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.
Brisbane and Melbourne retail markets are peaking: HTW Retail Clock
Three of the eight capital cities are now at the top of the retail market, with Melbourne and Brisbane joining Canberra, according to valuation firm Herron Todd White’s (HTW) latest retail property clock.
The Central Coast, Gold Coast, Ipswich and Coffs Harbour also moved to the peak of market position.
Sydney remained at the approaching peak of market position this month, while Ballarat, Bendigo, Burnie-Devonport and Launceston are holding as rising markets.
Mackay joined Adelaide, among others, beginning their retail market recovery.
Geelong and Illawarra remain at the start of their decline.
There’s not great news for Ballina, Newcastle, Lismore and Toowoomba, which are now declining markets, joining Echuca and Gippsland.
Hobart’s retail market is still nearing the bottom of the market, as is Gladstone, South West WA and now Rockhampton.
Alice Springs joined Perth, Darwin, Cairns, Townsville, Wide Bay, and Emerald at the bottom of the market.
Brisbane seller market expectations highest since beginning of 2018
Nearly 70 per cent of Brisbane home sellers are expecting property prices to increase within the next six months, according to new data.
A survey carried out on 3306 Australian vendors by OpenAgent.com.au last quarter on their expectations for price movement for Brisbane property found respondents were the most optimistic they’ve been since the beginning of 2018, with 67 per cent believing prices would rise within the next six months.
At the end of 2018, 17 per cent of vendors believed Brisbane house prices would go down within the next six months; now, only 7 per cent believe prices are likely to drop over the next six months.
This is despite recent figures which showed Brisbane’s property prices had fallen again, making it one of only two capital cities in Australia to record house price declines over the quarter as well as the year.
The latest quarterly Domain House Price Report, released last week, showed house prices within the Brisbane LGA, where the median house price is $666,500, had fallen over the past year by 1.3 per cent.
However Carson Teh, data analyst from OpenAgent, said sellers remained optimistic about Brisbane prices.
“Though seller expectations in Sydney and Melbourne have now overtaken those in Brisbane, the optimism surrounding Brisbane’s property market has proven to be comparatively more stable over the past three years,” said Mr Teh.
“Home sellers in Brisbane have been expecting prices to be on the rise for at least three years, however, we haven’t seen confidence levels this high since the beginning of last year.”
He said the Brisbane property market had been performing well for many years.
“The Brisbane market hasn’t been as dramatically affected by the recent downturn in comparison to other capital cities such as Sydney and Melbourne,” said Mr Teh.
“Those looking to buy have a little time to make a move before dwelling values reach the next peak, however, those looking to sell could benefit from waiting for the market to bounce back even more,” said Mr Teh.
“Upsizers, in particular, should look to upgrade now before the gap between your current home and next home widens even more, whereas downsizers could do better off waiting for the market to improve.”
Compared to the previous quarter, the proportion of Brisbane home sellers that were expecting price increases has gone up by 28 per cent.
Another 26 per cent of Brisbane home sellers believed prices would stay about the same for the next six months.
First Home Buyers: How to buy with just a 5 per cent deposit
Q: What is the First Home Loan Deposit Scheme?
Q: Sounds risky for the government – what’s to stop millennials from asking the government for cash to live in multi-million-dollar mansions?
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Q: How do you know if your regional centre is big enough to pay the capital city prices?
Q: Part of the reason house prices are so high is that rich people buy property after property. What’s stopping the kids of rich parents leveraging the government for this scheme when they can already afford a deposit?
Q: This all sounds great, what’s the catch?
Q: Just how much are people saving with this scheme? Can you give me a few examples?
Q: Last but not least … why is the government doing this?
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