Investors can thrive in evolving "old" areas like Redcliffe

By Bob Wilson, 26th February 2008

The near-Brisbane coastal community of Redcliffe City could provide the best opportunity yet for younger home buyers looking for the demographic swing that has happened in many inner-city suburbs.

Redcliffe is a settlement of 51,000 people on a peninsula separated from the Brisbane mainland by a 2.7km bridge, which is due for an upgrade.

This is an older settlement with, until recently, a static population which is ageing faster than the Australian average. The 2006 Census revealed the median age of Redcliffe residents as 42 (Australia's median age is 37). Demographer Bernard Salt's population study estimated that more than one million people will join the 65 to 74 age group by 2021, while the numbers of people in their 70s will double.

Redcliffe has similar demographics to the Mornington Peninsula town of Rosebud, where the Census revealed a median age of 49 (42% of the population is aged 60 and over). Just over half of Redcliffe's population is aged between 40 and 60, with 27% aged 60 or over.

Rosebud's population comprises 34% lone person households (Australian average is 23%). Redcliffe's lone person household quota, at 33%, is also above the national average.

In both cases, we see opportunities for young families to come into older suburbs to replace the older generation as they move on. The predominantly older houses will then be progressively renovated, which lifts property values over time.

Housing sales had stagnated in Redcliffe City until 2003, but since then sales have charted steadily higher. According to PRDnationwide research, the median house price has increased by an average 14.6% per annum over the past five years, which is the second-highest growth rate amongst four contiguous areas. The median increase in neighbouring Pine Rivers Shire was 15%, Brisbane City achieved 12.5%, and the Sunshine Coast 14% over the five-year period.

During the June 2007 half-year, the Redcliffe City median price rose to $325,000, 8.3% higher than the same period in 2006. PRDnationwide explains that this rise was due to higher demand for housing - there were 776 house sales in the six months to June 2007, 114 more than the same period in 2006. This was the highest demand for housing in the Redcliffe region for three years.

House prices ranged from the $200,000 to $300,000 bracket (32% of sales) to $1.925 million for a multi-storey 4-bedroom house on 1,138 square metres with waterfront views at Scarborough. The largest proportion of houses sold in this six-month period was in the $300,000 to $400,000 price bracket (42%).

The most noticeable trend in this once affordable location is the decline in the number of sub-$300,000 houses available for sale. The median price for Margate, Kippa-Ring and Redcliffe (the suburb) ranges from $310,000 to $315,000, but other suburbs are creeping up in price (Scarborough $420,000, Woody Point $360,000). While house prices have floated upwards, PRDnationwide researcher Charlie Shing sees potential for further price growth. Five of the seven suburbs on the Redcliffe Peninsula each recorded more than 100 sales in the June 2007 half-year. One year median price growth in individual suburbs ranged from 6% to 24%.

The price trend was also seen in units, although units comprise only 17% of the Redcliffe housing market. Once again there is a big gap between the top and bottom of the market, with a unit in the Meyrick Lodge building in Redcliffe selling for $132,000 in March 2007 and a higher end apartment in Inchbrae at Scarborough selling for $850,000. Over the past five years, the median price for units increased by an average 15% per annum. The median price of $308,000 to June 2007, while only 1.5% higher than the same period in 2006, represented the second highest unit median price on record for this area.

It seems strange that the older seaside suburbs nestled on Moreton Bay 35 minutes north of the city have not been more popular before now. The Gateway Motorway and Bruce Highway provide easy access to Redcliffe, which is the closest settlement to the master-planned community of North Lakes. Direct transport links to Brisbane have been inferior for a long time, but a $315 million duplication of the Houghton Highway Bridge, to be completed by 2010, will do much to ease the pain of commuting. (Plans for the duplication are in place, while the historic Hornibrook Bridge alongside will be refurbished and maintained for the benefit of pedestrians, cyclists and fishermen).

Plans to extend the city rail link to Redcliffe have been floated by generations of successive governments. An express train linking Redcliffe to the Petrie line would be a huge boon to the peninsula, but although the rail corridor has been resumed, it is unlikely to happen this decade.

Yes, as demographer Bernard Salt observed recently, the places where the baby boomers' ageing parents live, once considered "daggy", are being pounced upon by upwardly mobile Gen Xers. Salt has identified sleepy seaside hollows like Melbourne's Mordialloc, Sydney's Narrabeen, Semaphore in Adelaide and Scarborough in Perth as those most likely to undergo "beachification", a process identified by the way those milk bars with plastic fly strips are converted into hip, minimalist cafes. Other signs include seaside caravan parks being sold off to developers, investors buying old houses on big blocks and then getting permission to split the blocks, and councils weighing in with foreshore beautification and Sunday markets.

We've seen this process overtake the formerly low profile beach suburbs of Manly and Wynnum on Brisbane's bayside (where it is next to impossible to find anything close to the water for less than $700,000). Is Redcliffe next?

ENDS

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