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Coast market softer over the quarter


September 2019 | Source: REIQ Queensland Market Monitor

The Sunshine Coast market recorded softer conditions during the June quarter. However, solid price growth over the past year, meant that annual price growth remained some of the best in the State.

The Sunshine Coast’s rental market is also recording more demand than supply with its residential rental vacancy rate down to 2.3 per cent over the June quarter.

Rents are correspondingly rising with landlords achieving solid yields as well.

REGIONAL ECONOMY AND INFRASTRUCTURE INVESTMENT

The big news on the Sunshine Coast continues to be the creation of the new Maroochydore City Central.

In August, locals got their first look at the cutting-edge project when some streets opened for the first time.

The project, set on about 50 hectares, is expected to create 15,000 permanent jobs on the Sunshine Coast as well as inject billions into the local, regional, and State economies over the next two decades.

The new city centre now has four commercial buildings either approved or under construction.

They include the coast’s first hotel in decades in Pro-Invest’s Holiday Inn Express as well as the first-ever private commercial building on the coast to achieve a five-star energy rating under the National Australian Built Environment Rating System (NABERS).

Construction has begun on Evans Long’s eight-level Foundation Place sustainable building with 40 per cent of its 5,000 square metres already pre-committed by tenants.

“This is all about opportunities for employment and career progression on the coast and that’s really important for the community to see and better understand,” SunCentral Maroochydore CEO John Knaggs said.

“Clearly, the key objective is to generate, over the next 20 years, those 15,000 jobs in this place, which are jobs that currently don’t exist on the coast.”

Greater housing diversity and a new Maroochydore CBD will also be accommodated in the Maroochydore City Centre Priority Development Area after the state government approved changes to the PDA’s development scheme recently.

Minister for State Development, Manufacturing, Infrastructure and Planning Cameron Dick said the revised scheme would help accommodate predicted population growth in the Sunshine Coast region.

“According to ShapingSEQ, our South East Queensland Regional Plan, an additional 53,700 dwellings will be needed within Sunshine Coast urban areas by 2041,” Mr Dick said.

“Maroochydore is ideally placed to deliver more apartment living options for the region, and these changes will enable the city centre to grow and thrive.

Maximum building heights have been increased in some areas to accommodate additional growth.

Development will also need to meet various design requirements relating to things like residential privacy and access to natural light.

Sunshine Coast Mayor Mark Jamieson said the approval would help council meet urban infill targets set under the SEQ regional plan and capitalise on new opportunities.

“The increase in residential dwellings from 2000 to 4000 apartments would help our region cater for forecast population growth over the next 20 years,” Mr Jamieson said.

“It will also assist us in pursuing an important objective of locating our region’s growth in areas connected to facilities, services, transport networks and key employment areas.”

HOUSE MARKET

The median house price in the Sunshine Coast LGA was down over the quarter but posted growth of 1.7 per cent over the year ending June to record a median house price of $585,000.

Sales activity also reduced in line with these more moderate conditions, however, the region’s ambitious major infrastructure program augurs well for its future market performance.

UNIT MARKET

Similar to its house market, the median unit market in the Sunshine Coast LGA reduced marginally, by 2.1 per cent, to $404,000 over the quarter and posted a small fall of 0.7 per cent over the year.

The Sunshine Coast SD, which includes Noosa, remained steady at $430,000 over the year ending June.

The Sunshine Coast median unit price posted growth of 18.6 per cent over the five years to June.

As a comparison, Brisbane’s median unit price grew by a paltry 2.3 per cent over the five years.

RENTAL MARKET

The Sunshine Coast rental market has fallen to 2.3 per cent, pushing the region into a tight status for the June quarter.

Median rents for three-bedroom houses, two-bedroom units and three-bedroom townhouses have also increased over the year. The median rent for a three-bedroom house in the Sunshine Coast region increased to $460 per week, up from the previous quarter.

The higher property prices in Noosa have again impacted the gross rental yields achieved in that region with houses recording 3.7 per cent and units 3.8 per cent.

Down the road and a few beaches away in the Sunshine Coast, however, investors are achieving gross rental yields of 4.2 per cent for houses and 4.8 per cent for units.