Today, I want to share some fascinating insights from Matusik’s review of sales prices and volumes during the first quarter of 2024, and how they parallel trends here on the vibrant Sunshine Coast.
First off, it’s no surprise that sales volumes dipped in the March quarter, given the typical seasonal slowdown in January and February, compounded by heightened interest rates. Interestingly, the number of detached dwellings selling for under $500,000 has dramatically decreased over the past few years, a clear reflection of soaring prices. Here on the Sunshine Coast, our hinterland suburbs have witnessed entry-level properties skyrocketing from around $300,000 to well over $600,000, making $600,000 to $800,000 the new “entry-level” range.
Matusik’s revelation about the March quarter’s median price across our combined capitals being down 11% to $842,000 is intriguing. While one might assume this is due to more lower-priced homes selling, the data suggests otherwise. Similarly, median house prices in most Sunshine Coast hinterland suburbs have trended lower, fueled by surging demand for entry-level homes compared to those in the $1 million-plus range.
CoreLogic notes a broader trend, with almost every capital city witnessing stronger growth conditions in the lower value range of the market. While sales in the mid and top-tier price ranges continue, competition has softened compared to the lower tiers.
Switching gears, despite the overall market slowdown, house prices are still on the rise. In April alone, prices saw a 0.6% increase, marking 14 out of the past 15 months of continuous growth. Yardney Property Update reports a national price surge of 10.5% by the end of April 2024. Perth leads the charge with a remarkable 22.8% increase, followed by Brisbane (18.8%), Adelaide (15.5%), and Sydney (10.7%).
The driving force behind these price hikes? A shortage in available supply coupled with increasing population numbers. However, consumer confidence remains shaky, with ANZ Roy Morgan’s consumer confidence index lingering below the 85-point mark for the 62nd consecutive week.
Despite these challenges, housing loan commitments rose by 3.1% in March, signaling buyers’ eagerness to seize opportunities amid stable interest rates. Matusik forecasts a moderate growth in prices of 2-4% by next year, while I anticipate around 7% growth on the Sunshine Coast.
As for recent media speculation about further rate hikes, the situation remains uncertain. While inflation ticked up slightly in the March quarter, numerous factors may lead to a decrease over the next 12 months. With household spending under strain and unemployment rates expected to rise, the future of our economy appears complex and uncertain.
It’s a nuanced market landscape out there, with mixed signals and valid concerns about the economy’s trajectory. However, the real estate sector remains resilient, adapting to changing dynamics and continuing to offer opportunities for buyers and sellers alike.
