NSW South Coast - Shoalhaven

Discussion in 'Where to Buy' started by Azazel, 6th Jul, 2015.

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  1. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Yep I did a waterfront reserve type thing similar to what you described not long ago down in Congo - we beat 2 other Canberra buyers at auction, but the buying activity is still strong to be sure for that kind of thing. The boomers are coming with cash so the credit tightening appears to have impacted that market less than others. Moruya, Batemans Bayt, Manyana all in my patch no probs. The quiet pockets sure are nice :)
     
  2. radioactive

    radioactive Well-Known Member

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    I wouldn't consider this category of the population as the major base for local housing economy. I would personally focus on the local level macros that indicate the economy is growing and sustainable and there is a supply-demand mismatch.(where the wealth is created)
     
  3. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Hi @radioactive I don't disagree with your point but remember that quote was from back in 2016 and I was comparing the Shoalhaven to a mining town, which is more extremely based around 1 industry or employer and tends to get a more specific demographic arriving. Compared to a mining town I maintain that we are getting more diverse and sustainable population growth. Various posts in this thread since then outline the economic drivers including Defence spending over time, major transport infrastructure projects and the recently announced $400m+ hospital rebuild. I would place those things in the category of local projects which can move the needle of supply and demand.

    However it is importan to note that the supply demand mismatch in a given market can also be shifted from the outside - as in locally the case of baby boomers arriving on the coast and buying the beach houses, we have seen some $600k markets move to $1m plus for this very reason without an obvious local economic driver driving wage growth of local employees to justify that jump. The point is when new people arrive with fresh $ in a location they move the needle too.

    Finding the balance of what to measure, applying the weighting of internal and external trends is probably somewhat of an art. For me the main point is to spot them early enough to ride the trend.
     
  4. radioactive

    radioactive Well-Known Member

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    However it is importan to note that the supply demand mismatch in a given market can also be shifted from the outside - as in locally the case of baby boomers arriving on the coast and buying the beach houses, we have seen some $600k markets move to $1m plus for this very reason without an obvious local economic driver driving wage growth of local employees to justify that jump. The point is when new people arrive with fresh $ in a location they move the needle too.

    Finding the balance of what to measure, applying the weighting of internal and external trends is probably somewhat of an art. For me the main point is to spot them early enough to ride the trend.[/QUOTE]


    Thanks for providing a very rational view. I really like your strategy of riding the trend(an efficient way to make money in investments). I see your POV regarding the demand side of the equation.
    How is the supply side? I have heard that new homes are being constructed left and right of Nowra. I believe that "scarcity" and "high demand" by the "right" demographics determine the level of capital growth.
     
  5. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Sorry @radioactive I missed this being off work in the festive season. The available supply is tiny compared to larger markets like Western Sydney and/or Melbourn's fringes. There is some land available on the fringes of Nowra but the market prices and costs to develop mean it is only proceeding slowly. There is good demand and prices for infill development closer to town as people are more and more placing an extra value on convenience to the town cbd (ie cafes shops etc). If you think about the number of construction (and later health) workers needed for the hospital it is enough to create its own demand and suck up available supply. The coastal enclaves from Kiama, Gerringon, and south have no oversupply close the water (the opposite) like Culburra Beach - no large scale developments of land to speak off currently available there either. If they do come (there are one or two in the pipeline doing environmental wrangling) they will be priced high so I see no detriment to buying and owning more affordable homes closer to the town or more premium ones if closer to the water.
     
  6. DeJ

    DeJ Well-Known Member

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    Gday @BuyersAgent
    Are you able to give a bit of an update with what's happening in the moderately priced areas around Jervis Bay?
    Thanks in advance :)
     
  7. BuyersAgent

    BuyersAgent Well-Known Member Business Member

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    Well the coast from Berry down to Batemans Bay is patchy, some areas have seen up to 8% pull back from peak but more commonly in the 5-6% range (after some very substantial growth for a few years so a pretty standard breather I would say). The bargains are there if you are shopping, mainly motivated vendors who are totally committed to selling for personal reasons. The trick is getting agents to trust you enough to tell you that. I picked up recent deals with greater than 12% discounts to fair price (more from original ask price) when agents fessed up and told me the family situation and said they just needed a deal done. 18 months ago those discounts were not possible.

    On the other hand I have had friends sell decent stock who were in no hurry and after waiting 2-3 months they got their full price. Boomers are still moving down. Young families are still showing up having left Sydney. Locals never stopped buying locally. Holiday home buyers are still purchasing (albeit with a more bargain hunter mindset).

    The agent network I have all say the same thing, December January was dead as a doornail and their worst patch for 6-8years - but enquiries rose in Feb and are gradually rising. I am seeing competition again on my client purchases after being the only buyer around for a while. The road expansion is still under construction. The hospital expansion is still coming. Locals are feeling more bullish and buyant on the whole with the real estate market lagging that but not much.

    All in all - quality stock is in demand but feel free to make cheeky offers if it suits you to buy, I actually don't think prices will fall down here any more unless we have further macro finance/policy pain. IE if Labor gets in and the entire nation drops another 5% then we may not be immune to that, but locally I see more strength than weakness. Be careful to buy stock that is in good streets and avoid lemons etc - you want stuff close to water and less generic stuff further back. I suggest buying if you are happy to hold at least 5 years in this market as the next 12 months may not see quick/easy selling. The longer term gains are there for the bold I believe.
     
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  8. DeJ

    DeJ Well-Known Member

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    Hi Matt, thanks for taking to time to write a comprehensive snapshot of what you see is happening in the area!
    Much appreciated.
     
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  9. Property Guts

    Property Guts Well-Known Member

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    great comments Matt, i would agree with all.
    i would add, around the Milton/Ulladulla/Dolphin Point stretch i notice there has been a sudden surge of sub-divided land coming onto the market, after years of a shortage of home lots. I think this sudden surge in supply will outstrip demand in the short term, we might see some discounting of land asking prices. But as Matt says, superior locations, eg. close to beach/water/lake are holding their prices. Long term - i see great value in the area. So do Coles/Woolies and Aldi - because they all set up centrally in Ulladulla.
     
  10. Alex123711

    Alex123711 Well-Known Member

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    Any thoughts on Shoalhaven for an IP? Which areas would be best? Would airbnb work in these areas?