Coastal areas are helping the Sunshine State climb to centrestage, while Sydney and Melbourne struggle
The Gold Coast and Sunshine Coast are outstripping Brisbane as the markets of choice in Queensland.
According to the Real Estate Institute of Queensland (REIQ), the Gold Coast, true to its name, was the top performer in the market at the close of 2017, with an annual median house growth figure of 7.7%, followed by the Sunshine Coast, where median house price growth was 6.4%.
The Gold Coast continues to be driven by a strong economy that’s been boosted by the infrastructure projects implemented in preparation for the Commonwealth Games. The rental market has also peaked, with the vacancy rate coming in at just 1.1%. This, however, is expected to loosen again once developments are completed, particularly now that the Games are finished.
The third-highest performer was the suburb of Noosa, recording a 6.2% increase in house prices. According to REIQ CEO Antonia Mercorella, Noosa is flourishing because it is a low-supply area that’s seeing high demand from owner-occupiers and holidaymakers.
“Noosa’s world-class beaches, stunning natural bushland settings and wonderful warm community are factors that are fanning the flames of buyer demand. It is inevitable that this will push up prices,” Mercorella states.
“This is an area that could do with more supply, but clearly the topography makes that challenging.”
With the preference for coastal living, Brisbane’s growth has been mild in comparison. Prices in the city increased by only 2.6% at the end of December 2017.
“Brisbane’s doing fine; it’s kind of tracking the Australian average,” says REA Group chief economist Nerida Conisbee.
“We’re seeing steady increases in demand for apartments. The inner north is doing the best, and the market itself is pretty stable.”
Nonetheless, there remains an oversupply in the apartment sector, with many developers offering discounts to get buyers on board. The unit rental market has also been active, with landlords looking to make a return on their investments.
“Potential first-time buyers are being encouraged by their landlords to stay where they are, probably by offering rental discounts and other things,” explains Angie Zigomanis, senior manager of residential property at BIS Oxford Economics.
“People may be delaying their entry into the market because they find it effective to rent for longer.”
SUBURB TO WATCH
TUGUN: Apartments are popular in this seaside suburb
In this suburb of Tugun, located on the Gold Coast/NSW border, units are rising in popularity among buyers.
Values increased 5.2% to a median of $464,205 in the year to February 2018, continuing a positive trend that has been recorded since 2012. Apartments spend less than 60 days on the market before being sold at an average discount of just 3.3%. The rental market is running hot as well, with rents increasing by 6.3% in the 12 months to February. The average return landlords gain here is a strong 4.8%.
Tugun, which sits at the junction of the Pacific and Gold Coast Highways, is a popular suburb with surfers and families; properties located on the beach side of the highway are favoured.
Accessibility: Two majors roads, the Pacific and Gold Coast Highways, run through Tugun
Tourism: Tugun’s beachside location makes it popular with holidaymakers