CBRE’s end-of-year review of the commercial property market identifies the Sunshine Coast property market is still being fuelled by key factors including: Significant infrastructure investment; Airport upgrade; Bruce Highway upgrade at Palmview; Major property projects: SunCentral Maroochydore, Oceanside; Increased tourism numbers; Strong population growth; Rising business confidence.
CBRE Sunshine Coast director Brendan Robins said yields (return on investment) moderated in 2017, with an average yield range of 6.75%-7.5%.
“At the sharp end of the yield curve, investment properties with a national tenant and a 5-10 year lease are selling for around 5%-6%. However, assets with a distressed lease profile are still selling above 8%.
“The industrial sector is probably the star performer of all the sectors, with increased sales for vacant land and newly-built stock. Construction-related businesses have seen strong growth as a result of demand within the residential property market.”
Centra Park Coolum and the Sunshine Coast Industrial Park (Caloundra South) achieved a number of land sales and new projects were started and some completed during the year, Mr Robins said.
“Selling prices for new strata units range from $1700 up to $2000 per sqm for modern new tilt sheds.
“Industrial rents have increased over the year, ranging from $110-$130 per sqm for quality stock and from $100-$110 per sqm for secondary stock.”
Mr Robins said demand for industrial land has continued to strengthen – with the average 2000 sqm allotment virtually sold out in Coolum and priced from $200 per sqm at Bells Creek and Coolum where there are only a few small lots remaining. Established precincts such as central Kunda Park and Caloundra West achieved circa $300-$330 per sqm.
“Despite a barrage of challenges such as online shopping and Amazon’s entrance into the Australian market, the retail sector has continued to improve. Spending was up across most categories, strongest in food retail and the bulky goods.
“The food and beverage market is the star performer across the country. Development on the coast included the $400m expansion of Sunshine Plaza, which is due for completion in late 2018. Some projects were completed in 2017, including The Point at Kawana.”
Several shopping centres were sold in 2017 including the Peregian Springs Coles ($41m) and the Tewantin Woolworths ($17.3m).
The Sunshine Coast office market (Kawana, Maroochydore and Mooloolaba), which now now totals over 170,000sq m of space, will face some challenges over the coming years.
CBRE has found that due to significant developments such as Kon Tiki (16,000 sqm) in Maroochydore and Stage 1 of Youi at Sippy Downs, the vacancy level will increase for 2018 and beyond.
“Rents are generally in the range of $300-$360 per sqm plus outgoings and have been at this level for around a decade. Capital values for A-grade stock range from $4000-$4600 per sqm.
“The development market is still performing strongly on the back of demand for well-priced and well located product. Commercial land in established precincts is generally priced from $700-$1200 per sqm.
“Premium residential development sites close to water or with substantial development upside have transacted for $1500-$4000 per sqm. Demand from developers for both townhouse and medium-high density unit sites is high, with sites selling for $50,000-$100,000 per lot, depending on development costs.
“We expect development to remain strong in 2018 as business continues to expand within the region. Although the influx of capital into major projects will continue, many investors are now sitting on the fence due to years of yield compression. Nevertheless, the fundamentals of strong population growth and significant projects in the pipeline will keep the sun shining on our commercial market.”
Originally Published: www.sunshinecoastdaily.com.au
Sydney Baby Boomers drive real estate boom in Brisbane
A MIGRATION of cashed-up Baby Boomers from Sydney will lead to a real estate boom in Brisbane, according to property investment experts.
A Property Investment Professionals of Australia (PIPA) members’ survey revealed that Brisbane was regarded as the best capital city for property investment.
Of the members who participated in the survey, 46.15 per cent rated Brisbane as the best capital for investment prospects in 2018.
PIPA chairman Peter Koulizos said the Queensland capital was expected to boom as a side effect of the Sydney property boom happening when Baby Boomers were looking at retiring.
“People that have a lot of equity in their home can retire or semi-retire by selling up and buying a home in southeast Queensland,” Mr Koulizos said.
And with the median house price in Sydney more than $1 million, he said this would give them a sizeable pile of cash left over after buying a home further north.
“That is because there is such a big price difference between Brisbane and Sydney,” he said.
A PIPA survey from last year also rated Brisbane as the best capital city in which to invest, but in the past 12 months the average house price has increased by just 2.9 per cent.
Mr Koulizos said a boom would come eventually, but picking the exact point was tricky.
“Property booms take a long time to gather momentum, I doubt you will see double digit growth in Brisbane this year but it may be different next year,” he said.
Melbourne was the next best investment option according to the survey, with 19.23 per cent believing it was a good place to invest, followed by Perth at 15.38 per cent.
Originally published: brisbaneinvestor.com.au
Property price growth on Gold and Sunshine coasts outperforming Brisbane, REIQ report finds
Several of Brisbane’s more expensive suburbs are among the biggest losers in the property stakes, a Real Estate Institute of Queensland (REIQ) report rating performance in 2017 has found.
The Queensland market monitor showed Highgate Hill, Milton, Kelvin Grove and West End suffered the biggest sales price declines in the inner-city ring, followed by Wilston, New Farm and Taringa.
Highgate Hill in Brisbane’s inner-south suffered a median price plunge of 17.9 per cent year-on-year to $937,500.
Milton’s median price fell 11.4 per cent to $855,000, compared to 2016.
In Kelvin Grove, the median sale price was down 7.9 per cent to $764,750 and West End dropped 6.3 per cent to $1,030,500.
But some Brisbane suburbs enjoyed strong growth.
Teneriffe in the city’s inner-north became Brisbane’s first $2 million suburb in 2017 with a median sale price of $2.4 million — up 30 per cent on 2016.
At the same time, Kangaroo Point and Kalinga joined the $1 million club, with median sale prices soaring 28.4 per cent and 22.5 per cent respectively.
REIQ media manager Felicity Moore said inconsistences in price growth throughout the city could be attributed to “supply issues”.
“When you see a price soften significantly, it could be that there’s an additional level of stock developed, such as house and land packages that meets the level of demand,” Ms Moore said.
PHOTO: The Gold Coast recorded an overall increase in median sale price of 7.7 per cent. (Supplied: Tourism and Events Queensland)
Beach lifestyle proving attractive
Both the Gold Coast and the Sunshine Coast outperformed Brisbane in terms of house price growth.
The REIQ report showed the Gold Coast recorded an overall increase in median sale price of 7.7 per cent and the Sunshine Coast achieved 5.9 per cent, while Brisbane only managed an average of 2.6 per cent.
Ms Moore said the rediscovery of the beach “lifestyle markets” was somewhat overdue.
“When you look at what those markets have to offer, the Gold Coast and Sunshine Coast are just world class coastal beachfront living at its best,” she said.
“They’re not densely populated, they’ve both got world class beaches, great shopping and good schools and the amenities that go into those communities are of a very high standard.”
She said 2017 results positioned the Gold Coast as the strongest market in Queensland and among the top 10 nationally.
“It’s a similar story with the Sunshine Coast, although for years the level of supply going into that market has been a bit constrained,” she said.
“It’s struggled from a long-time lack of construction of new dwellings and when there’s demand building up it puts pressure on prices.”
Mining downturn impact
The report indicated the mining downturn continued to impact parts of central Queensland.
In Blackwater, the median sale price nosedived 70 per cent to just $36,000 last year, down from $120,000 in 2016.
Five years ago, the average sale price was $450,000.
“It’s a very sad situation but there is good news on the horizon,” Ms Moore said.
“The global body that monitors coal demand is forecasting that from 2022 there’s going to be a global uptick in demand, so in anticipation of that we’re seeing some coal miners pull some smaller mines out of mothballs.
“There’s a level of confidence coming back into the coal sector.”
Originally Published: brisbaneinvestor.com.au
The property clock strikes big for hot spot areas
9 Lion St, Ipswich. Picture: realestate.com.auSource:Supplied
DESPITE last month’s previous lacklustre values, analyst Michael Matusik has identified the areas on the upswing.
While property values remained fairly stagnant during February, property analyst Michael Matusik has revealed where the housing market is on the upswing.
Mr Matusik’s latest property clock for houses, has Brisbane, Gold Coast, Logan, Redlands, Sunshine Coast and Gympie all in upswing.
He said a market’s position on the property clock was based on the strength and direction of key indicators including sales numbers, price and rent, demand and how much new supply there was.
His latest Matusik Missive also listed Ipswich, the Fraser Coast and Noosa markets as heading into upswing territory.
Ipswich has many beautiful homes, often at prices well below what something similar would cost in Brisbane’s suburbs. A four-bedroom home at 9 Lion St,Ipswich is listed for $879,000.
The land the home sits on was bought in 1904 from the family of the then Ipswich Mayor Mr Pettigrew. A home was built on it in 1907.
The period home has 3.5m high ceilings, VJ walls, period window, and timber floorboards which have all been restored.
The home has two new bathrooms, a large separate dining area and study. It is listed through Steve Athanates of NGU Real Estate Ipswich.
On the Gold Coast at Robina, 196 Easthill Drive is listed for more than $850,000.
The three-bedroom home is within the Glades Golf Community.
It has formal and informal living and dining areas, and an outdoor entertainment area with a swimming pool nearby.
It is listed through Ian and Linda Mills of McGrath – Palm Beach.
On the Sunshine Coast at Noosaville a home at 15 Bluebell Court is listed for offers of more than $740,000.
The three-bedroom home is in a cul-de-sac in a residential pocket bordered by the Lake Doonella Reserve.
The single-level home has open plan living and dining areas. An outdoor area overlooks the pool and reserve at the rear of the property.
It is listed through Tansy Grant and Justin Sykes of Ray White – Noosa.
Originally published: brisbaneinvestor.com.au
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