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.
Little movement on HTW residential property clock in April
Herron Todd White have released their April property clock, and there has been little movement in the residential sector.
Broome and Canberra were the only locations to change their position on the clock in terms of residential housing values, with both regions moving to ‘rising market’.
There were also few changes to the property clock for the residential unit market last month, with the biggest shift being Canberra moving to a declining market.
oowoomba units shifted to ‘start of recovery’ and Emerald is now classified as a ‘rising market’.
The residential property clock
Top of the clock:
Houses – Albury, Bathurst, Burnie/Devonport, Dubbo, Launceston, and Tamworth’s housing values all remain at the peak of the market.
Units – The best-performing unit markets include five of the same locations that featured at the top for houses: Albury, Bathurst, Burnie/Devonport, Launceston, and Tamworth.
Starting to decline
Houses – Wodonga
Units – Wodonga
Canberra’s unit market was the only area classified as in decline.
Approaching bottom of the market
Bottom of the market
Houses – Albany, Geraldton, and Kalgoorlie remain at the bottom of the market.
Units – Albany, Geraldton, and Kalgoorlie all make another appearance for units, along with Sydney and the Whitsunday region.
Start of recovery
Houses – Alice Springs, Bundaberg, and Darwin’s housing markets were all classified as being at the start of their recovery.
Units – Alice Springs, Brisbane, Bundaberg, Cairns, Canberra, Darwin, Emerald, Ipswich, Melbourne, Perth, South West WA, Toowoomba, and Townsville’s unit markets are also starting to recover.
Houses – Once again, it’s a crowded field on the rising market end of the clock, with Adelaide, Adelaide Hills, Ballina/Byron Bay, Barossa Valley, Brisbane, Broome, Cairns, Canberra, Central Coast, Coffs Harbour, Emerald, Gladstone, Gold Coast, Hervey Bay, Hobart, Illawarra, Ipswich, Karratha, Lismore, Mackay, Melbourne, Mildura, Mount Gambier, Newcastle, Perth, Port Hedland, Rockhampton, Shepparton, South West WA, Southern Highlands, Sunshine Coast, Sydney, Toowoomba, Townsville, and Whitsunday housing markets all on the rise.
Units – Adelaide, Adelaide Hills, Ballina/Byron Bay, Barossa Valley, Broome, Coffs Harbour, Dubbo, Gladstone, Gold Coast, Hervey Bay, Hobart, Illawarra, Karratha, Lismore, Mackay, Mildura, Mt Gambier, Newcastle, Port Hedland, Rockhampton, Shepparton, Southern Highlands, and the Sunshine Coast’s unit markets were all classified as rising.
Approaching peak of the market
Geelong was the only location classed as approaching the peak of the market for both houses and units.
Article Source: eliteagent.com
Is now a good time to buy property? Nearly 40 per cent of people think so, despite record house prices
House prices are at historical highs, records tumble every weekend at real estates auctions around the country and price growth rates continue to rise.
Despite those facts, nearly 40 per cent of Australians believe that now is a good time to buy.
According to new research from the financial comparison website Canstar, 38 per cent of those surveyed believed that it was a good idea to buy property now.
Canstar group executive financial services Steve Mickenbecker said that of those who thought it was a good time to buy, many were expecting prices to continue to rise. They also cited low interest rates as another reason.
“Either way there will be no shortage of buyers as sellers come out,” he said.
“Today the market is overwhelmed with buyers, auctions are intensely competitive, open houses crowded, and unconditional contracts are becoming the norm. Low housing supply on the market has intensified the fear of missing out. We are in a low interest rate frenzy.”
Of the 39 per cent who said they didn’t think now was a good time to buy, 45 per cent said the market was currently in a bubble, inflated or under-supplied.
Mr Mickenbecker said the almost-equal number of respondents who said it was a good time and a bad time to buy indicated the rapid growth was slowing down.
“The Reserve Bank and APRA are likely to welcome a leading indicator of a return to balance, tempering growth and discouraging bank excess, but at the same time strong enough to support sustainable economic growth that won’t implode,” he said.
“The Reserve Bank doesn’t want to hurt the broader economy with higher interest rates and currency and is hoping for healthy property prices to support spending, but at a slower pace, so first-home buyers can afford to stay in the race.”
The latest quarterly Domain House Price Report, released last week, found price growth had hit a 32-year high in March.
Sydney’s median house price for the last quarter was $1.3 million, and Melbourne’s reached a record high of $975,000. Hobart’s was just above $600,000, and prices in Canberra grew 20 per cent in a year to a median of $930,000.
Brisbane and Adelaide’s median house prices were at their highest ever, and Perth’s was at its highest since December 2015. Darwin’s median house price was at its highest since December 2017.
CoreLogic figures released this week showed the rapid growth had started to slow, but prices continued to grow in every capital city and regional market in April.
“First-home buyers have been anything but deterred from the market and have leapt in with gusto, encouraged by government incentives,” Mr Mickenbecker said. “They are increasingly competing with investors able to make unconditional offers and blow them away at auctions, and would clearly welcome a more stable market.
“The market continues unabated for now, but a slow and steady future is hopefully ahead of us.”
Article Source: www.domain.com.au
CoreLogic: Home values continue to rise but the pace of growth loses steam in April
Australian housing values lifted by 1.8% in April according to CoreLogic’s national home value index, with the monthly pace of capital gains easing from a 32-year high in March (2.8%). Although growth conditions have slowed, housing values are still rising at a rapid pace, up 6.8% over the past three months to be 10.2% higher than the COVID low in September last year.
CoreLogic’s research director, Tim Lawless, says the pace of capital gains could slow further over the coming months as inventory levels rise and affordability constraints dampen housing demand.
“The slowdown in housing value appreciation is unsurprising given the rapid rate of growth seen over the past six months, especially in the context of subdued wages growth. With housing prices rising faster than incomes, it’s likely price sensitive sectors of the market, such as first home buyers and lower income households, are finding it harder to save for a deposit and transactional costs.”
There is already some evidence of fewer first time buyers in the market, with the Australian Bureau of Statistics reporting a -4.0% fall in the value of first home buyer home loans through February, the first drop since May last year.
Despite the slowdown, positive housing market conditions remain geographically broad-based with every capital city and ‘rest-of-state’ region continuing to record a lift in dwelling values over the month. Darwin (2.7%) and Sydney (2.4%) recorded the largest month-on-month rise in dwelling values, while Perth values recorded the lowest rate of growth amongst the capital cities at 0.8%.
The four smallest capital cities recorded double digit annual growth (Adelaide 10.3%, Hobart 13.8%, Darwin 15.3% and Canberra 14.2%), reflecting a smaller COVID-related disruption and an earlier start to the growth phase last year. Melbourne is recording the lowest level of annual growth (2.2%) due to a larger downturn, attributable to the extended lockdown period last year.
The broad trend of houses outperforming the unit sector continued through April as higher density styles of housing experienced less demand amidst elevated supply across some inner city precincts. At the combined capital city level house values (8.6%) have risen at double the pace of unit values (4.3%) over the first four months of the year.
“A preference shift away from higher density housing during a global pandemic is understandable, however a rise in flexible working arrangements also seems to be supporting greater demand for houses around the outer-fringes of capital cities. Relatively weak investor activity, compounded by a supply overhang in some high-rise precincts, is also dampening price growth in unit markets,” Mr Lawless said.
Article Source: www.corelogic.com.au
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