The Kawana area of the Sunshine Coast is presenting as a good investment area. The demand for housing and infrastructure are predicted to create 32,000 jobs here alone. Newly created employment over the last year and an undersupply of property are producing an area in need of more dwellings.

Sunshine Coast Real Estate Market Recovery Gains Momentum

JULY 14, 2014 1:45PM
www.news.com.au

A few words ... slow, Sunshine Coast, sizzle.

Put them together for a perfect picture of the Sunshine Coast real estate market. The slow refers to a market recovery. For the Coast, it’s been a long time coming. The sizzle — finally, at last, the recovery is here, and momentum is building.

The Sunshine Coast is a potential big winner in this property cycle.

We’re not talking boom — simply strong employment growth, tight rental supply and under-building, that make the Coast an attractive alternative to capital city investment. Unlike other markets across southeast Queensland during the previous market upturn, property values on the Sunshine Coast did not necessarily overheat.

The bigger impact in the region stemmed from a collapse in tourism and retail spending and a slowdown in new residential development. That saw employment levels impacted in what traditionally have been three of the region’s largest employer groups. And therein is part of the battle the Coast has been fighting — a lack of employment depth. Employment opportunities generally lead to an increase in population, a higher demand for dwellings, and an increase in construction, sales, rents, and a return to price growth. Employment on the Coast is now growing again.

The new infrastructure being delivered around the Kawana area — namely Australia’s largest medical precinct and hospital — is a “game changer” adding employment strength to the Sunshine Coast, while also helping to reduce the cyclical nature of its employment. Some 14,000 new jobs have been created in the region over the past 12 months, with a total of 32,000 expected in the Kawana area on infrastructure and housing build.

Another big plus to the Sunshine Coast property cycle this time around is the undersupply of new stock, and also the very tight local rental market.

The Sunshine Coast now has a relatively young demographic profile. While it does have a growing retirement and aged-care-related market, these two buying segments are quite small when compared with the size and growth expected in the young renter and first-home buyer markets. These demographic shifts will see the need for more affordable property and more accommodation for a young rental market — fuelling the need for more one and two-bedroom apartments.

Right now, detached houses are enjoying a lift in weekly rents, but the strongest rental and long-term demographic demand will be for attached product. The key thing here is affordability. Investors should look to buy property priced largely less than $400,000 for second-hand stock, less than $500,000 for new apartments; and under $600,000 for new house and land. At these price points, property should be met with consistent rental demand and attract owner-resident buyers on resale.

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