There was no ripple of warning across its famed passage of azure waters. Out of the blue in September last year, the Whitsundays—Queensland’s iconic archipelago of 74 tropical islands—was hit by its biggest property wave as a run to paradise began from Australia’s Covid-gripped capital cities. At the northern end of Hamilton Island a $6-million deal was sealed, sight unseen, by a southern buyer for Lotus House, a four-bedroom hilltop residence overlooking the verdigris depths of the Coral Sea.
“It was like ‘wow, what the hell just happened?’,” says Sotheby’s Wayne Singleton, who negotiated the sale.
Not long after, another of the island’s waterfront mansions was snapped up for “just under $6 million”—also sight unseen.
“These were houses that had been on the market for a while and the next minute they’re selling for prices we hadn’t seen for years,” Singleton says.
Since then, Singleton estimates there have been a total of $130 million in property transactions on the resort island, with almost a quarter of its privately owned houses changing hands as well as a swag of apartments—including a harbour-front penthouse with a marina berth for $8.4 million. Prices for some of the properties on “Hammo” as it is affectionately known by locals have skyrocketed by up to 30 per cent and, not surprisingly, Singleton is still shaking his head.
“It’s madness,” he says. “On average, before Covid, there were $30 million of deals a year on the island and $50 million was a good year.
“We used to sell about two to four houses per annum and, so far, there have been 23 house sales during the past 12 months. It’s just going nuts.”
He laughs when asked if there are any signs of the sales boom slowing.
“We’re actually expecting it to get even crazier when the borders open up,” he says. “I’ve got another seven contracts out at the moment just waiting to be signed—that’s unheard of.”
Knocked flat by the global financial crisis and then two cyclones, in 2011 and 2017, the Whitsunday property market is back stronger than ever as a pandemic-induced boom plays out up and down the Queensland coast. Hamilton Island chief executive Glenn Bourke says the region is in the midst of a rebirth led by the renewed focus on lifestyle and a paradigm population shift due to Covid.
“Places like the Whitsundays are definitely more front of mind now in so far as they’re not high population and they’re generally regarded as healthy pristine places where you’ve got your own space,” he says.
“I think many people, particularly from the southern states, have had a cathartic moment and want to pursue a different dream in their life.
“What was really slammed home during Covid was that the thing we were having ripped away from us was the lifestyle we enjoyed so much … and with that has come this interest in property and people looking to access more of their available wealth to create those lifestyle experiences.
“That bodes well for the Whitsundays and other areas which were maybe only considered as holiday destinations and now are becoming more residential places and somewhere to live and enjoy those freedoms.
“Over the next five years, I expect there’ll be a fairly prosperous outlook for the Whitsundays with significant investment and amounts of development.”
Bourke says while there are no major plans on the books for Hamilton Island, an exponential increase in land sales on the island is expected to spark a low-density building boom.
“Land sales in the past six months have been equivalent to land sales of the past six years … and the inquiries are still coming in thick and fast,” he says. “The rising interest and amount of people willing to take those blocks on as a project is a real phenomenon.”
Bourke says it also aligns with the low-density development strategy that the Oatley family, who bought Hamilton Island in 2003 for about $200 million, have for the island going forward.
“They’ve done a bit of medium density in the past but they don’t have an untold desire to overdevelop the island. It’s a pristine tropical island environment so you don’t want to turn it into Hong Kong.”
Meanwhile, Australian mining billionaires Andrew “Twiggy” Forrest and Gina Rinehart are collectively poised to invest almost $100 million to acquire two of Queensland’s Island jewels to the north and south of the Whitsundays. Forrest’s investment company Tattarang has splashed $42 million for Lizard Island and Rinehart is looking to buy Great Keppel Island for about $50 million and redevelop it. Along with the $20-million acquisition of mothballed Long Island Resort earlier this year by Sydney hospitality kings Bill and Mario Gravanis’ Oscars Hotel Group, the news has sparked speculation of a potential reboot of a number of closed resort islands left in permanent limbo by their foreign owners.
“It’s a huge shot in the arm for resort and island-based tourism, absolutely, and it will give other people confidence to invest in it,” Bourke says.
“I can only think good things will come out of it because … if I use the Oatley family as an example, they have an altruistic view of how Hamilton Island should be and 18 years ago when they came in it was at a low point but they had the capital to inject into it and turned it into a beautiful, modern well-appointed destination.
“So, the commercial ramifications of that altruism are that it’s a better product and it works better and you’re able to have it self-sustain.”
On Hayman Island, the Australian arm of Malaysian property giant Mulpha is ramping up the resort’s accommodation mix with the construction of 12 beachfront pavilions. With the looming reopening of borders, it also is bracing not only for a busy holiday period but a sales rush on its upmarket 21-villa Hayman Estates project it is developing and selling off-the-plan.
“It’s amazing how many people can spend $6 million to $8 million on a holiday home,” says Mulpha sales and development manager John Hughes. “People’s attitudes have certainly shifted during Covid and they are enjoying their money now because who knows what the future holds.”
However, while the islands are basking in the surge of demand from the south, an even bigger property and development story for the Whitsundays is unfolding on the mainland at Airlie Beach and its surrounds. Whitsunday Regional Council’s latest data shows building approvals jumped significantly in January this year and averaged 20 per month in the first half of 2021. By comparison, there were an average of only six building approvals per month in the nine months to March 2020 and that rate continued through the remainder of the year.
“Airlie has been traditionally known as a backpacker-type holiday place,” says the council’s development services director Neil McGaffin. “But I think while you will continue to see backpackers come here, Covid has thrown the cat among the pigeons and we’re now seeing a real evolution.
“We’ve had to re-do our infrastructure, economic and population projections.
“We’ve had a significant influx of purchasers from southern states … sale of land has escalated, building has escalated and prices have escalated.
“There’s quite a few estates under construction and they’ve had strong pre-sales but we’ve got pressure on the housing sector at the moment because the stock to purchase has diminished and the stock to rent has significantly diminished.
“So, the difficulty we have is finding accommodation for workers and that’s having a flow on effect to the tourism and other sectors as far as staff.”
The latest PRD Real Estate market update indicates that in the 12 months to June 2021 house sales soared by 121.4 per cent and apartment sales by 244 per cent. Median house prices jumped to $515,000 (up by almost 8 per cent), apartment prices to $290,000 (more than 18 per cent) and house rental prices have increased by 32 per cent. More than $115 million worth of new projects is expected to commence across the second half of 2021 in the Whitsundays area. In a sign of the changing times a multi-million-dollar development including a new hotel and tourist park with a pool, restaurant and beer garden is being undertaken on the site of the former Reefo’s Backpackers at Cannonvale. Two new residential subdivisions for almost 80 lots are also under way in the surrounding area as well as the development of 210 dwellings as part of the $60-million Whitsunday Green mixed-use project.
“People have decided they are going to live a different way and are just escaping the southern states,” says PRD Whitsundays chief executive Annette O’Neil. “Queensland has become quite aspirational for people and, particularly as a regional and coastal area, we have really benefited from that.”
O’Neil says the Whitsundays is soaking up “the best times we have seen here for a very long time” and with some significant developments already in the pipeline and an increasing number of developers looking for sites in the area there may be “bigger things to come”.
But she is remaining cautiously optimistic.
“The biggest issue is a lot of the developments are not shovel ready and it’ll be interesting to see if it all lasts long enough for them to turn dirt and come to fruition.”
Veteran Queensland developer Kevin Seymour believes the region’s boom has at least two to three more years to run yet.
“The fact is I’ve never seen as much money in the market along the coast in north Queensland. The market is awash with money,” he says.
During the past two decades his Brisbane-based Seymour Group, one of Australia’s largest private developers, has undertaken a handful of projects on the Whitsunday mainland. Its latest venture, One Airlie—a waterfront gated subdivision of 12 allotments next to the Whitsunday Sailing Club—sold out during the past six months with blocks ranging from $1.3 million to $2.6 million.
“There’s a different class of buyer now coming into Airlie Beach to what there was,” Seymour says. “There’s a lot of wealthy buyers coming in and building magnificent homes and that’s changing the demographic and atmosphere quite a bit.
“The bones for the development of the place are extremely good and I think the time is right now. If you look at the strength of not only Airlie Beach but Cannonvale … it’s quite substantial now and there’s a lot of depth in that market.”
Sydney-based developer John Zappia is no doubt hoping Seymour is right. Back in 2007, he swooped on an elevated 1.01ha development site at Shingley Drive, Airlie Beach, previously earmarked for a “mega-luxurious” apartment project by socialite and former US president Donald Trump’s ex-wife, Ivana Trump. Zappia has been battling to get his $80-million One Whitsunday high-rise resort development off the ground ever since and is set to lodge his latest revised plans for the project with a “toned down” design and its height reduced by four levels.
“I’m not a Gina Rinehart or a Twiggy Forrest, I’m just a Joe Blow from Sydney who took a big punt and I’ve managed to survive this far and I want to see it through,” he says.
“I’ve burnt a lot of money on this but I believe in Airlie Beach and the Whitsundays and I’m still committed to making this development work because I think it works for the area and the whole region.”
Meanwhile, the forces of change in the Whitsundays are clearly at work on the streets of Airlie Beach.
“Most of your locals don’t wear shoes but you’ve got some pretty smartly dressed people in town so you know they’ve only just moved up,” Sotheby’s Wayne Singleton says.
Source: The Urban Developer
