NSW Central Coast may see slowdown after reaching peak of property clock: HTW

NSW Central Coast may see slowdown after reaching peak of property clock: HTW
NSW Central Coast may see slowdown after reaching peak of property clock: HTW

NSW Central Coast was at the top of the residential property clock for houses in valuation firm Herron Todd White's latest report - a simple broad brush means to suggest where property markets are as at February 2016 - and a slowdown might be expected.

Although the mechanics of the Central Coast region are distinct, the local happenings are influenced by markets in neighbouring regions.

Sydney is generally considered as the central hub with a direct effect on all other regional markets within its radius.

The Central Coast’s strong market in 2015 was undoubtedly underpinned by Sydney-based buyers finding themselves unable to compete in the Sydney market. This resulted in better than average rises in property values across the region as well publicised.

This link is, therefore, proven, say HTW.

The predictions for 2016 are well publicised, with some analysts expecting ongoing increases in property values, others saying the market will plateau while some predict falling market values.

Each scenario has the potential to emerge and what will eventuate will most likely be the result of government fiscal policy, general economic forces, lending practices and whatever the media tells us.

After such a strong year for the period leading to October, the year ended with a bit of a whimper for the region’s market. Sales volumes fell somewhat and there were no continuing increases in values.

Some points of note though:

• The sudden departure of Asian buyers having a noticeable effect on sale volumes;

• Purchase prices being nearer and sometimes below indicated asking prices as opposed to new

records being set every other day;

• Buyers being a little more selective and acting with less urgency;

• The much hyped talk of new residential unit developments in Gosford and other regionally

significant developments falling away on whispers that presales and interest were less than expected

and project finance was difficult to secure;

• Increased positivity in the retail sector that had been missing for the past several end of year

periods.

So, what to expect for the NSW Central Coast region for 2016?

If previous property cycles are to be repeated, then the region’s market is expected to slow as one property cycle ends and another starts.

The market has been at its peak for some time and a slowdown may be round the corner, but the peak lasted longer than expectations, according to HTW.

This is the main difference between this cycle which has been building slowly by comparison over several years and is more controlled as opposed to previous cycles which experienced faster rises over shorter periods, the report said.

According to HTW, while some of the region’s 160 suburbs will see a fall in values this year, most will continue to trade close to or near current values, but with reduced volumes.

Areas likely to see a drop in value will be those where values increased well beyond comfortable levels. This include Umina Beach and Woy Woy where values have risen extraordinarily (between 47% and 49% over the past three years) to the point where they are now in direct competition with some Sydney suburbs and a wane in demand seems inevitable as buyers switch their attention to other suburbs.

In Wyoming and Kariong values have risen more than 10% over a 12-month period and need time to settle down again.

Something for buyers to be wary of is the unit market in Gosford where close to 700 units have been approved recently. Many sites are still in the pre-construction phase and if too many start and finish in a short time frame, then there might be an oversupply situation.

The median house price in Gosford was $570,000 while for units it was $365,000, according to RP Data.

 A recent apartment Property Observer found on the market on realestate.com.au was Unit 5 at 75/77 Faunce Street (above) for $435,000.

Another sign that confidence has returned to the market is the presence of buyers at the higher end of the region’s value range. Absent for some time, some say the return of these buyers provides a restorative factor in the market, add HTW.

Tags: 
Property market Gosford

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