The factors Impacting the Caloundra and Sunshine Coast Property Market

December 21, 2023

After a slow start to the year, the Sunshine Coast property market rebounded in the second half of 2023, with prices in our area 1.9% higher in October 2023 than in October 2022, according to CoreLogic.

The median Sunshine Coast property now sells for $960,081, and if the current growth trajectory continues, our area will soon be one of Australia’s only genuine ‘million dollar’ regions outside of the major cities.

A long-term growth trajectory

The growth we experienced over the back end of 2023 caps off what has been an extraordinary five years for the Sunshine Coast property market.

Between October 2018 and 2023, the median property price in our region rose 57.2%, CoreLogic reports.

A key reason for this has been a change in demographics, including strong population growth. For the past decade the Sunshine Coast population has been growing at an annual rate of between 2.5% and 3.0%.

To put that into perspective, it means that every year for the past 10, somewhere between 8,000 and 10,000 more new residents have arrived. In all, we’ve added more than 100,000 people since 2009 so that the region’s population now stands at around 365,000.

The changing face of the Sunshine Coast

Traditionally, many of our new arrivals have been downsizers relocating from our big cities. And these buyers are definitely still active in our market right now.

Most downsizers are looking for a low maintenance lifestyle and as a result, we’ve actually seen growth in the price of apartments outpace growth in house prices in many parts of the Sunshine Coast. That’s an unusual trend compared with most of the country, where house price growth has far outpaced growth in apartment prices.

That said, the rise of remote working, high prices in our cities and a newfound emphasis on lifestyle are also driving a new type of buyer to the Sunshine Coast: the migratory Millennial.

The ABC recently reported that the Sunshine Coast had become Australia’s favourite regional destination for internal migration. It also noted that young city dwellers in high paying jobs were making up an increasing number of these relocators.

While this trend of ‘fleeing the cities’ was a feature of the COVID pandemic, it doesn’t look like it will be ending anytime soon. Statistics reveal city-to-region movement still sits 11.7% above the pre-COVID average.

Rental market in high demand

Many of the people coming to the Sunshine Coast don’t buy property, at least not immediately. Instead, a large number choose to rent – often to ‘test the waters’ and see whether they really want to make the change.

This increased demand is putting pressure on the rental market, with SQM Research showing weekly asking rents on the Sunshine Coast have been rising by an average of 10.9% a year over the past three years.

The welcome news for tenants is that the pace of growth slowed to 3.8% a year over 2023. That said, demand remains strong and the vacancy rate continues to hover at just over 1%.

Investors are receiving strong yields, with a median of 4.4% across the region, CoreLogic Reports.

However, for some suburbs and property types, the median yield is far higher still. Realestate.com.au data shows, Little Mountain apartments are returning a median yield of 5.3%. Meanwhile, Birtinya apartments are returning a median yield of 5.1% and Battery Hill apartments are returning an impressive median yield of 5.6%.

The current depth and strength in the rental market was on display recently 109 Little Mountain Drive, Little Mountain. Intense competition with 29 enquiries and 13 applications drove the rent to $900 a week, after we advertised it for $850.

The effect of rising interest rates

Rising interest rates and general cost of living pressures have been gaining a lot of media attention over the last year.

We’ve noticed that inflation and interest rates have put a dampener on the enthusiasm of some potential buyers, however, their impact has not yet been as significant as many expected. We believe there are several reasons for this.

First, a disproportionate number of buyers in our area remain downsizers. Most of these buyers tend to pay cash, meaning they’re less influenced by interest rate movements.

Second, property prices are always set by the laws of supply and demand and decrease in demand has been more than offset by a decrease in listings. CoreLogic observes that listing levels on the Sunshine Coast dropped -15.0% in the year to October 2022, which has put a natural floor under prices.

Third, the tight rental market is encouraging more people to buy for the first home, especially when combined generous government incentives are helping many first home owners onto the property ladder.

Finally, population growth is showing no signs of slowing down – with one analysis even suggesting that we could be set to explode to 580,000 residents over the next 20 years. Unless we build significantly more housing, this is likely to put even more pressure on property prices.

What were the top performing property markets on the Sunshine Coast in 2023?

Our sales team set a new suburb record when they sold 16 Mantis Crescent, Caloundra West, for a terrific price of $1,476,000. The beautiful five-bedroom home attracted multiple buyers and offers.

There has been a definite uptick in interest in the $1m+ price bracket, and we are on the lookout for more properties to satisfy buyer demand.

Below we’ve included some of the top performing suburbs and property types in 2023 in Caloundra and the Sunshine Coast.

Suburb Property Type Median Value Growth Over Past 12 Months
Golden Beach Apartments $767,500 8.5%
Aroona Houses $910,000 4.6%
Caloundra West Apartments $630,500 6.9%
Moffat Beach Houses $1,500,000 4.9%
Moffat Beach Apartments $854,500 15.8%
Pelican Waters Apartments $842,400 6.3%

Want more?

Wishing you and your family a wonderful Christmas and safe and prosperous New Year.

If you’d like to know more about buying and selling on the Sunshine Coast, get in touch.

Caloundra City Realty

Article by Caloundra City Realty

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