EXPERTS are hailing Queensland’s Sunshine Coast as the hottest place in the nation to invest in property right now.
A lack of housing, a tight rental market and a rapidly growing population mean supply is failing to keep up with demand in the region – creating perfect conditions for investors.
Leading real estate industry figure John McGrath said the Sunshine Coast presented one of the best opportunities for capital growth because of its liveability, affordability and future economic prospects.
“From an investment point of view, where in Australia right now can you invest your dollar and get better returns than the Sunshine Coast or southeast Queensland?” Mr McGrath said.
” I don’t think there is a location that’s going to offer better investment growth in the future.”
His views are echoed by prestige property agent Tom Offermann of Tom Offermann Real Estate, who claims the Sunshine Coast “is on the cusp of the highest growth period in its history”.
“This is being driven by a raft of infrastructure projects that are delivering exceptional lifestyles, which in the past required some compromises for people coming from big cities,” Mr Offermann said.
The region is in the midst of an infrastructure boom, with billions of dollars being invested in upgrading and creating new facilities.
Work is underway on a new runway at the local airport, which is set to become international by 2020, and a new hospital and health precinct has recently been established.
“These are game changers,” Mr Offermann said.
“Astute property investors who recognise what is happening, and take action to secure the best located property they can afford, will reap the rewards of their foresight.”
Local agents say the region is crying out for more investment properties to cater to the needs of the increasing population.
According to demographer Bernard Salt, the Sunshine Coast’s population of around 298,000 residents is set to rise to 550,000 in 23 years, which will require more than 100,000 new homes to be built.
The latest Real Estate Institute of Queensland figures show the rental vacancy rate on the Sunshine Coast is just 1 per cent, with Caloundra having the tightest vacancy rate in the state at just 0.5 per cent.
It’s good news for investors, who are currently achieving healthy rental returns of around 5 per cent.
In its recent report, Herron Todd White noted an increase in investor activity in the Sunshine Coast market, with the sub $350,000 unit and townhouse sector particularly popular.
“It’s not uncommon to see townhouses selling for $220,000 attracting a rental of $280 per week – over 6.5 per cent gross return,” the report said.
For investors looking to capitalise on the growth in the region, McGrath Real Estate founder John McGrath said now was the time to get into the market.
“I think there is a great opportunity, in particular right now, because we’ve seen Sydney and Melbourne have shown unprecedented growth over the last five or six years,” he said.
“Now those markets have come to a plateau and a lot of people are going to be saying; ‘Do we take our profits and reinvest them, or, in fact, do we move up north and get better value for money?’
“So, I think right now there’s a terrific window of opportunity where people can capitalise on the immense growth we’ve seen in the southern states.”
Reed & Co director Adrian Reed the increased international access the new airport would provide would likely change the profile of buyers in the Noosa region.
“We’re currently seeing an increase in Australian expats buying back into the market, but if accessibility becomes easier, we’re expecting a more aggressive upward trend in high-end premium property,” Mr Reed said.
He said that lending restrictions and the impact of the banking royal commission had had little impact on the region’s prestige market.
“The vast majority of deals I’m doing at the top end of the market are cash,” he said.
“They’re self funded retirees who’ve already sold their principal place of residence.”
Owner/builder Paul Saunderson, who is selling his home in Noosa Heads through Peter TeWhata of Tom Offermann Real Estate, said the local market was “out of control at the moment”.
“There are houses getting knocked down and new dwellings being built everywhere,” Mr Saunderson said.
He said the contemporary, four-bedroom, three-bathroom property at 20 Sanctuary Ave, Noosa Heads, which he lived in with his wife and two children, was attracting strong interest from interstate and overseas investors.
“It’s a good investment opportunity because it’s been valued as holiday letting, which is anywhere from $6000 to $10,000 a week during peak season,” Mr Saunderson said.
Jamie Smith of Century 21 On Duporth in Maroochydore said he’d never seen so much activity in the Sunshine Coast property market, with strong interest from both local and interstate investors.
Mr Smith said many investors were looking to buy in the less expensive suburbs, where new housing developments were popping up, such as Caloundra, Sippy Downs, Birtinya and Mountain Creek.
“It’s definitely unprecedented in terms of what we’re seeing on the Coast,” he said.
But Mr Smith said investors who were not already in the market needed to act fast.
“If you were here three years ago, you could have bought between $400,000 and $500,000,” he said.
“Now you’re looking at anywhere from $600,000 plus, so it’s definitely changed a little bit.”
SUNSHINE COAST SUBURBS FOR BEST CAPITAL GROWTH
Suburb Property type Median price 12 month change in price
Minyama House $1.31m 45.8%
Kenilworth House $399,000 40%
Yandina Creek House $820,000 32.3%
Beerwah Unit $375,000 25%
Mount Coolum House $676,200 23.2%
Mapleton House $543,250 21.3%
Mudjimba House $739,500 20.7%
Peregian Springs Unit $475,200 18.8%
Battery Hill House $579,500 18.4%
Montville House $707,500 17.9%
House prices now ‘unaffordable’ for many average Australians
A sobering report by real estate professionals has said property prices are “increasingly unaffordable” and Australians may never own a home.
First time home buyers are all too aware buying their first pad right now is a struggle.
Now that’s been confirmed by the industry itself with real estate professionals darkly warning large numbers of “average” Australians “may never be able to enter the property market” given the inexorable rise in prices.
That sobering residential reality comes as it was confirmed Sydney house prices had soared. The average house is in the Harbour City is now going for $1.1 million with units at $800,000.
A typical Sydney house is now about $117,000 pricier than it was at the end of February. Industry organisation the Australian Property Institute (API) and tech firm The Search People surveyed almost 600 property valuers across Australia to gauge their attitudes to the property market.
Property valuers conduct detailed inspections of homes, looking at the number of rooms and size as well as a property’s condition to ensure it’s fit to be bought or sold, is priced correctly and if any improvements need to be made to make it market ready.
Almost half think property ‘unaffordable’ for average Australian
The report found 59 per cent of valuers believed the Australian housing market was currently in a bubble. While 55 per cent thought most homebuyers were over capitalising on their purchase.
Most damningly, 43 per cent of valuers said property was now essentially out of reach for the “average” Australian.
“The likelihood of owning a home is becoming increasingly low as residential property becomes unaffordable for the average Australian,” the firms stated.
“Aussies may never be able to enter property market.
“Professional valuers believe Australia’s residential real estate prices will continue to rise despite serious affordability and sustainability concerns,” the report added.
There may be a bubble, but in the short term at least that bubble doesn’t seem set to burst, said The Search People’s Rafe Berding.
“Most respondents believe a boom is set for the Australian property sector, however the majority also believe Australia is currently witnessing the makings of a property bubble.
“A combination of record low interest rates and buyers’ uncertainty of investing in other alternatives is fuelling high demand. This coupled with low supply is driving a ‘fear of missing out’ for many buyers.
“As a result, in some cases, properties are being snapped up significantly above the asking price within moments of being listed,” he said.
Sydney, Melbourne, Perth seeing the strongest growth
Almost two-thirds said they saw “continued strong growth” for property values across Australia’s six main capitals in the next six months.
The report said this was a “worrying” trend that would disadvantage many prospective buyers.
More than 60 per cent of those surveyed in Sydney, Melbourne and Perth said they expected prices to rise. In Brisbane, it was even starker with 70 per cent believing a price jump would occur with around 12 per cent of those saying prices in the Queensland capital could go up by more than 10 per cent.
Adelaide is the most affordable capital, but even here more than 55 per cent of valuers have said the only way is up for house prices.
API chief executive Amelia Hodge said the market was firing on all cylinders.
“With record low interest rates, we’re seeing more and more buyers entering the market.
“This is great news for Australians selling property, especially with values on the rise in most sectors and selling times decreasing across most capital cities.”
More than half of those surveyed said Australians should be allowed to access their super to pay for property.
Sydney average house price now $1.1m
Data from property research firm CoreLogic, released on Tuesday, showed prices for all categories of housing rose 3 per cent for the month – one of the largest monthly rises on record.
The median price of a Sydney house is now $1.186 million, while the median unit price is $782,000, according to the data firm.
CoreLogic head of research Tim Lawless said the median house price would likely hit the $1.2 million mark soon – even as early as next month. “It wouldn’t take much growth, it’s nearly there,” he said.
May’s bump in prices was a modest slowdown from March, when values climbed at the fastest pace in 32 years, but the growth still dwarfed price rises across the rest of the country.
Sydney’s price rise was 66 per cent higher than in Melbourne and about 36 per cent higher than the national average.
Mr Lawless said he expected rises to moderate over the coming months as buyers became priced out of the market.
“It will reach a point where fewer buyers can compete,” he said.
Housing supply was also beginning to increase in many suburbs and a further increase would take pressure off of buyers to bid up prices.
A shortage of listings had been one of the biggest drivers of the recent price boom, Mr Lawless said.
Backing up the API report that Perth is set to for a big rise in prices was an analysis by comparison website Finder.
In Perth, property prices were predicted to rise by 8 per cent over the next seven months, adding almost $80,000 to the value of properties, giving them an average value of $609,000.
Australian Bureau of Statistics data from April showed the average deposit needed to secure a mortgage was $106,743 – an increase of 16 per cent since January 2019.
The ACT had the largest home deposit increase since 2019, with the upfront amount required swelling by 24 per cent to $117,790, followed by NSW – up by 23 per cent to $128,469.
Article Source: www.news.com.au
Australian house prices to rise by 15 per cent this year but slow in 2022
Australian house prices will rise by 15 per cent by the end of the year before slowing to just 5 per cent in 2022, a new Westpac Housing Pulse has revealed.
The quarterly report, released this week, revealed markets across Australian capitals are in a “fully fledged, broad-based boom”.
Westpac senior economist Matthew Hassan said all aspects of the market were showing outright strength, with turnover 30 per cent above the national pre-COVID peak.
Prices are 8.5 per cent above their pre-COVID highs, pushing record levels in most markets.
“Everyone is out there looking for any hint of a moderation to this boom,” Mr Hassan said. “So far, there is nothing really that convincing – auction clearance rates have come off slightly, but we are only talking about 2 per cent or 3 per cent and still running around 80 per cent.
“There is nothing but a slight cooling off from ‘red-hot’ to ‘hot’ at best, and it is not really a sign things are about to turn cold,” he said.
The strength of the market had been surprising, but could not continue at such a fast pace, especially if home buyers could no longer afford to get into the market, Mr Hassan said.
“We’ve been pretty amazed by some of the strength the market has shown throughout 2021,” he said. “We do expect it to slow because you can’t expect such vigorous price gains without people’s ability to service a loan [being affected].”
The Reserve Bank and Australian Prudential Regulation Authority (APRA) would be concerned once property prices rose by 15 per cent, which was why Westpac expected some form of macro-prudential intervention in the first half of next year.
That could include tightening the loan-to-value ratios or a cap to investor credit growth, Mr Hassan said.
“It will be a soft landing really — 5 per cent growth is very gentle,” he said.
Strong price gains were happening across all capital cities, particularly Sydney, during the coronavirus pandemic, setting it apart from other housing booms in Australia.
“In previous price rises two to three cities propelled the gains each time, one cycle was Sydney and Melbourne and the cycle before that was the mining states with one or two cities sitting it out,” Mr Hassan said. “That’s just not happening now because all cities are booming.”
Meanwhile, a Finder RBA Cash Rate Survey of 40 experts and economists, released Monday, revealed the average house price could rise by 21 per cent in Sydney — or $216,300 — in 2021.
Over the next six months, that rise is expected to be about 8 per cent.
Finder head of consumer research Graham Cooke said Sydney’s property market continued to soar to record breaking levels.
“To put that into perspective, prices rose by just 4 per cent in 2020 and 2019, and dropped by 8 per cent in 2018,” Mr Cooke said. “A 21 per cent increase would be the highest annual increase for the Sydney property market in recent history, beating the previous record of a 15 per cent rise in 2013.”
Boom towns: Property price peaks spread across Queensland
Queensland has become a real estate gold mine with the number of suburbs and regional areas recording house sales growth hitting record highs.
In less than 12 months, Greater Brisbane has had an almost fivefold increase in suburbs showing housing prices are on the march.
Even more prosperous is regional Queensland, which includes the Gold and Sunshine Coast, which is outperforming city areas across the nation with 157 locations on the financial rise, according to the quarterly Price Predictor Index (PPI).
Overall, Regional Queensland leads the nation with 70 per cent of all locations canvassed are showing a rising markets, compared to 57 per cent in Brisbane, 49 per cent in Adelaide and Melbourne with 47 per cent while Sydney’s data has yet to be tallied.
“The uplift in sales activity in the past six months has been extraordinary,” said Hotspotting property analyst Terry Ryder of Queensland’s fortunes.
The PPI is generally considered a precursor to price growth with both Greater Brisbane and regional Queensland recording their highest figures in the six years the quarterly surveys have been conducted.
To think, less than 12 months ago, when Australia was in the midst of the pandemic, there were just 28 Greater Brisbane suburbs showing a housing price increase.
That number doubled during the following quarterly survey, when 56 suburbs were identified and now a whopping 124 suburbs are showing house prices are steadily increasing in value.
Leading the surge is Yeronga where the median has risen a whopping 38 per cent over 12 months and lifted the median to $1.045 million.
The second biggest gain was made in St Lucia where the median rose 36 per cent and the median price is $1.525 million, third highest in the state behind New Farm ($1.75 million) and Hamilton ($1.54 million).
Next best were suburbs where the median ballooned 20 per cent were New Farm, Highgate Hill ($1.2 million) and Manly ($945,000).
Mr Ryder said the results showed the number of growth suburbs doubled in six months and then doubled again within three months.
“The previous best result in the six years of our quarterly surveys was 80 growth (Greater Brisbane) suburbs six years ago at the start of 2015,” Mr Ryder said.
“At the same time, the number of plateau markets is the lowest ever, while the number of declining or ‘danger’ markets has dropped from 37, eighteen months ago, to just five now.”
The ‘danger’ markets are Fortitude Valley (unit market), Kelvin Grove (house and unit), South Brisbane (unit), West End (unit) tend to be where there are a higher saturation of apartments such as inner-city suburbs.
Leading the charge for rising sales within Greater Brisbane is the Moreton Bay region which includes 31 Moreton Bay Local Government Areas – a record for any LGA across Australia in the survey’s history.
“This means that three-quarters of the ranked suburbs in the Moreton Bay Region have rising sales activity, a circumstance that makes strong price highly likely in 2021,” Mr Ryder said.
Within metropolitan Brisbane, the northside has collectively performed better with 20 suburbs, including Banyo, Chermside and Kedron, showing steady growth in values.
On the southside, Logan City has 17 growth suburbs, followed by Brisbane-south (with 13), Brisbane-inner (11), Brisbane-east (12), Brisbane-west (7) and Redland City (8).
Even though house price growth has included more suburbs on Brisbane’s northside, some of the biggest median house price gains have been made in the inner, western and southern suburbs, according to the PPI.
St Lucia’s median house price has jumped 36 per cent to $1,525 million while the media at Yeronga has rocketed from 38 per cent to $1,045 million.
Trendy inner New Farm has increased 20 per cent to a median of $1,75 million while Highgate Hill ($1.2 million) and Manly ($945,000) have gained 20 per cent in their median prices.
“The uplift in sales activity in the past six months has been extraordinary,” Mr Ryder said.
“In the most recent quarter, 76 per cent of suburbs had some level of price growth.”
One area to miss out the positive momentum being felt elsewhere in the Greater Brisbane area was Ipswich City with only five growth suburbs.
As for regional areas, the Sunshine Coast is going gangbusters with 30 of 41 LGA showing a rising market, while all seven Noosa suburbs are shooting skywards.
The highest growth occurred in the top end suburbs such as Minyama with a 43 per cent increase in the median to $1,315 million while Sunshine Beach was up 47 per cent and a median of $2 million.
There were 31 Gold Coast suburbs that experienced increases in price growth with the median price at Worongary and Miami both up 18 per cent and Arundel and Clear Island Waters jumping 14 per cent.
“Our analysis shows that 81 per cent of regional Queensland locations have recorded price growth in the past year, with most of them rising more than five per cent,” Mr Ryder said.
RECENT BIG PRICE SURPRISES
BULIMBA – $400,000 above the reserve
Noosaville – $810,000 above reserve.
Camp Hill – $300,000 above reserve
East Brisbane – $251,000 above next best offer
Article Source: www.qt.com.a
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