Investors in the Sunshine Coast property market have been active, according to the latest Herron Todd White (HTW) residential report.
The valuation firm took a look at the rental yields across the nation.
The report notes market sentiment has improved which has in turn instilled confidence in the marketplace.
The main driver of this sentiment has been the major infrastructure projects currently under way across the coast.
The current low interest rate environment has also had investors looking to property to increase their returns.
Across the coast, gross yields normally tend to range between 4% and 15% which reflects the relative risk on investment.
“Properties situated within areas underpinned by re-development potential or situated in unique and sought after locations tend to be at the lower end of the yield range,” the valuation firm said.
A yield at the higher end of the range indicates the location, condition of the property and the additional maintenance costs required.
Units within the main tourist precincts can also achieve gross yields up to 15% however with high body corporate and management fees, these properties tend to show net yields in the 2% to 6% range.
“There has been a large increase in dual occupancy homes constructed across the coast with a main dwelling typically providing three- bedroom accommodation and an attached one or two bedroom unit,” the valuation firm continued.
“These properties have been primarily purchased by investors and have been selling with gross yields between 5.9% and 6.3%.”
The report suggests slightly higher yields can be achieved through the hinterland townships with properties comprising three to five flats in the Nambour area achieving yields in the 7% to 8% range.
Typically, these properties are older with ongoing maintenance required.
“In the prestige market, we have started to see an increase in the number of investors,” the valuation firm commented.
“This market is typically difficult to gauge given that there are a number of different drivers in the investment decision.
“This market is closely related to the southern markets of Sydney, Melbourne and Brisbane, so at the moment has been pretty good.”
A number of investors in this segment are certainly purchasing for a position or lifestyle choice and in quite a number of cases, with a view to the investment being the future retirement home and principal place of residence.
Therefore, a higher yield is not always driving the purchasing decision.
“All in all, the investment market on the Sunshine Coast has been pretty healthy.”
Perfect party pad: Ultimate Noosa Waters entertainer, complete with nightclub, up for sale
Dreaming of a holiday home that’s quite literally got it all? With a water frontage of 60 metres and two private jetties, this expansive Sunshine Coast waterfront spread is turning heads and should attract some deep pockets.
Set on a 2976-square-metre block and dubbed Hayven, it has 13 bedrooms, 12 bathrooms and room for more than 30 guests, which along with a 25-metre pool, cabana, and an actual nightclub make it a pretty impressive place to entertain.
The home also boasts a commercial kitchen, caretakers’ quarters, tennis court, gym, wine cellar, and media room.
Hayven is the much-loved holiday home of businessman Donald Hay and his wife, Maribi, who wanted a house with a layout constructed from several smaller areas linked together to allow for easy movement.
Designed by architect Shane Thompson, it has price expectations in excess of $12 million.
Principal of Queensland Sotheby’s International Realty Paul Arthur described the home as one of the “premier properties on the eastern seaboard”.
With nothing else like it in Noosa, he said, the agency had had plenty of interest from interstate, with inquiries also beginning to come in from overseas.
“Obviously the home itself, it’s very sizeable in its scale,” Mr Arthur said. “I think the buyer could be someone who has a large extended family, who wants to have something generational.
“The entertaining areas, the family area – everything is of a scale that if you’re entertaining three or 50, it would be completely comfortable.”
Mr Arthur added that many of the home’s design features were ahead of their time, with Mr Hay having a vision for the property, and it looked brand new.
“In the design of the property, the layout, the way that they’ve utilised the space, they’ve built something quite timeless,” he said.
Reed & Co’s principal Adrian Reed is co-marketing the property, which in his eyes is “one of the most extraordinary homes to be built in Queensland”.
“It is a home that rivals some of the great six-star resorts around the world,” he said.
Born in Adelaide, Mr Hay reportedly struggled with dyslexia in school, but found significant success in the business world.
He founded the brush and broom company Hayco in 1983 in Hong Kong – following in his grandfather William E. Hay’s footsteps – and originally zeroed in on the industrial, household and hygiene brush market.
Hayco later diversified into barbecue tools, gardening tools and custom fabrics. It now employs more than 6000 people and ships products to more than 60 countries, with a factory opening in the Dominican Republic in February.
Mr Hay passed away from melanoma in July of this year, aged 76, and was survived by his wife, children and grandchildren. Mrs Hay has said that while the home would be missed, she wants the new owners to enjoy the property as much as her family has.
Records show the Hays originally bought the block at 32-36 The Anchorage in 1999 for $775,000.
The most expensive home sold in the Noosaville area so far this year is at 19 The Promontory, where a five-bedroom home sold for $4 million in January.
However, a six-bedroom Paul Clout-designed mansion with 45 metres of water frontage cracked the $10 million mark in 2017, with 29-31 Wyuna Drive scoring $10.301 million in November.
That sale, along with another at 312 Teewah Beach Road, broke the Noosa price record at the time.
Property investors should be considering the Sunshine Coast: Hotspotting’s Terry Ryder
I believe real estate markets are driven more by local factors than national ones. While many commentators are placing great significance on interest rate reductions as a prime driver of real estate markets, I’m much more interested in what’s going on the coalface of local economies.
And, in those terms, I put a high rating on the Sunshine Coast as a market that investors of all kinds should be considering. I regard the Sunshine Coast as the strongest market in Queensland at the moment and indeed one of the strongest in Australia.
I see events happening there as an economic revolution, which is shifting the Sunshine Coast from tourist destination to international city – a massive transition that’s happened in the past 2-3 years and continues to happen.
I recently completed a comprehensive 30-page report called The Sunshine Coast: Australia’s Most Compelling Growth Story, in which I note that the Sunshine Coast economy was no longer predominantly reliant on tourism because of the creation in recent years of strong health, education and technology industries – all part of an infrastructure program totalling more than $20 billion.
Economies reliant on tourism traditionally fail to deliver sustainable real estate growth. But the Sunshine Coast has diversified and strengthened and is now, I think, the nation’s most compelling growth story.
It has a $17.7 billion economy, making it one of the largest regional economies in Australia, and on infrastructure it’s outspending several of the nation’s capital cities.
The health, education and technology sectors – including the new $5 billion health precinct – are bringing new residents to the Sunshine Coast and this is providing strong impetus to the real estate market, notably at the Top End. The median house price for Noosa Heads has increased 40% in the past three years, while the median apartment price has jumped 25% in the past year.
In terms of becoming an international city, the Sunshine Coast will soon have an international airport and an international broadband network connection to Asia. Earlier this year the Sunshine Coast was named in the Top7 Intelligent Communities of 2019 by the global Intelligent Community Forum, alongside major international cities like Chicago.
Central to everything that’s happening in the region is the creation of a Sunshine Coast CBD from the ground up – a $5 billion enterprise which is now under way on a 53ha greenfield site in central Maroochydore.
The new city centre has attracted investment from local, national and international firms interested having an early presence in the growing region.
The Sunshine Coast is among the top 10 leading regions in the country for employment generation, adding more than 20,000 jobs over the past five years. The $1.8 billion Sunshine Coast University Hospital (SCUH) has created 5,000 jobs since opening in April 2017 and the new Maroochydore City Centre is forecast to provide 15,000 jobs over the lifespan of the 20-year project and inject $4.4 billion into the economy.
In addition, the Sunshine Coast International Broadband Network will deliver 800 new jobs once it’s operational next year and will deliver the fastest data connection to Asia from the east coast of Australia.
Part of the economic revolution of the Sunshine Coast in recent years has stemmed from the region’s growing reputation as an innovation and technology hub.
Demographer Bernard Salt has described the Sunshine Coast as “the entrepreneurship capital of Australia “because of the large number of knowledge-based start-ups and small businesses such as information technology, clean-tech, creative industries, aviation and education.
The population of the Sunshine Coast is forecast to reach 580,000 by 2041, an increase on the previous forecast of 558,000.
The Sunshine Coast is one of Australia’s fastest-developing economies, growing each year at rates well above national averages and is expected to expand to $33 billion by 2033.
As a consequence, our new Spring edition of The Price Predictor Index has found that the Sunshine Coast has more locations with rising sales activity than any other municipality in Australia. And that kind of outcome is likely to create sustainable long-term price growth.
Sand and surf: The demand for beachside properties
In a recent article for the Australian literary journal Quadrant, architectural historian Philip Drew wrote that most of us, at some time, had toyed with the fantasy of “swapping a stressful city existence for a sensual carefree existence close to the surf”.
According to ABS data, more than 80 per cent of the population lives within 50 kilometres of the coast, making us one of the world’s most urbanised coastal dwelling populations. But, of course, only a lucky few can lay claim to a beachside dwelling – a home within easy walking distance of sand and surf.
Sunshine Coast buyer’s agent Ann Lindner of Property Business says spending time at the beach is an integral part of the great Australian dream.
“[You can] take the kids, the dogs and boogie boards, eat fish and chips and stay for the day,” she says. “Nearly everyone has childhood memories of holidays at the beach and now they have families of their own and they want them to experience it too.”
Stockland senior development manager Matt Patullo says a visit to the beach always leaves him in a good frame of mind.
“It’s such a beautiful thing to live next to,” he says. “Living near the beach promotes physical activity and general well-being in addition to the benefit of having a beautiful environment in which to spend quality time with family and friends.”
Lindner says most of her clients are keen to live on or close to the beach, and/or have water views.
“Particularly expats or retiree clients who want to walk to the beach, be it from a unit or a house, and they have the funds to purchase them,” she says.
Lindner says the Sunshine Coast offers 60 kilometres of pristine beaches, stretching north from Caloundra to Noosa. “[We’ve got] surf beaches, calm beaches, walking beaches and dog beaches,” she says. “There’s something to suit everyone both in style and budget.”
Lindner says quality properties sell quickly and usually attract multiple offers.
Stockland’s Bokarina Beach is a case in point with about one-third of the current release of 35 beach homes already sold. Set a 400-metre walk from the beach with lake and park views, the homes have been designed by Ellivo with high-quality finishes and a coastal aesthetic.
Patullo says the employment opportunities offered by the new Sunshine Coast University Hospital and Stockland Birtinya Shopping Centre are almost as compelling a drawcard as the gorgeous beachside location.
“There’s not many locations where you can live affordably within proximity to beautiful beaches and be close to employment,” he says. “It’s a really unique proposition before you even start talking about the homes themselves.”
Patullo says the strong appetite for beachside homes has Stockland very optimistic about the next stage of releases at Bokarina Beach.
“This is one of the last releases [of beachfront land in the Sunshine Coast] of such a scale and it’s a unique opportunity to really craft an amazing community,” he says. “You’ve got access to jobs, lifestyle, beaches, entertainment and leisure precincts which are key in nurturing a highly liveable and thriving community.”
With a limit to the number of beachside properties available both now and in future coastal development around the country, it’s little wonder established properties are slow to change hands and often claim record prices and bold headlines.
Last year four of Queensland’s top six residential sales were beachfront homes, and included the Sunshine Beach home of tennis great Pat Rafter, who has moved to another coastal gem, Byron Bay.
As Philip Drew concludes in his book The Coast Dwellers: Australians Living on the Edge, “it is the coast, not the central heart of the continent, that has shaped the Australian identity”.
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