospital.
"We see a resilience to market pressures in these areas due to the relatively solid levels of affordability," the valuation firm suggested.
"At an operational level, our interaction with lenders and mortgage brokers increased during 2019. This follows an extended period of limited interaction with the placement of intermediary parties being the link between lenders and service providers."
While that link correctly remains present, direct discussion has proven just as successful as lenders seek a more detailed understanding of what’s happening in their local markets to assist in paving their way forward.
As with the last year, there is a reasonably good level of market confidence present, with indications that this confidence will wane slightly in some segments as the year progresses.
"If previous cycles repeat themselves, we can expect to see a period of reduced buy and sell activity," the valuation firm said.
Obvious determinants of this will include the cost of financing, stock availability and of course, the presence or absence of buyers and sellers.
Less obvious at this early stage but perhaps more influencing will be effects of natural disasters and as always, the role of the media.
"Also as with 2019, we see 2020 proving to be an interesting one for local real estate following the market peaking in most segments.
"We say interesting because the traditionally reliable and predictive market indicators have or are likely to be different to those seen in previous, fairly predictive cycles. The activity and rises seen until very recently occurred over an extended and sustained period as opposed to previous cycles."
