Location transitioning from a holiday hotspot to an investor’s haven with huge growth potential, according to Place Advisory
20 January 2014, Brisbane –
Queensland’s Sunshine Coast is transitioning from a holiday hotspot into an investor hotspot with huge growth potential, according to the latest research from Place Advisory.
Lachlan Walker, Place Advisory Director, said this once sleepy, casual tourist location was transforming into an area with flourishing employment opportunities and massive infrastructure development.
“Nothing epitomises the Queensland summer holidays more than a visit to the Sunshine Coast,” Mr Walker said. “Beaches in areas such as Noosa, Mooloolaba, Caloundra and Alexandra Headland are what Australia is famous for, and many Queenslanders have grown up holidaying in this region on a regular basis.
“But soon the Sunny Coast will not just be synonymous with words like ‘tourism’, ‘travel’ and ‘holiday’ – the Sunshine Coast is becoming a property hotspot, with huge growth potential.
“For the savvy investor, buying into this area is a chance to take advantage of the renewed infrastructure, the emerging luxury market, and the subsequent increase in buyers with cash.”
The Sunshine Coast post- GFC
It hasn’t always been smooth sailing for the Sunshine Coast, according to Mr Walker.
“Like the rest of Australia, the region was significantly affected by the Global Financial Crisis (GFC),” he said. “It had an extremely adverse effect on this area, causing sales volumes to diminish dramatically, representing only 30% of the prior highs and price growth remaining subdued long after the economic crisis was over.
“Although the Sunshine Coast is supported by multiple economic pillars including tourism, construction, manufacturing and retail, these areas were all hit hard by the GFC, leaving the region struggling to recover.
“Over the past couple of years the Sunshine Coast residential market has made solid progress however, and there are numerous factors which will see it set to peak in the next coming years.”
Ultimately, the transformation of the Sunshine Coast comes down to infrastructure and projects, and the subsequent employment opportunities being created, said Mr Walker.
“As a region where economic growth has generally been dictated by tourism, the Sunshine Coast is undertaking a multitude of infrastructure projects to bring about a more sustainable long term,” he said.
As shown in the table below, almost $790 million will be spent on major infrastructure projects in the health and transport sectors in the area – a daily spend of $1.5 million on development between now and expected completion!
The Sunshine Coast University Hospital (SCUH) is the largest project in the region, and began construction last year. This $2 billion development will generate 2,000 construction jobs, and 3,500 permanent jobs once completed in 2016, and is anticipated to inject approximately $680 million a year into the local economy.
Meanwhile, the Coast Connect is a $350 million State-funded public transport upgrade to assist in the stimulation of economic growth and to cope with the expected population boom. Development will begin in areas that have been identified as high priority, and will conclude in those areas of a lower priority. It is expected to be completed in stages from 2014- 2019.
The final project is the Airport Expansion Project; a $436 million construction of a new runway, new passenger terminal, new retail facilities and expansion of the existing aviation business precinct. This project will provide 5,000 new permanent jobs upon completion, with an injection of around $1.6 billion in regional economic benefit between 2015 and 2050 due to increased tourism, business growth and freight capacity.
Sunshine Coast Major Infrastructure Projects
The Luxury Market
Traditionally, the Sunshine Coast has been a popular destination for those looking to build their beachside mansion, said Mr Walker.
“In particular the suburbs of Noosa and its surrounds have had the highest priced houses,” he said.
“Since September 2011, each half year has seen an improvement in the level of transactions for luxury homes – those sold for more than $600,000 – indicating a recovering market.
“However, before any significant price increases will be observed, sales volumes must recover to normal levels; something which Place Advisory predicts may still be two to three years down the track.”
With the luxury market re-emerging in the Sunshine Coast there is a shift in the kinds of buyers purchasing in this area, according to Mr Walker.
“There is a growing trend of interstate and international buyers purchasing holiday homes or investment properties,” said Mr Walker.
“Currently, 90 per cent of houses sold in the Sunshine Coast are being purchased by local residents, while a further nine per cent are being sold to interstate buyers and one per cent of homes are being purchased by international buyers.
“In 2013 the majority of these buyers came from New South Wales, closely followed by Victoria. These states also saw the highest number of purchases in 2012, suggesting that our southern (colder) neighbours consistently deliver the majority of interstate homebuyers to the Sunshine Coast.
“As the Sunshine Coast residential market enters its next phase, owner-occupiers are sure to return to the market, seeking the lifestyle they had to forego in previous years.”