THE lure of affordability, lifestyle and world-class beaches made southeast Queensland’s coastal markets the stars of the property sector in 2017.
While home values grew just 2.4 percent in Brisbane over the past 12 months, they jumped nearly 7 percent on the Gold Coast, while houses climbed in value by more than 7 percent on the Sunshine Coast, according to the latest data from property analytics firm CoreLogic.
Half of the top 10 property sales in Queensland last year were made on the Gold Coast; totalling $48.9 million.
And some agents say the markets are set to strengthen further in 2018 as Sydney and Melbourne homeowners cash out of their million-dollar homes in favour of a more laid-back, affordable lifestyle in the tropical north.
The REIQ’s latest Queensland Market Monitor shows the median house price in the Sunshine Coast statistical division jumped from $557,500 in June to $570,000 in September, while the Gold Coast achieved a new house price record of $606,000.
The Queensland government recently declared the number of interstaters migrating to the state was at its highest level in eight years, with 15,716 people moving here in the year to March 2017 — most coming from New South Wales.
CoreLogic senior research analyst Cameron Kusher said both the Gold Coast and Sunshine Coast property markets had benefited from that boost in interstate migration more than Brisbane.
Ray White Surfers Paradise holds its major auction event of the year later this month to coincide with the January holiday period when many interstate and overseas visitors flock to the Gold Coast.
More than 100 properties will go under the hammer at its annual ‘The Event’ on January 28, with many holiday homes and investment properties set to sell to interstate and local investors.
Ray White Surfers Paradise chief executive Andrew Bell said the region had recorded solid sales figures in 2017 thanks to economic stability, job creation and steady population growth.
Mr Bell said the property market at the northern end of the Gold Coast had strengthened considerably because of new medium and high rise development in areas like Southport and Hope Island.
“That’s where all the new development is and it’s given people a lot more opportunity,” he said.
Mr Bell said suburbs like Coomera and Pimpama were had also become “powerhouses” for house-and-land developments, attracting demand from interstate.
“It’s not just people buying holiday homes,” he said.
“It’s just getting so difficult to live in Sydney with the cost of living and the traffic.
“People are saying ‘it’s time to move!’ and I think they’re seeing the Gold Coast as being the best it’s ever looked.”
And with vacancy rates of less than 1 per cent on the Gold Coast, Mr Bell said an increase in home construction was more than welcome.
“We can have 20 plus people turn up to an open home, so we desperately need more investors to buy some stock to help with this huge demand from tenants,” he said.
Kollosche Prestige Agents managing director Jordan Williams said the Gold Coast property market experienced periods of strength and weakness in 2017, but he predicted a bigger year in 2018.
“I know for a fact that for the last half of last year a lot of buyers were sitting on their hands reading the negative articles that said the market was going to crash,” Mr Williams said. “They’ve bought off me since then and realised its actually going to continue to improve.
“I think it’s going to be an exciting year.”
Mr Williams also said the majority of homes he sold were cash contracts, unlike the pre-GFC days.
“We have very affluent local and interstate buyers who are fourth, fifth and sixth generation wealthy,” he said.
“Our vendors who own these homes are also affluent, successful people and they don’t muck around with finance and building and pest inspections.”
Kristian and Haley Hughes are selling their five-bedroom waterfront home at 31 Pilot Court, Mermaid Waters through Kollosche Prestige Agents.
They’ve lived there for nearly three years, but have decided to sell and rent in the area so they can use the capital to fund Mrs Hughes’ new make-up venture.
Mrs Hughes, who runs The Institute of Makeup beauty school, said Mermaid Waters had benefited from the growth in popularity of nearby Burleigh Heads.
“I feel it’s becoming the new central location — nestled between Burleigh and Broadbeach,” she said.
The Hughes are hopeful they’ll benefit from the growth in the market over the past 12 months, with the median house price in Mermaid Waters increasing by more than 17 per cent.
Their family home is decked out with floor-to-ceiling glass, which captures spectacular 180 degree views.
“For someone who wants to make it their forever home, they’ll never run out of room,” she said.
“It was hard finding a place to put an offer on even then, because (homes) were selling before they even went to market.”
Further north, Noosa was the standout performer in 2017.
REIQ figures show Noosa was the state’s top performing market in the three months to September, recording annual house price growth of nearly 10 per cent.
Over the past five years, Noosa’s median house price has jumped by more than 40 per cent.
Tom Offermann Real Estate principal Tom Offermann said the company ended 2017 with eight sales averaging $5.9 million each.
The agency sold a sprawling waterfront home with a drive-through boatshed, two jetties and a boat ramp at 29-31 Wyuna Dr, Noosaville, for close to $11.9 million late in 2017 — setting a new record for the area.
“It’s not just the prestige properties that buyers are targeting,” Mr Offermann told The Courier-Mail.
“There are good opportunities for buyers at all levels who want to invest or live here.”
Another driving factor behind demand for the Gold Coast and Sunshine Coast markets is a lack of stock, but BIS Oxford Economics expects rising supply over the next three years to slow forecast price growth.
Another coastal market in Queensland that performed better than expected in 2017 was Cairns.
BIS Oxford Economics noted Cairns had benefited from improved tourism and a deficiency of dwellings, which was estimated to have pushed the median house price up by 20 per cent in the past five years.
It expects home prices to grow another five per cent until 2020.
Originally published: www.goldcoastinvestor.com.au
The Brisbane suburbs where property values will rise
The Brisbane suburbs where rent prices have increased most
Brisbane’s rent prices have remained relatively steady over the past 12 months, but that doesn’t mean there hasn’t been any big changes in rent prices across the city. So which suburbs have seen the biggest price hikes, and which have seen the biggest reductions?
When it comes to units, Bardon recorded the highest jump in rent price in the past 12 months. The north-western suburb saw an 18 per cent increase up to a median weekly rent price of $360, which is consistent with a 20 per cent increase over the past five years.
Brooke Rowley, property management business developer for Ray White Paddington, said smaller units have recently popped up in the suburb and were likely to account for the bump in price.
“We have height restrictions so we don’t have all the high-rises, but we do have a lot of smaller units and townhouses,” she said. “They’re not high rise, the top would be three levels. But nice, and fairly new.”
Rowley said most of the rental interest in the area came from more established renters who were interested in the location and surrounding amenities.
“Bardon is the catchment zone for two very good schools, Bardon State School and Rainworth State School. A lot of people look for the good schools, and then want to stay in that area. [We see] more professionals sharers and families because of the schools, and close proximity to the city. [There’s also] easy access to get to Mt Coot-tha and the western suburbs.”
Elsewhere, Yerongpilly in Brisbane’s south saw a strong 14.3 per cent increase in unit rent prices year-on-year, while nearby suburb Holland Park jumped a similarly strong 11.1 per cent.
Meanwhile, house rent prices increased the most in Fortitude Valley, with the central suburb posting a 16.3 per cent jump. The median weekly rent price was $500 in the area. Leasing associate Connor Hadwen, of Living Here Cush Partners, said the increase was likely due to the market catching up to the recent apartment boom.
“The oversupply of apartments has mostly been filled at the moment,” he said. “So compared to five years ago, the rental prices are returning to normal levels. It’s just the suburb growth matching back to normal levels.”
In fact, Domain economist Trent Wiltshire said the most notable broad trend in Brisbane’s rental market in the past 12 months was a 6.25 per cent increase in rent price for units in inner-city Brisbane suburbs like Fortitude Valley.
“That’s a surprise given what we know has been happening in the Brisbane apartment market in the inner city,” he said. “Brisbane’s gone through a huge apartment building boom over the last few years. Despite that, rents have increased over the past year by 6 per cent.
“It’s only up by 6 per cent over five years, so it has been held down over the last few years by the big building boom, but it’s just jumped in the past year. This says to me that there’s ongoing strong demand for new apartments.”
Mr Hadwen said he had seen strong interstate and international interest in Fortitude Valley, and its surrounding suburbs of New Farm, Teneriffe, and Newstead.
“We tend to see not huge families coming to live here, but people moving here for employment opportunities. [People] wanting to live close to the city.”
Another suburb that posted a large increase in house rent price was Fig Tree Pocket in Brisbane’s south-west. It saw a 12.5 per cent jump for a median weekly rent price of $675. Closer to the CBD, Ashgrove saw an increase of 10.6 percent making for a median weekly house rent price of $575.
On the other end of the spectrum, the apartment rental market in Rocklea in Brisbane’s south saw the biggest dip across the city, with rent dropping 8.9 per cent year on year consistent with an 8.9 per cent drop in the past five years. The current median weekly rent price for units in the area is $280.
When it comes to houses, the western suburb of Chelmer saw the biggest drop at 11.2 per cent. This could be an anomaly, however, given the area’s 26.2 per cent increase over the past five years. The current median weekly rent price for houses in the area is $675.
Queensland leads the way in market recovery
Demand has started to increase in the property market on the back of the recent federal election results and interest rate cuts, with Brisbane and Mackay in Queensland leading the road to recovery.
REA’s Property Outlook for July has revealed the “ScoMo bounce” and two interest rate cuts were breathing new life into Australian property, with demand starting to increase and slowly flowing through to many indicators.
Search activity has seen a bump, particularly in Melbourne and Sydney’s hard hit markets, clearance rates in premium suburbs are getting back to high levels, and many mining towns are returning to growth after five years of negative conditions, according to the report.
realestate.com.au’s Chief Economist Nerida Conisbee said rental growth in these areas started some time ago, but a recovery is now following suit.
“Queensland is leading the way in the recovery,” Ms Conisbee said in the report. “Brisbane has been the first capital city off the block in terms of price growth, and Mackay is right now the top regional growth area in Australia.”
She added that jobs growth is also driving rental demand, which continues to be highest in Hobart, Gold Coast and Melbourne, and while the extreme price growth in Hobart now seems to be over, Launceston is taking over. Regional Victoria was also doing well, with many suburbs in Ballarat, Bendigo and Geelong experiencing never before seen property demand.
But according to the report, any real uplift in the number of people listing properties for sale is yet to be seen and pricing data is yet to reflect a change in conditions, and Ms Conisbee warned that while much of this sounds promising, there are some dark clouds looming on the horizon.
“Although buyers love an interest rate cut (we see an increase in search activity onrealestate.com.au almost as soon as it is announced), the Australian economy isn’t looking particularly healthy,” she said in the report.
“While many economic indicators have been poor for some time now, the bright spark has always been low unemployment. With this creeping up and the Reserve Bank pushing through two interest rate cuts very quickly, the positive effect of cheaper finance may not be enough to offset the fact that people are beginning to lose their job. Could it be that the worst for property is still be to come?”
Ms Conisbee said if the interest rate cuts were enough to stimulate the economy and property prices continued to see a rebound, we were still looking at a very different property market to what it was like during the boom, with investor lending down 45 per cent from peak and unlikely to make a full recovery any time soon.
“Buyers from Asia, a key market for new development, have dropped dramatically,” she reported. “Over the past 12 months alone, property seekers from China have dropped by over 60 per cent to the lowest level we have ever recorded, and confidence in the new apartment sector is low following some high-profile structural issues.”
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