CHANGE was the name of the game in 2015 as the Sunshine Coast property market went from indifference to buoyant activity.
Much of the momentum that had built up toward the end of 2014 was not realised in the early part of this year.
National Property Research director Matthew Gross attributed much of this malaise to the fatigue and uncertainty the population was feeling from failed Federal budgets and political uncertainty.
This was due mainly to the changes of leadership in the Federal and State Governments since the GFC.
But the ascent of Malcolm Turnbull to Prime Minister and the business-as-usual approach of Annastacia Palaszczuk as Queensland Premier seemed to bring new-found confidence.
While Sydney and Melbourne property markets have been recording double digit lifts in house prices, it hasn’t been the same for the rest of Australia.
BT Financial Group chief economist Dr Chris Caton called for laser surgery to be performed on the Sydney and Melbourne markets to limit the risks of a housing bubble. At the same time he warned that regional Australia needed CPR to encourage growth on the back of the switch away from mining construction to production and the associated down
swing in property in those areas.
Yet the south-east Queensland property market is seeing value rewarded with strong, sustained growth that is expected to continue into 2016-17.
Interest rates dropped to a record low of 2% and Coast real estate agencies saw higher than expected prices being achieved for house sales.
While 2014 was dominated by the sub-$500,000 market, as buyers hunted for value and yield from an extremely tight rental market, the early part of 2015 saw the top end re-emerge, particularly in Noosa.
Ken Guy Buderim principal Danny Redman said the increased level of interest in the property market was highly predictable.
“Two years out we thought properties would return to value at this time,” he said, “but the confidence wasn’t coming from locals.
“They are seeing it now, they are realising it will be hard to find value in replacement as there will not be the stock levels they are used to.
“They have got some reference points now, the signal is supply may not match demand so it can only get better.”
The second half of 2015 has been extremely buoyant with numbers of sales increasing dramatically and days on the market decreasing.
Changes in the Sunshine Coast infrastructure are the main drivers of the economy, particularly the $1.8 billion Sunshine Coast University Hospital at Birtinya and the surrounding health hub.
Then there is the education and research hub at Sippy Downs with the University of the Sunshine Coast expanding, along with private and state schools and colleges.
The Maroochydore Principal Activity Centre is becoming a reality with development taking place on the fringes.
Infrastructure on the near-60ha greenacre site in the heart of Maroochydore is expected to start early in 2016 with the first lots set to be released soon after.
Aura, Stockland’s new residential community at Caloundra South, will be home to 50,000 people, while Palmview will see another 17,000 people being housed to the south of Sippy Downs.
The expansion of the Sunshine Coast Airport to include a second runway will boost the Sunshine Coast’s tourism sector that is already showing a 9.2% increase in visitors to June 30.
This is in response to the lower Australian dollar and the work of Visit Sunshine Coast, not only throughout Australia but in Europe and the UK.
Flights from Auckland have resumed and Qantas has re-introduced direct flights to Sydney.
Auctions were strong through the year as buyers and sellers struggled to put a true value on property.
Sunshine Coast Daily auction writer Sue Custance said competitive interest and bidding became the rule rather than the exception.
Ray White Caloundra co-principal Andrew Garland said the return of the top end of the market was not so much a surprise as a pleasant development.
He said the $3 million-plus market had struggled post GFC but recent beachfront sales included $4.25 million and $3.5 million at Dicky Beach and Shelly Beach.
In the hinterland, Mike Burns of Elders Palmwoods and Woombye said the buyer pool for acreage buyers has dropped back as people look to downsize.
“It’s a buoyant market but people are conscious of val
ue,” he said.
“Sellers think activity means price rises but it will be a long time before we see the heady heights of 2007-08.”
Commercial property has been reinvigorated in line with the changes the Sunshine Coast market is undergoing but also riding on the success of the Sydney and Melbourne markets.
National as well as international companies are setting out to establish themselves in prime locations, around the Maroochydore CBD, at the Kawana Health Hub and at the Sippy Downs education precinct.
At the same time existing businesses are looking to expand or re-position themselves in prime tourist areas such as Noosa’s Hastings Street, The Esplanade at Cotton Tree and at Mooloolaba, as well as Caloundra’s key precincts.
Two of the biggest moves were Bunnings and Officeworks relocating to Dalton Drive in Maroochydore, opposite the new Suncentral Principal Activity Centre that is expected to see initial works early in 2016 and the first lots released to market.
Queensland is the next property hotspot, experts say
As New South Wales and Victoria continue to experience weakness. Queensland is expected to take the lead, a National Australia Bank (NAB) poll of property professionals revealed.
According to the survey, industry experts project house prices in Queensland to increase by 0.7% next year and 1.3% in two years.
Some areas seen to perform strongly over the next year include Brisbane, Cairns, the Gold Coast, and the Sunshine Coast. Out of the suburbs, Coomera and New Farm are expected to realize robust gains.
Meanwhile, Queensland’s rental market is also poised to enjoy an upward boost, growing by 1.3% next year and 1.9% in two years. This is despite the stricter rules on housing investment.
The respondents of the survey also expect Queensland to retain foreign buyer interest. In fact, the share of foreign sales hit a four-year high of 22.8% over the previous quarter.
The results of the survey go against NAB’s own projection of the market. For instance, the bank expects house prices to remain flat in Brisbane over the next three years. Unit prices, on the other hand, is seen to fall by 4.5% over the next year.
NAB chief economist Alan Oster said Brisbane’s housing market seemed to be going sideways and its unit market still creates concern.
“It hasn’t peaked yet, so that’s good. We’re seeing quite strong economic activity in Queensland, so that always helps,” Oster said, as quoted by The Courier-Mail.
Gold Coast house values record the biggest growth in Queensland
The Gold Coast has recorded the strongest growth in house prices in Queensland over the past 12 months.
GOLD Coast house prices are leading the way in Queensland, up six per cent in the past 12 months to an average $620,000.
The latest figures by the Real Estate Institute of Queensland show homes on the Glitter Strip are $35,000 more on the same time last year.
Unit prices are up 1.9 per cent to $428,000.
REIQ data reveals houses on the Glitter Strip are worth $35,000 on the same time last year.
REIQ’s Queensland Market Monitor for March said the strong population growth came on the back of infrastructure projects such as the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrades.
“The property market has been one of the big winners from the sporting event as the $1.5 billion infrastructure investment has boosted confidence and demand for housing in the region,” the report stated.
“We expect house prices will show an upward path in 2018. However, this growth will most likely be more moderate.”
A quiet real estate period leading up to, and during, the Commonwealth Games likely contributed to a slight drop (-0.3 per cent) in the March quarterly median sales price, the report reveals.
Andrew Henderson says a growing population and employment opportunities were contributing to a strong property market. Picture: Jerad Williams
REIQ Gold Coast zone chairman Andrew Henderson said he expected interstate migration to continue to benefit the city.
“I expect the market to remain strong,” he said.
“There is a heavy amount of interstate buyers moving here.
“I was at an auction recently where the winning bidder was from Sydney and the underbidder was from Melbourne.”
Mr Henderson said growing employment opportunities were also attracting homebuyers to the city.
The Gold Coast property market is expected to remain strong.
“We have some of the best health facilities in the country and our universities are world recognised.
“Those two things alone complement the tourism industry and the lifestyle aspects that the Coast offers.”
The report found the fastest-selling suburbs on the Coast included Worongary, Merrimac, Highland Park, Mudgeeraba and Carrara.
It also revealed the rental vacancy held tight throughout the first quarter of the year at 1.1 per cent.
Andrew Bell says the Coast had evolved from a tourist town into a vibrant city with an expanding economy. Picture Mike Batterham
Ray White Surfers Paradise Group CEO Andrew Bell said the Games heralded the next chapter for the Coast, as it evolved from a tourist town into a vibrant city with an expanding economy.
“The city’s property market is riding the irreversible momentum that has now come to the Gold Coast in terms of economic diversity and with more employment options we will need more housing options for people,” Mr Bell said.
“We are no longer going to be subject to tourism upsides and downsides as we were in the past because our economy has well and truly diversified beyond just tourism.”
Australia’s golden triangle of opportunity
It was great to be back on the Gold Coast for the 21st annual Australasian Real Estate Conference (AREC), attended by over 4,000 of Australia’s best industry professionals. While I was there I was once again reminded of how much potential the South-East Queensland property market is offering both sea changers and investors at this stage in its market cycle.
In my view, Brisbane is the best market in Australia currently for short to medium term price growth, with the value gap between it and the other big East Coast capitals as large as I’ve seen it in many years.
When you factor in the key drivers for future growth – liveability, affordability, scale and future economic prospects, they all suggest that Brisbane is a market to invest in. Check out the latest statistics from CoreLogic below.
Value gap – median house prices
Value gap – median apartment prices
I’ve been bullish on Brisbane for many years and in hindsight, I called its next growth phase a couple of years too early. It’s had some growth in recent years but there is a lot more to come over the next few years.
According to McGrath’s top prestige agent in Brisbane, Alex Jordan, one of the dominant trends today is downsizers buying up luxury apartments.
Alex says: “Despite the reported oversupply in Brisbane’s inner city apartment market, we are seeing great strength in the prestige apartment sector.
“The luxury apartment market ($1M+) is driven by owner occupiers, particularly baby boomers and empty nesters, who are attracted to less maintenance and better accessibility.
“Popular suburbs include New Farm, Newstead, Teneriffe, Kangaroo Point, South Brisbane, St Lucia, Paddington and the Brisbane CBD. These areas offer a desirable lifestyle with an abundance of shopping, dining and entertaining precincts at their doorstep.”
South East Queensland has so many options for asset-rich, cash-poor southerners. Many of our customers in Sydney and Melbourne are looking closely at South East Queensland both for investment and a potential sea change. I believe its affordability will continue to attract record levels of interstate migration.
If you live in Sydney or Melbourne and you’re struggling with the mortgage and cost of living, Brisbane is a fantastic alternative. It offers big city job opportunities, high quality education options and the chance to transform your financial future.
The boom delivered Sydney and Melbourne home owners a capital gain of up to 75% – that’s enormous new equity that could be cashed in to fund an amazing new lifestyle with far less mortgage stress up north. Plus, you’d be buying in just before Brisbane’s next wave of price growth. It’s the perfect scenario.
I believe the area from the Gold Coast to Toowoomba and up to the Sunshine Coast is Australia’s golden triangle right now.
Toowoomba, with its expanded airport facilities which have opened up easy access to the south, is the perfect and affordable treechange destination. Known as Queensland’s Garden City, about 2,300 people moved here from Brisbane last year for its cheaper house prices and enjoyable regional city lifestyle.
Both the Gold Coast and Sunshine Coast are also appealing sea change options benefitting from a raft of new infrastructure that will drive further population growth and generate more local jobs.
Brisbane is one of the world’s great cities but I don’t think this is fully realised as yet. If you haven’t been to Brisbane for a number of years, get on a plane. This is a thriving city that offers many of the lifestyle amenities you love about the southern capitals but at a much cheaper price.
I think Brisbane will also become very attractive to migration and investment from Asia in the years ahead.
South East Queensland is offering opportunity everywhere for both owner occupiers and investors alike. Now’s the time to consider what Australia’s premier lifestyle market can do for you!
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