Sunshine Coast Housing Values End the Year 33.7% Higher
The Australian property market in 2021 boomed, which many of us considered nothing but extraordinary. Of course, many homeowners and investors celebrate the price increases we’ve seen across the country however, for many others the changing house prices present many challenges. Nationally house prices have increased by an average of 22.1% over the last 12 months which according to CoreLogic is the highest annual appreciation since 1989. The value of Australia’s residential real estate has risen from $7.2 trillion in November 2020 to now over $9.4 trillion just 12 months on.
In the December quarter of 2021, NSW and Victorian markets stabilised reporting price increases for the quarter of 2.67% and 1.54% respectively. There is still a great deal of buyer activity which has been one of the key reasons for the surge in property prices across the country. Homeowners in Sydney and Melbourne rushed to sell their properties in the lead-up to Christmas. This flooded the markets with new listings giving buyers more choice and taking the heat out of the market. New records were also set with over 4000 homes per week being taken to auction. Since the peak month of March where property prices rose 2.8%, the NSW and Victorian markets have now shifted and will continue to slow over 2020.
Bucking the trend, Queensland and Adelaide continue to outperform the other states with interstate migration playing an integral role. Sydney and Melbourne have reportedly lost as many as 30,000 to 40,000 residents to regional areas and interstate. Meanwhile, Queensland is set to record the largest increase in net migration with some figures suggesting that up to 40,000 people have migrated here in 2021, and potential similar numbers migrating here in 2022. The greater Brisbane markets experienced house price increases of 2.9% for the month of December, 8.5% for the December quarter, and 27.4% in 2021.
The Sunshine Coast is one of the hottest markets in Australia admired by many as a lifestyle destination. This has meant significant growth over a short period. As more southerners make their way here, we can only expect further growth in 2022. On average, Sunshine Coast property prices have risen by 33.7%, with some areas and homes achieving price increases of 50% and above. With the Olympics now scheduled for 2032, it is predicted that by mid-2024 median prices on the Sunshine Coast will rise to $986,000. Currently, the median dwelling price on the Coast is sitting at $862,500 compared to Queensland’s median property values of $757,194.
The outlook for 2022 is looking positive with many of the big banks predicting a further 7% to 8% increase in national property price for 2022. The Sunshine Coast housing affordability is less challenging particularly for those coming interstate and out of the capital cities however advertised stock levels remain particularly low. Nationally, advertised homes for sale ended the year 24.7% below the five-year average, while inventory levels in regional areas were reported 35.9% below the five-year average. CoreLogic estimates that the number of homes sold in 2021 was 40% above the 10-year average with an estimated 653,000 house and unit settlements over the year.
“Such a significant mismatch between available housing supply and the level of demand is a fundamental reason why housing prices have risen so sharply over the year. As stock levels normalise and affordability constraints along with tighter credit conditions drag down demand, it’s reasonable to expect growth conditions will be more subdued in 2022,” Mr Lawless (CEO CoreLogic).
Property sellers held the upper hand for 2021 which meant reduced selling time, 23 days on average nationally, final auction clearance rates sitting in the high 70% and 80% range, and minimal negotiations on advertised sale prices. There has been a shift in the market for the likes of Sydney and Melbourne yet no real signs of a slowing market on the Sunshine Coast or a balancing of supply and demand. The challenges ahead which we expect will continue to put an easing pressure on national property markets are, the potential of an early interest rate increase; further uncertainty and restrictions caused by the COVID pandemic; worsening housing affordability; and tightening credit policies being introduced.
In the short-term, we can only expect property prices to stay firm and even rise a little further however how the property markets will perform later in the year remains uncertain. I expect we will see a confident market throughout much of 2022 without the intensity and heat we experienced in 2021. This may mean stabilising property prices, longer times to sell, and more choice and negotiation opportunities for buyers. As always, whatever your real estate needs we would love to support you now or in the future. MPG… with you all the way!