Buyers Set to Surge as Borders Open on The 17th
By Leigh Martinuzzi
Regional areas continue to outperform capital cities as many inner-city folks favour new lifestyle opportunities. According to a report by CoreLogic, many regional areas have achieved double-digit growth for the year ending October 31st with 50% of those analyzed achieving growth rates of higher than 20% for the year. The Sunshine Coast was one of Australia’s best-performing regional centers with a recorded annual growth rate of 32.3%.
According to Tim Lawless (CoreLogic), there are several key factors that are influencing the shift from our cities to regional areas including the ability to work remotely, lower interest rates and access to credit, higher household savings, and relative affordability compared to capital cities. The top growth areas were those coastal towns that are still within a 2-hour commute from capital cities and offered a nice array of lifestyle choices.
This shift in demographics is creating a heightened level of demand in regional hubs that are causing a significant shortage of properties for sale. Naturally, this will mean quicker sales results with less need for sellers to negotiate on price. Consequently, we’ve seen a spike in sales by approximately 24% above the 5-year average in regional areas while stock levels are 35% below the five-year averages.
Affordability is nearing its peak with many people divided on what we can expect moving forward into 2022. Some are suggesting that as the borders open on the 17th of December, many interstate buyers will continue to push up prices which will result in further growth in 2022 by 5%, 10%, or even 20%. Others are more conservative and feel prices are near the top already with regional areas like the Sunshine Coast losing their affordability advantage. On top of this, there are early talks of possible interest rates rise and further credit controls. This will reduce the number of buyers competing on homes that are for sale and therefore reduce the seller advantage. It’s not a matter of if but more a matter of when.
Tim Lawless says the trend is already noticeable. For example, the median house price in Noosa now has reached $1.2 million which is comparable to many areas in and around our capital cities. Right now, there is a clear competitive advantage to those who are choosing to sell this side of Christmas as there is a limited amount of options available to those currently in the market to buy.
As the borders open on the 17th, we expect to see an influx of interstate buyers migrate to the Sunshine Coast in search of a property. It is likely we will continue to see a shortage of stock over the festive period before many people rush to get their house listed for sale towards the end of January and February. Selling over Christmas and the New Year is not ideal for many, however, those that don’t mind the idea of selling now will likely benefit from the increased surge in buyer activity once the borders open.