The Sunshine Coast as a region has experienced some of the most rapid shifts in property values over the past two years. The pandemic brought exponential growth, record prices and unprecedented migration to the region. But as we round out another financial year, the market continues to shift and adapt which leads us to ask what is on the cards for the future?
This month we saw the RBA decision leave interest rates at 4.1% which is the highest cash rate since 2012. In just over 12 months, we have seen 12 rate increases in an attempt to tighten property prices and reduce inflation rates. The impact the interest rate rises has had on the market has been more subdued than experts predicted, with only gentle softening on property prices over the first 6 months of 2023.
While rising interest rates essentially support a rebalance within the property market, there are other factors and elements that also drive prices. Consumer confidence is largely responsible for market sentiment and buyer activity while basic economics of supply and demand are also factors. Over winter it is common, especially on the Sunshine Coast to see a drop in the supply levels so if demand remains stable, pricing is only marginally impacted. We also anticipate continued migration to the Sunshine Coast, as international borders have reopened and southerners continue to embark on sea and tree changes. The population increase on the Sunshine Coast leads to higher rental prices which eventually trickles across to sale prices.
New building approvals are currently at a decade low, due to lack of supply of vacant developed land and due to the other impacts of the pandemic. During the past two years, we have seen material costs increase to unprecedented levels combined with a shortage of labour availability which has priced many buyers out of new home purchases. The challenges with building have therefore pushed demand back to established properties, again protecting the prices.
Property analysts have predicted that although we will experience a small softening in the market by around 2% towards the end of 2023, we can anticipate prices to bounce back quickly. The consumer confidence, continued migration, lower supply levels and cashed up interstate and international buyers are expected to actually drive prices upwards by around 10% across 2024 and ’25.
As a property owner on the Sunshine Coast, our investments are fairly well protected even in the current financial climate and for those considering buying, there is no time like the present. We are working with sellers that are getting their properties ready for market now, so if you are a buyer we suggest you register your details and we can keep you informed of new listings as they become available. If you are a seller and want to work with a team of experts that will maximise your sale and ensure that you are getting the most in the current climate, give us a call, we are happy to help. Servicing the Sunshine Coast, we can help you to start your next chapter!