1770 prices step back in time as beach towns await boom

THE banks are selling distressed assets at big discounts.

121227 Mel Thomson in Agnes Waters

THE holiday crowds are finally arriving in 1770 - Queensland's perpetual next Noosa Heads - where the financial crisis and last season's flood-driven washout have caused the price of a penthouse beach unit to crash from $1.5 million to $350,000.

The bust doesn't seem to worry the post-hippie "Freedos" - free-spirited, open minded - locals.

Or aspirational mining families. Mel Thomson left Brisbane for beachside horse acreage with 2 1/2-year-old Hunter, Frankie-Jean, 11 months, and husband Michael Lane, who works week-on, week-off in the central Queensland coalfields.

For optimists, 1770 - the first Queensland landing point of Captain James Cook on his discovery voyage, about 530km north of Brisbane - is showing signs of a new beginning.

"There has been land that has been for sale for years and years that hasn't moved, but in the last couple of months everything is moving," Ms Thomson said.

"They might not have got the money they wanted, but the Gladstone effect is pushing out."

Ms Thomson is referring to the spillover population pressures from the tens of billions of dollars being invested in the Gladstone coal-seam gas export hub.

However, 1770 Beach Accommodation property manager Kim Skinner is more cautious.

Everything may have been booked for Christmas, but the annual tourism figures were down as much as 40 per cent, just like everywhere else, she said.

The idyllic twin towns of 1770 and Agnes Water have often been earmarked for a commercial greatness that has so far failed to come. There are skeletons of grand ambition, such as the half-finished Lagoons project gathering weeds behind a chain-mail fence on the edge of town. Just as there are fresh whispers of a new airport being built to usher in another wave of big development dollars.

But with Gladstone airport expanding just over an hour's drive to the north, that seems unlikely.

The reality is the banks are dumping their foreclosures.

According to Ms Skinner, the once $1.5m-$1.8m asking prices for beachfront penthouses at Loka Santi have slumped to a more realistic $350,000-$600,000. The average median house price in Agnes Water has slumped 20 per cent compared with the same time last year, according to RP Data.

Ms Skinner should know. Two years ago she paid $900,000 for a garden unit in the same block in which the penthouse was surrendered by the bank at a knock-down price. "It brought tears to my eyes," she said.

Ms Thomson and Ms Skinner said the biggest issue in town was the lack of facilities. A new community centre has just been completed, but it is "one metre short of a basketball court".

And there is no high school to encourage growing families such as the Thomsons to stay long term. Many students commute more than two hours daily to Bundaberg. "I think the government wants to have the people here first, but the people are not going to come until there is a school," Ms Thomson said. "There are 200 kids ready to go."