As property prices continue to slide in many mainland capitals, Queensland’s Sunshine Coast has been quietly kicking goals and defying the national trend.
Sydney, Melbourne and Perth led the slide, with median home values falling by 6.2, 3.7 and 3 per cent respectively in the year to September, according to data from CoreLogic.
While Brisbane house values grew by just 2.5 per cent and units fell by 2.2 per cent (to June 2018), it’s a different picture up the highway on the Sunshine Coast, where there’s a new confidence, not only among buyers, but developers too.
The annual median house price there jumped 6.4 per cent in the year to June, while unit prices climbed 4 per cent, boosting price growth over the past five years of 32 per cent and 22 per cent respectively.
It’s a solid performance from a market often perceived as volatile, dependent on the fortunes of its tourism industry. (Those figures don’t include the powerhouse market of Noosa where unit values, for example, soared 10.2 per cent for the year.)
Maroochydore had a vacancy rate of 1.6 per cent in the June quarter. Image: iStock
But the fortunes of the Coast property market now appear to be propelled by some solid fundamentals, with economic growth of almost 15 per cent in the five years to 2016, according to data company economy.id.
It easily outpaced the other, highly publicised regional economies of Geelong (7.4), Wollongong (7.1), the NSW Central Coast (4.5) and Newcastle (4.3) in the same period.
Economics and property professor Mike Hefferan, formerly of the University of the
Sunshine Coast and QUT, says the Coast is riding the wave of a $20 billion infrastructure investment, including: $2.1 billion on a new CBD development in Maroochydore; $1.8 billion teaching hospital; $1.6 billion in improvements to the Bruce Highway; light rail; expansion of Sunshine Coast Airport and university; and a new $7 billion mega-city south of Caloundra.
Hefferan says the big spend is fortuitous timing, with several large projects converging over the past three years.
The area, he says, sells itself, with an attractive climate and relative
housing affordability – compared with major cities – fuelling rapid population growth.
The Coast’s population grew 2.5 per cent in 2017, just behind Geelong and Melbourne, according to Australian Bureau of Statistics data.
Avalon is coming to the Maroochydore riverfront. Image: Supplied
While the council has achieved some broadening of the economy, Hefferan says the population is growing faster than jobs can be created, cementing the Coast’s future as a commuter centre for Brisbane – not necessarily a bad thing, he argues.
“People might be earning in Brisbane, but they’re still buying property here and spending their money here,” he says. “But if that’s the case, good, safe quick transport infrastructure into Brisbane is essential, and that means a heavy rail connection.”
Mosaic Property Group is one developer proving the old axiom that private investment flows from public investment.
Mosaic, which has a large portfolio of completed and planned projects across south-east Queensland, has an office and four developments on the Coast and is confident about the future prospects for the market.
“Years of consideration and research have gone into this strategy and we’ve been closely watching the local economy and its growth as a regional city,” Mosaic managing director Brook Monahan says.
The kitchen at Avalon. Image: Supplied Mosaic has two residential developments at Kings Beach, Caloundra, and another due for completion at the end of 2018 at Coolum Beach.
Their second Coolum Beach project, First Bay, is set to launch in April 2019. It’s recently launched Avalon, a luxury, 87-apartment, $106 million development on the riverfront in Maroochydore.
Monahan says Avalon, which will include an artisan cafe, is another step in the company’s long-term strategy to invest in the Coast, based on the region’s 20-year economic plan, infrastructure and jobs growth, and an undersupply of luxury apartments. Maroochydore had a rental vacancy rate of just 1.6 per cent in the June quarter, according to REIQ.
The company says sales in Avalon have been strong, with locals and residents from Brisbane, Sydney and Melbourne buying either as an investment, a holiday home, or permanent
Mortgage holders rejoice: Most Qld homes rose in value over the past year