Upwards pressure on prices in Sunshine Coast trophy home market

Upwards pressure on prices in Sunshine Coast trophy home market
Upwards pressure on prices in Sunshine Coast trophy home market

When looking at prestige properties on the Sunshine Coast the one thing you can say is that it has ‘all been happening’, according to the valuation firm, Herron Todd White.

Buyer demand is strong with the stock levels being low in turn leading to upward pressure being placed on prices, its May report noted.

When defiining the Sunshine Coast prestige market, the $1 million mark has always been considered the starting point.

Just like lower-priced entry-level properties, the entry levels of the prestige market, between $1 million to $1.5 million have been the most popular.

"As this sector of the market took off we have seen a fuse being lit.

"Activity has picked up right through the value bands all the way to the three record-breaking transactions that occurred in the space of four months," HTW advised.

The most popular areas in the prestige market have continued to be coastal locations.

When looking at the coast you can break it up by the old shire council regions being Caloundra to the south, Maroochy to the central area and Noosa to the north.

"There is no doubt that beachside and canal front areas have all been performing really well.

"Suffice to say they aren’t making any more of these property types which should hold owners in good stead.

When looking at the prestige rural residential/ lifestyle market, things are a bit different," HTW advised.

This market is little hard to gauge as it is very property specific with personal preferences presentation and motivation of both purchases vendor is having an impact on the ultimate sale price.

Therefore wider market parameters should be expected than those experienced for more traditional residential properties.

An interesting observation in this lifestyle market is that proportionally, values for smaller acreage prestige properties have performed better than the larger acreage counterparts.

It appears that the cost to run these larger acreage properties have had a bearing on the market that does sometimes struggle to get its ‘head around’ what’s involved.

For units, HTW have seen a flight to larger permanent occupancy style product.

The main market operating in this area is the ‘empty nester’s that are looking to downsize and have a property where they can ‘lock and leave’ and go travelling etc.

Within the resort/holiday space, we have also started to see the Hasting Street beachfront units come back but still a bit off from the last market peak.

The improvement in the prestige/higher end properties has historically been driven by a high percentage of interstate investors from Sydney and Melbourne.

"This is especially the case in the Noosa region.

"The relative affordability, when you compare Sydney and Melbourne prices to those of the Sunshine Coast, demonstrate pretty good value.

"It also appears that Sunshine Coast is pretty high on a number of the list of the baby boomers that have started to retire."

There have been three record sale prices that have transacted in the space of four months.

First off 29 Wyuna Drive, Noosaville sold in October 2017 for $10.3 million (Listed for $11.9 million) which was on the market for 351 days.

Next was 46 Seaview Terrace Sunshine Beach, which sold for $15.2 million (Listed for $18 million) in January 2018 and was on the market for approximately 581 days.

Finally 21 Webb Road, Sunshine Beach sold in February 2018 for $18 million (Listed for $22 million) after being on the market for only 52 days.

It is HTW's understanding that the purchases of some of the properties were highly successful business people that had effectively sold large businesses.

The ‘ultra- prestige’ sector is more a matter of timing rather than anything else and tends to be more active during periods of stronger M&A activity.

"The question that we always get when we looking at the prestige markets is that - is the current growth that we are experiencing sustainable?

"There is no doubt that the prestige market is heavily linked to the wider economy which has been performing well.

"HTW do however have a history of volatility (up to 40% in some cases) in this market given that these properties are ‘wants’ rather than ‘needs.’ I mean, is there anything more discretionary than a multimillion-dollar holiday home?"

The report concluded the big positive at the moment is that the Sunshine Coast appears to be ‘on a lot of people’s lips’ and while the economy keeps performing well and barring any unforeseen incidents, the prestige market should keep chugging along for a little while yet.

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Sunshine Coast Htw

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