The Sunshine Coast's housing and rental markets appear to be facing a severe undersupply, leading to a rapid increase in sales prices and rents, according to SQM Research and Image Property.

The number of properties available for sale in the region has reached its lowest level in more than a decade. The undersupply in the rental market is even worse, with vacancy rates hitting 0.4%, the lowest in more than 15 years, according to SQM Research.

Matt Nickerson, sales agent for Sunshine Coast at Image Property, said the region’s strong sales market can be attributed to local buyers, contrary to popular belief that interstate purchasers are the main drivers.

“Local buyers are out in force, competing strongly for the few listings available. We do have a lot of enquiry from interstate, and quite a few sales, but this is actually motivating local buyers to make their move sooner rather than later," he said.

Nickerson said the low levels of sales stock meant property prices were rising, with multiple offers often the norm.

“With interest rates so low, many buyers are prepared to pay a bit more to secure a property in a location that they will live in for the long term," he said.

In terms of the rental market, Nickerson said the region was undersupplied long before the pandemic.

Figures from the Residential Tenancies Authority showed that the median weekly rent for a three-bedroom house in the region was $490 in December, representing an annual increase of 6.5%. 

"We are beginning to see more investors active in the market, which may start to increase the supply of rental properties somewhat," Nickerson said.