With all the doom and gloom in the media regarding the Australian Property Market, it’s important to recognise there are still some great locations that are performing very strongly for home owners and investors.
Queensland’s Sunshine Coast property market was recently ranked by the Real Institute of Queensland (REIQ) as the best performing market in the state, defying the trends seen in the southern states and the Queensland capital. Multiple reports have highlighted the region as the jewel in the state property crown, having outperformed almost every market in southeast Queensland in the past 12 months.
If you make a list of Queensland locations where there’s been double-digit growth in median prices in the past year, suburbs in the Sunshine Coast region dominate that list. There are various major factors behind this significant and sustained property growth.
The new medical precinct alone has been an enormous catalyst, including the $2 billion University Hospital and the adjoining private hospital, as well as smaller specialist facilities. These facilities have brought thousands of new residents to the Sunshine Coast, many of them well-paid and looking for quality homes.
Importantly it is the first property cycle where population growth and economic growth have hit a self-sustaining level. The Sunshine Coast has matured and is taking control of its own future.
The Sunshine Coast’s industry base has broadened over the past decade, with growth in new industries such as education, healthcare and professional services. The region’s top five industry sectors by total employment are health care and social assistance, retail, construction, accommodation and food services and education and training.
In particular, the health care, finance and insurance services sectors have been key drivers of economic growth since 2006-07.
Tourism growth to the Sunshine Coast has remained steady with over 12 million visitor nights last year. This has helped the economy enjoy strong jobs growth during recent years. In the year to June 2018 jobs growth was recorded at 7.1 per cent.
Rather than being caught in a boom-bust cycle, the Sunshine Coast is now experiencing conservative growth supported by employment generation and infrastructure investment. The Coast’s economy is more sophisticated than in previous property cycles with the fundamentals providing a safety net against a national property downturn. This sustained growth is providing peace of mind to those second-guessing their future as homeowners and investors.
Demand for property has increased thanks to the boost in jobs and trust in the local economy. The past year, ending June 2018, has seen impressive growth rates of 6.4 per cent for houses and 4.9 per cent for units recorded for the region overall.
The latest BIS Economics Australian Housing Outlook report reveals the Coast is the state’s star performer for 2018, with price rises outperforming both Brisbane and the Gold Coast over the past year. The local property market is on an “upswing” and poised to capitalise on the southern downturn through migration, which will inject financial investment and intellectual property into the region.
Noosa, after a long period of under-achievement, has returned to growth recently. In annual terms, its median house price is up 14 percent, while units are up 12 percent, according to CoreLogic data. Noosaville and Tewantin have both grown 11 percent.
Nearby, Sunshine Beach is up 17 percent and the median house sells for around $1.4 million. Heading south, Coolum Beach has risen 12 percent and nearby Mount Coolum is up 22 percent.
There is a long list of other Sunshine Coast locales with annual growth above 10 percent.
Population growth, the strength of tourism and the economy and the continued property demand versus supply imbalance have created the perfect conditions for the thriving property market.
The Sunshine Coast is the tenth largest ‘significant urban area’ in Australia by population. The rate of [population] growth on the Sunshine Coast is more than most developed countries and one of the fastest rates in the country. This strong population growth in the area has seen demand for property outstrip supply during recent years with new developments recording strong sales volumes and established properties consistently being sold at higher prices than they were purchased for.
The strong demand for property has also flowed through to increasing rents across all types of property on the Sunshine Coast. The Qld Residential Tenancies Authority’s most recent report shows the following increases in Sunshine Coast rents:
Many analysts and researchers talk about property in terms of cycles. Brisbane-based property expert Michael Matusik characterises this through a clock face. He and many other experts agree the Coast is an ‘upturn’ phase. This analysis is supported by industry research completed by the REIQ in June 2018.
When it comes to detached houses and vacant land, the Sunshine Coast is at 10 o’clock. Interestingly, and in contrast to many other locales, townhouses and apartments are positioned below the detached house hand at between 8 and 9 o’clock.