Blogs

Cape York Wide open spaces and fresh country air.

In today’s times as the world gets smaller, faster, and overcrowded, many often wonder what it would be like to live in paradise away from all the stress. In seeking this outcome in 1988 a family-owned nature retreat was established at the northern end of what was known then as the Great Daintree Rainforest. In those days when Cairns was still small, an adventure further north came with its hardships, namely the tyranny of distance. Over the past 30 years, as the roads improved and services like telephone and electricity became available, the remoteness of such became less and less. Conventional access is now easy and available to all.

Mulligan Highway to Cooktown

Mungumby Lodge established in 1988 has developed over this time an enviable reputation as being one of North Queensland’s more unique lodge experiences. The Wildlife, the ambiance, and the setting became the highlights and supported business growth. There are many lodges throughout Australia yet only a few manage to develop, maintain and grow a reputation that lasts for years into the future. Sir David Attenborough sought out Mungumby Lodge and used the property in 2010 for his well-known documentary “First Life”.  Today despite COVID-19 impacts the lodge remains well-positioned within many tour operator catalogues, distribution systems, on the internet, and online booking engines. There is still loads of room to grow and lots of potential nationally and internationally. The vendors post-COVID made major changes to operations and rooms to better accommodate domestic travelers in the temporary absence of international clients. In 2021 tour operator bookings are again growing and referrals remain high. In 2021 as more roads are further improved and tarseal becomes the new norm, a new client is able to easily access Mungumby Lodge as well as get off the beaten track. Not too long ago the journey was reserved for the adventurous few driving 4×4’s, today clients arrive in sports cars, motorbikes, and conventional vehicles.

Cooktown just north of Mungumby Lodge is in positive mode and focused on growth for the future. For the past 20 years, the owners of the lodge have and continue to play an active role in tourism business development for the region. There are a number of projects forecasted and more on the drawing board. The Cooktown waterfront is undergoing a major upgrade and beautification program, private school facilities are now available. A $200million wind farm power plant is soon underway at Lakeland (35 minutes from Mungumby Lodge) in 2021 along with proposed new irrigation dams giving water security to support the new agriculture expansion. Queensland Health will be spending $65 million redeveloping the hospital as the medical hub for Cape York to relieve the conjected Cairns Based Hospital. There are new Maternity and birthing services at Cooktown Hospital in place along with minor surgery, dialysis, and other treatments. Galalar Silica Sand Project north of Cooktown. Due to its location, it is proposed that they operate out of Cooktown, and will employ FIFO along with local workers who will be based on-site transiting from the Cooktown region. The COOK Shire is developing at a sustainable pace and still affords those within the very paradise they came to seek out.

In the past 33 years, Mungumby Lodge has only had two owners. Both have maintained these quality structures and developed the lodge business, reputation, and market position it enjoys today. The property offers good revenues, freehold land, an abundance of fresh gravity feed water a great lifestyle, and a work pace set by you. 95% of the lodge guests are active adventurous types from a broad range of demographics. Due to this, the compatibility of guest and staff is amazing, the team have loads of fun and are reminded every day by the guests that we have something very special.

For the past 15 years, the accommodation business has grown each year. This growth has accelerated over the past 5 years due to access, reputation, and infrastructure until COVID-19. Despite the GFC and COVID-19, the company has managed to reboot whilst maintaining its market position and initiating the next phase of Mungumby Lodge. Room for expansion has been created, additionally the grounds, infrastructure, and facilities are constantly being improved. This business is best suited to an owner-operator or a company seeking to expand into Cape York an area that is the focus of many wishing to escape the confines of the suburbs and regular lockdowns post COVID-19.

The current owners of Mungumby Lodge seek expressions of interest in the lodge property, business, and chattels. Expressions of interest for over $1.500,000.00 are sought and ongoing marketing, distribution, and logistical support is available as part of the package. The owners of the company have diversified their interests and without urgency are preparing to implement their next move. The enthusiasm and desire of this family are to see the lodge expand and grow and the business remains strong. Therefore incoming owners will be supported to ensure the future of the business and property remains secure. Live the dream and own this unique business in the center of paradise, surrounded by other top experience destinations.

Mungumby Lodge from above

Property pricing and getting it right from the start!

The prices realised for houses in Far North Queensland particularly Cairns, Port Douglas & the Atherton Tablelands in 2021-22 were some of the best ever seen. Each month the market moved and vendors, sellers, agents & even valuers had to hold on tight for the ride. Sellers were in a position of being able to test the market with ambitious prices. More often than not these punts worked to their advantage and in many cases were exceeded.

The REIQ Zone chair for Cairns, Tom Quaid suggests that “despite the market remaining buoyant, many sellers state-wide are missing the mark when it comes to setting the right price for their property. An error that is becoming more expensive as we head into an error of uncertainty. The pace of growth has slowed and expectations need a reset. This is not to say the market has gone backward as it has not. With price consolidation comes the need to be realistic. So more than any time in the last 2 years getting the price upfront or responding quickly to feedback from buyers and agents” as your campaign progresses. No enquiry or feedback is also feedback in itself. If you don’t react to these signals your property could be sitting on the market for some time.

Cooktown Charlotte Street

The prices realised for houses in Far North Queensland particularly Cairns, Port Douglas & the Atherton Tablelands in 2021-22 were some of the best ever seen. Each month the market moved and vendors, sellers, agents & even valuers had to strap in for the ride. Sellers were in a position of being able to test the market with ambitious prices. More often than not these punts worked to their advantage and in many cases were exceeded.

Tempering expectations is made easy today, as at our fingertips are numerous online tools. These need to be used to substantiate your estimated price on your property. You can be sure buyers are using these tools to assess their options when buying. This is why it is important to get your price right from the start!

A year in Australian property unlike any other!

Successive interest rate rises, surging inflation, low consumer sentiment and deteriorating affordability drove a shift in Australia’s 2022 housing market performance, CoreLogic’s report reveals.

When summing up the year that was, CoreLogic Head of Research Eliza Owen highlighted two distinct characteristics of capital growth trends in 2022, with the first being that not all housing markets were uniformly impacted by market headwinds.

“More expensive markets tended to see sharper declines, while the more affordable segment of the market where buyers typically do not have to extend themselves as much to buy into, saw greater resilience to increases in interest rates,” she said.

“The second trend is the pace of decline has been slowing on a broad basis since September. While this may be seen as a positive by some, there is still a risk of the decline re-accelerating in the year ahead.”

CoreLogic Economist, Kaytlin Ezzy, added a prominent theme was the Australian property market’s seismic shift in conditions in the space of 12 months.

Over the year to November, national housing values fell -3.2%, driven by an annual decline in capital city dwelling values of -5.2%, while regional dwelling values rose by 3.3% over the same period.

The estimated total value of residential real estate decreased from $9.6 trillion in December 2021 to $9.4 trillion in November 2022. Estimated annual sales declined -13.3% compared to the year to November 2021, with approximately 535,000 homes sold nationally.

Market Outlook – 2023 crystal ball

One of the distinctive features of capital growth in 2022 was a slowdown in the pace of decline toward the end of the year. National value falls eased to -1.0% in November, following the steep monthly falls of -1.6% in August.

Ms Owen said although declines have been slowing, suggesting we may have moved past the peak home value declines, further rate rises are anticipated in the early months of 2023, which could cause the rate of decline to pick up speed once more.

“As we move into 2023, there continues to be a mix of headwinds and tailwinds for housing market performance,” she said.

“With expectations that the bulk of the rate tightening cycle occurred in 2022, housing value declines could find a floor in the new year. However, the extent of the floor in values could be further weighed down by mortgage serviceability risks, particularly for those rolling out of record-low fixed mortgage rates through the second half of year.

“But unemployment levels remain at historic lows, which plays a role in serviceability, helping to keep a lid on mortgage arrears. On top of that, strong rental markets and improving affordability from the point of falling values, may entice investors and first home buyers into the market, underpinning a recovery in buyer activity in the second half of 2023, when the cash rate stabilises.”

The above is extracted from the CoreLogic yearly “Best of the Best” report. We did not include the report as a whole as it is primarily focused on capital cities, our interest is regional and national. Read the full report HERE

As the property downturn across more Australian housing markets, both buyer and seller activity has softened

by Eliza Owen – CoreLogic – Head of Residential Research Australia

However, demand for housing finance across owner occupiers that are not first homebuyers (i.e., subsequent buyers defined as upgraders, movers and downsizers) appears to be fairly resilient in the rising rate environment.

Using ABS housing finance data to July, we can see how different buyer cohorts are reacting to the market downturn. Figure 1 compares the value of housing finance secured for the three main buyer classifications: first homebuyers, subsequent buyers and investors.

The chart shows housing finance secured by each group relative to April 2022, when national home values peaked. Since the rate tightening cycle started in May, investors and first homebuyers have seen much faster declines in housing finance secured than subsequent buyers.

This may be because subsequent buyers are less sensitive to lifts in interest rates. Using the sale of an existing home to fund their next home purchase, subsequent home buyers would likely need to take out less debt than first homebuyers, thus being less affected by rate rises.

Meanwhile, investors are likely to be more sensitive to a lift in rate rises. Although investors can offset the expense of higher interest rate payments as a tax deduction, investors are typically more leveraged than owner occupiers, and have inherently higher mortgage rates.

How have buyer cohorts behaved in the past?

Figure 2 (see below link to full article) looks at how lending volumes among the different cohorts have changed amid historic downturns since 2004 (where the ABS lending data series commences 2003).

The main difference between the buyer types over historic downswings is that first homebuyer demand for finance has traditionally been more resilient through downswings, with subtler declines in demand, and during some periods, increases. Subsequent homebuyers and investors have seen a more distinct decline in demand for housing finance initially through downswings.

For the full article see https://www.corelogic.com.au/news-research/news/2022/how-different-buyers-react-to-the-housing-market-downturn?utm_medium=email&utm_source=newsletter&utm_campaign=20220919_propertypulse

Higher interest rates and high inflation weighs further on housing demand

A really interesting article by Tim Lawless of CoreLogic regarding interest rates, inflation and demand. In Cooktown we have seen a reduction in general enquiries but sales remain static which indicates that our property market did not quite heat up like properties in the southern metro regions.

Here is a link to the full article here https://www.corelogic.com.au/news-research/news/2022/higher-interest-rates-and-high-inflation-to-weigh-further-on-housing-demand

When to call a peak in housing values

Australian housing values grew 22.1% last year and the market is showing signs this extraordinary rate of growth – not seen since the 1980s – is slowing across most of the capital cities.

Yet as the rate of dwelling value appreciation slows, capital city and broad ‘rest of state’ markets are yet to peak, causing plenty of speculation about whether this will occur in 2022 and mark the start of a downturn. 

CoreLogic’s Research Director Tim Lawless explains when a market has peaked, the biggest factors impacting Australia’s housing in 2022 and the trends property watchers should be keeping an eye on this year.
 
When to call a peak in housing values

“To categorise a market peak across a region, we would generally be looking for a consistent trend in negative monthly movements,” Mr Lawless says.

“To date, the quarterly trend remains positive across the major regions, with the only exception being Darwin houses, which is the only capital city housing sector to record a negative quarterly change. 

“The Darwin reading can be more volatile than other cities due to the small size of the market, so it may be too early to call a peak in this market even though the quarterly growth rate has turned negative.”
  
Peak vs peak rate of growth

“Although we can’t see any evidence that specific housing markets have peaked, it is clear that most markets have moved through a peak rate of growth,” Mr Lawless says.

“What I mean by that is the point at which markets achieved their biggest monthly growth rate. We saw most of the capitals moved through a peak rate of growth around March last year.”

•    Sydney’s monthly growth rate peaked at 3.7% in March and has since reduced to 0.3%
•    Melbourne’s monthly growth rate peaked at 2.4% in March, reducing to -0.1% in December (the first monthly decline since Oct 2020)
•    Perth’s monthly growth rate peaked at 2.7% in February.  After recording only a single month of decline (-0.1% in Oct 2021) the monthly rate of growth has reaccelerated to reach 0.4% in December
•    Hobart’s monthly growth rate peaked at 3.3% in March and dropped to 1.0% in December
•    Darwin moved through a peak rate of monthly growth in April at 2.7% (0.6% in December)
•    Canberra moved through a monthly peak in March at 2.8% (0.9% in December)

Market exceptions and future expectations

“The only broad regions avoiding a slowdown in the pace of growth in housing values are Brisbane, Adelaide and regional Queensland,” Mr Lawless says.

“These markets are benefitting from a healthier level of affordability compared with the largest capitals along with a positive demographic trend and consistently low advertised stock levels.” 

“We could see our two biggest capital city markets Sydney and Melbourne hit their peak later this year although the timing is highly uncertain and depends on a broad range of influences.”

Three main factors that determine when and if a market peak will occur

“There are a lot of moving parts that will affect the trajectory of housing outcomes,” Mr Lawless says.  

The three biggest factors to impact market movements are: 
•    Policy-related factors such as interest rates and credit availability 
•    Market factors like the trend in advertised stock levels and housing affordability 
•    Economic factors such as labour market conditions and wages growth

“Arguably, the surge in COVID cases associated with the Omicron variant could push some of these policy tightening decisions back, with APRA or the RBA unlikely to tighten their policy settings with so much uncertainty associated with the latest case numbers,” Mr Lawless says.

“There is also some downside risk from a delayed economic recovery associated with less spending activity and heighted uncertainty, although a slower than forecast economic recovery implies rates would stay lower for longer.” 

Key signals that a market is approaching its peak

“Normally, housing growth trends will gradually slow before moving into a correction phase, which is what we are seeing at the moment. However, this isn’t always the case. During periods of shock such as the GFC or early in the pandemic, housing trends turned quite sharply into negative territory,” Mr Lawless says.

Other signs to watch for include:
•    rising advertised stock levels
•    affordability constraints
•    weakening auction clearance rates
•    softening vendor metrics such as longer days on market and larger levels of discounting

“It’s fair to say we are currently seeing a softening in all of these metrics, albeit from an historically high base,” Mr Lawless says.

“We also consider macro factors, which could have an impact on housing demand such as the potential for higher interest rates or tighter credit policies. Both of these factors have a high level of uncertainty at the moment, especially considering the latest wave of COVID cases associated with Omicron which could weigh down economic activity.”

Jan13_2022_PropertyPulse_1.JPG

What to expect following a market peak

“Once a market peaks, the typical trend is that values will experience a period of decline,” Mr Lawless says.

“The duration and severity of the decline is dependent on a broad range of both macro and micro factors.”
 
Since the late 1980s, Australia has experienced national downturns that have ranged in severity from a 1.0% peak to trough decline in 2015-16, a temporary correction following the first round of credit tightening via APRA’s 10% speed limit on investment lending, to the most recent 8.4% decline experienced during the 2017-19 downturn.

At a capital city level, the most severe downturns have followed periods of exuberance such as the mining infrastructure boom in Perth and Darwin where housing values in Perth fell by 20.0% over 64 months (moving through a peak in June 2014 and finding a floor in October 2019). 

In Darwin, dwelling values fell 32.7% over 69 months (May 2014 to February 2020), although both downturns were preceded by a spectacular upswing in values. 

Jan13_2022_PropertyPulse.JPG

The above article is 100% from CoreLogic the national real estate data organisation RP Data.

https://www.corelogic.com.au/news/peak-peaking-peaked-how-read-australias-housing-market?utm_medium=email&utm_source=newsletter&utm_campaign=20220117_propertypulse

Housing values end the year 22.1% higher with the pace of gains continuing to soften as multi-speed conditions emerge – Corelogic

Australian housing values were 1.0% higher in December, slowing from a 1.3% rise in November, continuing the softening trend in the monthly growth rate that has been evident since the national index moved through a cyclical high of 2.8% growth in March 2021.

As dwelling value appreciation slows, conditions are becoming more diverse amongst the capital cities and regional areas of Australia.  Across the capitals, the monthly change ranged from a 0.1% fall in Melbourne housing values (the first month-on-month fall in Melbourne housing values since October 2020), through to a 2.9% surge in Brisbane dwelling values. 

Brisbane and Adelaide, along with regional Queensland, are the only broad regions where there is no evidence of value growth slowing just yet, with the monthly rate of growth reaching a new cyclical high in December.

CoreLogic’s Research Director Tim Lawless said: “These regions show less of an affordability challenge relative to the larger capitals, as well as better support for housing demand with Queensland, in particular, showing strong interstate migration. Additionally, we haven’t seen the same level of supply response seen in other regions, with the trend in advertised supply remaining well below average in these markets.”

On the other end of the spectrum, momentum has slowed quite sharply in Melbourne and Sydney dwelling markets, with both cities recording the softest monthly reading since October 2020.  

“A surge in freshly advertised listings through December has been a key factor in taking some heat out of the Melbourne and Sydney housing markets, along with some demand headwinds caused by significant affordability constraints and negative interstate migration,” Mr Lawless said.

The full article from Tim Lawless at Corelogic RP Data can be read here!

Australian housing values

Where does your investment sit in the big picture?

Australian housing values increased a further 1.6% in July, according to CoreLogic’s national home value index. The latest rise takes housing values 14.1% higher over the first seven months of the year and 16.1% higher over the past twelve months. Is the growth cycle tapering as house buying becomes less affordable?

Read the full article HERE

Download the Corelogic Hedonic Home Value Index HERE

Out now! Winter Newletter 2021

Our winter newsletter offers some interesting property offers, and insights to what happening around Cooktown. The property market is performing strongly over the past 6 months due to additional employment opportunities matched with being one of the best regions in Australia to live. This is the Great Barrier Reef & Rainforest Coast!

Cooktown property for sale

Let your home tell a story!

Your home needs to tell a story to potential buyers and you can stage it without all the big expenses or pay a staging expert to do this for you. Many with some intuition can do it themselves. A home’s value starts on the inside then works outwards. In essence, a good clean-up of the grounds makes for a very inviting welcome.

To create an uninterrupted flow through your home and garden with spaces to pause is important. Give buyers a potential experience, and to do this you need to think about it. Set up your staging so people are able to stop taking in before moving on to the next space, all in continuity. Spaces need to complement each other, avoiding glaring clashes of taste or flow.

It is important the buyer gets a feel for your property and can see themselves in each space to imagine what their daily routine takes them to and how would they feel doing this in that space. An arrangement of striking flowers gives time for reflection, a stop, and is likely to enhance the area it is surrounded by. Making your home liveable and inviting for inspection are one of the most powerful marketing tools one can use. Especially when working with your agent, to present the property to the best of its ability. It is quite possibly your largest asset, style it well!

Styling your home is the key to place a home on its best foot. For many to achieve this without the burden of cost is to apply time, pack up and de-clutter your place. Clear off the kitchen benches cupboard items and generally open the place up.  Still continue to live there in preparation for your next journey, yet through the declutter, allow buyers to see their own belongings in each space. This also allows for a better building inspection for potential buyers or master builders inspecting any building prior to finalising a transaction.