09 Jan 2019
There are always plenty of people willing to offer an opinion on the property market, and of course, there’s nothing like a sensational headline about impending doom to get people talking.
Most recently, dire warnings about an imminent slump in the Sydney and Melbourne property sectors had a few people on edge. However, more discerning investors saw those claims for what they were, and to coin a recently well-worn phrase - fake news.
The ‘fake news’ headlines and front pages of newspapers are certainly having an effect on the activity of consumers. AVJennings managing director Peter Summers says “consumer confidence” rather than market fundamentals are to blame for the plunge in half-year results, highlighting “extreme media coverage” of the housing market correction a contributing factor in its recent market update.
Mr Summers said he isn’t blaming the media but said the constant reporting on the housing market and extreme elements of some stories had hurt overall confidence.
“We are seeing first-home buyers enter the market, which is pleasing, but second and subsequent buyers are not currently confident to contract prior to selling their existing home, so the transaction chain is slower across the board,” Mr Summers said.
According to the head of Australia’s largest independent real estate network, there is no national property slump and Australians should be more optimistic about our economic and property market outlook.
First National Real Estate chief executive, Ray Ellis says there is much to be optimistic about nationwide and that declines in sections of both Sydney and Melbourne’s property markets do not make up a ‘national market’.
‘Don’t expect to read it in the headlines but we are not in a property slump and the market is not about to crash’ says Mr Ellis.
‘Housing prices in regional Tasmania and its cities are growing strongly, Adelaide, Brisbane and Canberra are all ahead of where they were at this time last year and Brisbane will soon absorb its current supply of new apartments. Perth is about to turn the corner and many regional areas, including some quite close to Melbourne, have extremely positive outlooks. Even Melbourne’s west is up 1.4 per cent over the past 12 months.’
For those who have interest in Sunshine Coast property, there is a natural inclination to look to the southern states for emerging trends, but it’s not always a case of ‘when Sydney sneezes, we catch the cold’. In my opinion, our current and future prospects, couldn’t be further from the truth.
Any downturn in the south is good news for Queensland and particularly, here on the Sunshine Coast.
Think of it as a northern migration, where investors can get more bang for their buck, while our evolving ‘smart region’ benefits from the intellectual property those investors bring in addition to bricks and mortar development.
Mr Ellis also points out that Australians have enjoyed a strongly rising seller’s market since the Global Financial Crisis and that the gains in some areas have been stratospheric. As with all market cycles, he believes it’s now time for the areas that experienced the most rapid growth, and particularly the most expensive properties in those areas, to adjust back to more realistic levels.
‘Those negative adjustments in the highest quartile skew the data significantly, exacerbating a sense of gloom, but again, that doesn’t indicate what’s going on everywhere’ says Mr Ellis.
‘Current circumstances present great opportunities for first home buyers in Sydney and Melbourne, now that foreign and Australian investors have retreated after much tighter lending restrictions were introduced. Plus, a trend of homeowners from Sydney and Melbourne selling up and moving to Tasmania, Adelaide and Brisbane is underpinning moderate growth in those markets.
Looking ahead, the Sunshine Coast is set for conservative growth – nothing sensational about that – just an honest to goodness healthy property market supported by strong employment and sound investment in infrastructure.
These include our new international airport; installation of the high-speed submarine cable that will connect us to Asia and the United States by 2020; the new SunCentral CBD and Sunshine Coast Hospital Health Precinct; and our growing University.
As a region we now have a stable and sophisticated economy, which I believe will provide a safety net for the Coast should there be a cyclical national property downturn.
I feel confident that investors, as well as mum and dad home buyers (especially those migrating from Sydney and Melbourne in search of value for money property), will continue to be attracted to the Sunshine Coast.
The Sunshine Coast property market is solid, and this is the combined effects of having close proximity to Brisbane’s influences; the raft of high value infrastructure projects I mentioned earlier and others to come; and a self-sustaining balance of population with a robust local economy.
For us here on the Sunshine Coast, maintaining affordability is a key planning consideration that will ensure we don’t catch the ‘Sydney cold’ of largely unattainable property prices.
With this firmly top of mind for our decision makers, I feel certain that the future of the Sunshine Coast future has never been brighter.
Source: First National Real Estate/Project Urban/Australian Financial Review