Sunshine Coast Real Estate Update: Pricing Challenges
Real Estate Market Update with Leigh Martinuzzi MPG
With inflation easing and the RBA’s decision to hold the cash rate, it appears the Australian housing market is off to a promising start. However, this varies across markets, and here on the Sunshine Coast, it presents a mixed picture. One key indicator of market improvement is the Auction Clearance rates in Sydney and Melbourne, given they host the majority of Australia’s auctions. Last week’s clearance numbers were robust, signalling a resurgence in buyer sentiment and activity. Preliminary auction clearance rates stood strong at 76.2%, marking the highest figure since June last year and a significant uptick from the mid-60% range seen previously.
Perth leads in terms of growth figures, closely followed by Brisbane, Sydney, and Adelaide. While each market comes with its unique challenges, it’s evident that the strongest performers are those offering relative affordability, such as Perth, along with various regional areas like Hervey Bay through to Cairns. Another contributing factor to growth is the dynamics of supply and demand. Although supply has shown slight upticks in 2024, it remains down by 20% compared to long-term trends. In Melbourne, strong demand driven by immigration numbers might suggest booming prices, but the presence of ample supply, both in established homes and new developments, tempers this growth.
On the Sunshine Coast, I’ve observed an increase in new homes for sale, anticipating a bustling Autumn season before potentially tapering off into the winter months. However, this doesn’t necessarily translate to increased transaction numbers. Caution among buyers regarding costs may keep overall sales figures down, albeit potentially better than last year, but unlikely to reach the heights of 2021 and 2022. The main challenge in this market lies in the aftermath of the boom, where there’s a tendency to expect continued rapid price rises despite the improbability. In 2021, national prices surged by nearly 25%, a highly unusual phenomenon accounting for a third of the property price growth observed over the last decade—in just one year.
The consensus among experts points towards more moderate growth rates of around 5% annually for both this year and the next, representing a national average projection. However, determining realistic price expectations remains a challenge for both agents and property owners. Several factors contribute to this difficulty. Firstly, limited sales data makes it challenging to find suitable comparable sales. Secondly, there is often a significant divergence in sales prices from one home to the next, even when externally the properties may appear to represent similar value. This discrepancy arises due to variations in perceived value among buyers, further complicating matters. Property value is inherently subjective, and buyers perceive it differently, posing an additional challenge in the current market. These challenges have contributed to the prevalence of ‘no price’ advertisements as sellers navigate the complexities of pricing their properties accurately.
As things settle—expected to happen this year—prices may stabilise somewhat. However, with southern sellers continuing to flock to the Sunshine Coast, strong property sale results are still anticipated to persist. That wraps up this week’s insights.
