Australia's cheapest spots beside the seaside

PORTFOLIO POINT: Oceanfront getaways for less than $150,000? A survey finds a few, often with names that would be unfamiliar to most buyers.
It's not just high-end property coastal property that's suffered during this downturn: Australia's least-expensive regional oceanfront suburbs have also recorded price drops, providing opportunities for investors looking for an affordable weekend getaway in a sleepy coastal hamlet.

The most affordable regional oceanfront suburbs are not well known or prestigious. Some are industrial towns, such as Port Pirie West in South Australia and Derby in Western Australia. Visitors to Loch Sport, the cheapest regional oceanfront town in Victoria, might need to develop a tolerance for mosquitoes.

But according to a study conducted by property information provider RP Data, it’s still possible to snap up a house in an oceanfront suburb for less than $150,000.

Some suburbs, such as Beechford on Tasmania’s north coast, are not far from a capital city. And according to RP Data senior analyst Cameron Kusher, towns such as Nambucca Heads in New South Wales and Cardwell in Queensland are not only affordable, but quite nice places.

In New South Wales, the median house price in Corindi Beach, just 29 kilometres from Coffs Harbour, is $272,500.

If Tasmania is more your style, the median price in Beechford, north of Launceston, is just $158,500.

Even cheaper, you can pick up a house in the South Australia’s Port Pirie West for $140,000. The town, north of Adelaide and east of Whyalla, is located near Nyrstar’s Port Pirie smelter.

But if you want to live on the coast in one-time boom states Queensland or Western Australia, prepare to pay a little more: the median house price in Halifax, 100 kilometres north of Townsville, is $200,000. In the south-west of Western Australia, the suburb of Withers, in Bunbury City, has a median house price of $270,000.

nAustralia’s most affordable oceanfront suburbs
State	Suburb	Median house price
New South Wales	Corindi Beach	$272,500
Victoria	Loch Sport	$149,250
Queensland	Halifax	$200,00
Western Australia	Withers	$270,000
South Australia	Port Pirie West	$140,000
Tasmania	Beechford	$158,500

Source: RP Data Property Pulse
Note: Northern Territory excluded on low levels of relevant sales

RP Data’s Cameron Kusher says that although house prices in the upmarket Palm Cove and Port Douglas in Queensland fell by 19.65% and 8.17% respectively in the October quarter, prices in the top 30 affordable regional oceanfront suburbs have held quite well.

“Some of them have done really well, and others probably haven’t done so well. You look at Port Albert in Victoria, which has fallen by 20%, but then you go Seaspray (also in Victoria) and it’s up 18.6%. Rocky Point in Queensland is up 20%, but then Port Macdonnell (in South Australia) is down 21%.

“Six of them have recorded over 10% price growth; 12 have recorded negative growth, and a lot of those negative growth figures are less than 10%,” Kusher says.

The fluctuations in the 12-month growth figures relate to the number of sales.(The most affordable regional oceanfront suburbs mostly recorded 20–30 sales over the 12 months to October, which makes the results more sensitive to individual property transactions.)

So is now a good time to buy? Kusher says it depends on what you’re looking for. The opportunities for capital growth may not be particularly strong, but for those looking for a coastal shack, it’s worth investigation.

“If you were looking for a seaside getaway that you can take your family to a couple of times a year at an affordable price, and you’ve got a spare $300,000 or less, you could do worse than buying into some of these areas,” he says.

nNSW’s top five
Suburb	Statistical Division	Number sold	Median price	12-month growth	Time on market (days)
Corindi Beach	Mid-North Coast	26	$272,500	9%	38
Sandy Beach	Mid-North Coast	36	$279,500	1.6%	87
Dalmeny	South Eastern	40	$280,00	-6.6%	91
Diamond Beach	Mid-North Coast	15	$282,000	-8.4%	NA
Nambucca Heads	Mid-North Coast	64	$283,750	-5.4%	99

Source: RP Data

Peter Kelaher, of Sydney's PK Property Search & Negotiators, is cautious on the merits of investing in these suburbs, suggesting there's better value closer to Sydney.

"Where you're best off buying in that price range at the moment is actually Budgewoi, which is an hour out of Sydney and near all the beaches. You can pick properties up for the low $200,000s. That is a great area: they are putting more infrastructure in there, you'll be able to rent it and it's not really known as a country town."

Kelaher has just returned from the mid-north Coast – four or five hours’ drive from Sydney – and says there are a few social problems up there, including high unemployment.

"No one is investing in infrastructure there," he says. "Those sorts of areas are going to be stimulated by lower prices and the first home buyer's grant, but the problem is unemployment is high so people don't necessarily have a deposit or a job that shows an income.”

nVictoria’s top five
Suburb	Statistical Division	Number sold	Median price	12-month growth	Time on market (days)
Loch Sport	East Gippsland	70	$149,250	2.2%	NA
Toora	Gippsland	18	$163,750	-1.9%	115
Golden Beach	East Gippsland	15	$165,000	13.8%	145
Seaspray	East Gippsland	15	$185,000	18.6%	65
Port Albert	Gippsland	15	$190,000	-20%	NA

Source: RP Data

Gerald Delany, director of upmarket real estate agents Kay & Burton, says the market in his area – the Mornington Peninsula – has fallen "marginally", but is still well above prices on the Victorian list.

"A couple of hundred thousand wouldn't get you anything on the Mornington Peninsula; you wouldn't even get into Phillip Island or Cowes for that. A block of land will cost you $300,000 on the Peninsula; you wouldn't buy under that."

nQueensland’s top five
Suburb	Statistical Division	Number sold	Median price	12-month growth	Time on market (days)
Halifax	Northern	13	$200,000	9.9%	70
Rocky Point	Far North	35	$238,130	20.2%	NA
Burnett Heads	Wide Bay-Burnett	44	$271,500	-0.2%	124
Elliott Heads	Wide Bay-Burnett	25	$285,000	-6.6%	97
Cardwell	Far North	13	$290,000	1.8%	103

Source: RP Data

Meighan Hetherington, of buyer’s agents Property Pursuit in Queensland, says the above list would be appropriate for people who “don’t necessarily want to be in among things.” She doesn’t see a lot of capital growth opportunities for the five areas listed, but reckons Cardwell – midway between Townsville and Cairns - is the pick of the bunch.

“If you’re looking purely at affordability for those five areas, then Cardwell would probably be your pick for a really lovely location. However, the downside to living in that North Queensland area is you can’t for some of summer use the ocean because of stingers, so it’s more of a good winter escape. Too hot, unable use the ocean in summer, but probably beautiful in winter,” she says.

Hetherington says there’s not terribly much going on in Halifax or Rocky Point, but Burnett Heads and Elliott Heads would probably provide the closest proximity to employment opportunities.

nWestern Australia’s top five
Suburb	Statistical Division	Number sold	Median price	12-month growth	Time on market (days)
Withers	South West	44	$270,000	-4.5%	167
Geraldton	Central	27	$339,000	9.4%	103
Derby	Kimberley	15	$365,000	15.9%	31
Sunset Beach	Central	14	$370,000	1.5%	73
Mandurah	South West	70	$382,500	-1.2%	80

Source: RP Data

Simon Moore, Head of Research at Hegney Property Group in Western Australia, says the Mandurah and Geraldton property markets were “significantly overbought” by speculative investors in 2006, causing prices to fall sharply over the past two years.

“Prices have fallen by up to 25%, giving investors and holiday home buyers the opportunity to buy into these areas at 2004-05 price levels.”

Withers in Bunbury also offers opportunities, Moore says, because it has a large resident population and demand for rental properties.

“Rental yields are comparatively high in relation to other regional locations and long-term demand should be strong due to significant development in the surrounding areas and the impact of the new Perth to Bunbury Highway,” he says.

nSouth Australia’s top five
Suburb	Statistical Division	Number sold	Median price	12-month growth	Time on market (days)
Port Pirie West	Northern	74	$140,000	14.5%	83
Ceduna	Eyre	36	$164,250	4.6%	56
Port Macdonnell	South East	22	$165,750	-21.1%	154
Clinton	Yorke and Lower North	16	$198,750	12.3%	118
Cape Jervis	Outer Adelaide	12	$206,00	-7.4%	96

Source: RP Data

nTasmania’s top five
Suburb	Statistical Division	Number sold	Median price	12-month growth	Time on market (days)
Beechford	Northern	10	$158,5 00	NA	NA
White Beach	Southern	17	$167,000	-11.2%	NA
George Town	Northern	48	$167,750	-2.9%	24
Strahan	Mersey-Lyell	24	$187,500	NA	21
East Devonport	Mersey-Lyell	59	$188,500	1.2%	47

Source: RP Data

So why did these particular suburbs make the list? Is there something inherently unattractive about them?

Kusher says isolation plays a part: “sea change” areas are generally located close to major cities, and while some of the suburbs on the lists are within 100 kilometres of major centres; they’re probably not the typical towns “sea changers” are attracted to.

“In Queensland, for example, a lot of these are further north than Mackay, whereas you think of the sea change areas around Mackay, Rockhampton and Bundaberg. In WA, Withers, Geraldton and Mandurah are pretty big cities, so that makes sense. In Tasmania, you’ve got East Devonport there, obviously part of Devonport. And Strahan is a reasonably large city for Tasmania.

“But then when you go to NSW and Victoria, those areas in Gippsland are fairly far away from any major centre. And in NSW, some of them are close to Coffs Harbour. Nambucca Heads is a reasonably sized town, but when you think of sea change areas in NSW you probably think of areas like Nelson Bay, upper end Newcastle or down past Illawarra.”

So what commonalities do the towns have? According to Kusher, the 30 suburbs seem to be “quiet, sleepside villages with few sales and a cheap price”.

“I think it’s a case of perhaps being overlooked,” he says. “Where we’ve seen sea change traditionally has all sort of gone to one area, (whereas these areas) haven’t really pushed forward. And making sea change areas popular is really dependent on governments allowing the release of land.

“If you look at the number of sales (in the list), it’s still quite constrained. Given the nature of these towns, maybe there’s a lot of pressure from the people that live there already not to allow greater amounts of land release because they don’t want a whole heap of people flooding in; they want to keep that quiet seaside village nature.”

Kusher doesn’t expect a rush of people heading towards the seaside.

“I think that people are going to continue to be fairly wary of where they spend their money and luxury prices like seaside homes or even people moving away for a sea change; I think you’ll see a slowdown for that in 2009.”

Instead, Kusher says “the real action” on the property market will be capital cities under $500,000 because of what the government’s done to encourage first-home buyers back in to the market.