Sunshine Coast Market Update: Affordability & Listing Growth Amid Price Slowdown
Weekly Real Estate Market Update with Leigh Martinuzzi MPG
Australia’s property market reached a new milestone this week, with total property values hitting $11 trillion—a $900 billion increase over the past 12 months. However, while this sounds impressive, the rate of growth is noticeably slowing, with dwelling prices only rising by 1% for the September quarter of 2024. That’s down from 9.7% annual growth earlier in the year, now sitting at 6.7%.
One of the key drivers behind this slower growth is affordability. Record high asking prices across the country, especially in capital cities, are outpacing wage increases. Without matching salary growth, the market is becoming more inaccessible for many buyers. According to the Australian Bureau of Statistics, wages increased by just 4.1% to the end of June 2024. While certain industries like the public sector, construction, professional and technical services saw larger wage increases, most people I talk to are not feeling a boost in their pay packets. This disconnect is perhaps one reason why price growth has slowed. On that note however, buyers still seem willing to meet current market values, especially here on the Sunshine Coast, where demand remains strong. And sellers can still achieve great outcomes, with record results still be reported yet price growth will reach a point unacceptable by many.
Looking at market trends across Australia, it’s clear that growth is uneven. While cities like Melbourne and Hobart saw quarterly price declines of 5.1% and 12.5%, Perth and Brisbane are performing much better, with annual growth rates of 24.1% and 14.5%, respectively. This variance underscores how much supply and demand dynamics shape property prices. CoreLogic recently reported a 2.1% increase in new listing volumes as of early October 2024, marking the strongest start to the spring selling season since 2021. Auction activity is also up, with 2,600 homes going under the hammer this week and 3,000 scheduled for the next. That said, auction clearance rates have softened, sitting at 59.5%. When rates dip below 70%, it suggests buyers are becoming more selective, confident that new opportunities will soon emerge.
Interestingly, we’re seeing a slight surge in new listings, particularly from sellers who don’t want to miss out on the high prices we’re currently experiencing. This mirrors trends seen in places like Melbourne, where sellers are now having to adjust their expectations from the highs of 6-12 months ago. Locally, on the Sunshine Coast, we’re still facing a property shortage, especially in the lower quartile. Affordable areas like Nambour and regions just outside of Noosa and Maroochydore are seeing high demand, with prices in Nambour rising over 11% in the past year. As stock levels in these areas increase, sellers may need to be more strategic with their pricing to stand out, as setting the wrong price could lead to a slow campaign and missed opportunities.
Looking ahead, two factors could shake up the market. First, the RBA might lower the cash rate by 0.25% in December to help encourage holiday spending which could reignite buyer activity. A rate cut would also lower borrowing costs, potentially pushing prices up at a faster rate than we’re currently seeing. Second, we have the ongoing issue of a housing shortage. New building approvals dropped by 5.7% in August, and apartment approvals are now 60% below their peak. Half of the cost of building new homes is tied up in government fees and taxes, which, combined with a growing population—driven 83% by overseas migration—means we could see more pressure on established homes and an increase in buyer demand. So while price growth is softening, there are two huge indicators that may continue to push prices higher over the next 12 to 18 months.
CBRE research even suggests that, due to the massive slowdown in apartment approvals and completions, prices in our capital cities could grow by 23% by 2026. All of this makes for a very dynamic and mixed market, one that’s certainly worth keeping an eye on as we head into the end of the year.
Feel free to reach out if you need any advice or insights on the market as you consider your next property move.
