News

Sunshine State property is benefiting from internal migration for lifestyle


Sunshine State property is benefiting from internal migration for lifestyle

PR Newswire

Sydney, Feb. 17, 2021 /Medianet/ --

The Sunshine State continues to shine - strong demand for detached houses and outstanding demand for lifestyle areas Is projected to deliver 6-10 per cent capital growth over the next 12 months for the south-east QLD market, according to the latest quarterly Risk & Opportunities Report of Riskwise Property Research.

  

The QLD housing market, and particularly houses in the popular areas of Brisbane, the Sunshine Coast, and the Gold Coast, enjoy strong demand, with the coastal areas enjoying strong demand due to the increased ability to work from home and internal migration, according to Riskwise.

  

Pete Wargent, co-founder of property buying services company BuyersBuyers.com.au confirmed that buyer sentiment has turned around very rapidly. “We’re seeing plenty of buyers who put their searches on hold in 2020 suddenly rushing back to buy. Stock levels are very low and auction markets in particularly are very competitive.” 


Doron Peleg, CEO of Riskwise Property Research said that the recovery was broadly in with what had been projected by the research house late last year.  


“Historically there has been a strong correlation between movements in interest rates, investor activity, and property price growth, and as we forecast last year, the correlation will reassert itself this year leading to strong price growth for houses in Brisbane, the Sunshine Coast, and Gold Coast, especially for family-suitable properties” Mr Peleg said.

  

Mr Wargent of BuyersBuyers.com.au said that prospective buyers in 2021 need to be well organised, well-researched, and act decisively.

 

“We’ve seen lots of buyers in Brisbane, Gold Coast, and Sunshine Coast who have recently relocated to south-east Queensland. Many appear to be choosing to work remotely or fear further lockdowns in the southern capitals” Mr Wargent said. 


But the change this year has been that investors are coming back into the market, so there’s competition for quality property coming from all angles, and rental markets are tightening to the extent that it’s become cheaper to be a buyer from a renter, at least from a cashflow perspective” added Mr Wargent.  


“In some popular areas, such as parts of Noosa, there is effectively no vacant rental stock and the market is exceptionally tight. Vacancy rates are also tightening at Gold Coast and are falling in Brisbane. There’s no question that internal migration has been a big factor in this” Mr Wargent said.  

 

Riskwise Risks & Opportunities report summary 


Houses 

Strong consumer sentiment, ultra-low interest rate and internal migration, combined with relative affordability of houses in comparison to the prices in Sydney and Melbourne, boosted demand for houses in the Sunshine State.  


During recent months, houses in the broader south-east QLD area enjoyed very strong demand with high quality properties sold at a premium very quickly.  


In addition, it is highly likely that investor activity, and particularly their demand for free standing houses will increase significantly in south-east QLD. 


As previously projected, areas attracting these lifestyle buyers include the Gold Coast and the Sunshine Coast. Beachside suburbs especially are outperforming the market. The demand for free-standing houses in coastal areas is very sustainable and is likely to continue, at a lower growth rate, over the medium and long term.  


Overall, houses in south-east QLD are projected to deliver 6-10 per cent capital growth over the next 12 months.  


However, it should also be noted that there are a variety of markets within QLD, with the mining towns experiencing lower demand and presenting a higher risk due to a large proportion of investors with negative equity and insufficient growth drivers, particularly over the medium and long term.  


Units 

Rental properties in high supply areas remain high risk. In QLD houses are substantially preferred properties over units. Investors who buy rental apartments in high supply areas are still taking a high risk with both equity and cashflow risk materially increasing.  


As previously reported, in recent years, overall, units across QLD carry a higher level of risk than houses, particularly due to high supply of apartments that are unsuitable for families and owner-occupiers.  


As mentioned in our previous reports, some areas with oversupply have been labelled 'danger zones' and have low sales volumes. Furthermore, some of these areas present a major financing barrier with a high deposit required. COVID-19 has further increased the risk particularly in inner Brisbane. Moreover, off-the-plan units in high supply areas carry an extreme level of risk.  


There have been large increases in rental listings and large drops in rent in some areas, such as in inner-city Brisbane, increasing the serviceability risk, particularly for highly leveraged inventors relying on rental income and taxation planning to service their mortgage payments. Mortgage arrears in high-supply areas should be closely monitored.  


It should be noted, however, that family-suitable properties in beachside suburbs carry a lower level of risk and often enjoy good demand from downsizers and, consequently, are subject to only modest price reductions. 

 

ENDS 

 

For all media enquiries, contact BuyersBuyers.com.au Media Manager Phil Bathols on 0419 565 193 or email phil@buyersbuyers.com.au 


Back to News
© 2021 Honed Real Estate Pty Ltd. All Rights Reserved.
Built by Honed Digital.
Feedback