Why invest in The Sunshine Coast

Sunshine Coast | Queensland

Investment Property Sunshine Coast

 


 

Required Fundamentals for an upswing in Property Values include :

Increased Job  Depth and new Employment Opportunity;  Population Growth; Delivery of new Infrastructure

… and Sunshine Coast has all 3 !

 


Why invest in The Sunshine Coast

Research indicates that Sunshine Coast is at the bottom of the property cycle, and new investment and infrastructure under construction and new job creation will ensure future capital growth with close to 165,000 people employed on the Sunshine Coast. 32,000 new jobs are expected to be created in the Kawana area having a direct impact on further population growth to fill these positions.

Did you know that 14,000 new jobs have been created over the past 12 months in Sunshine Coast!

Sunshine Coast has 2 distinct markets : Those that want to enjoy Sunshine Coast life style living (beach, sun, sea)  and those that need residential property who work in the area and need somewhere to live

There is a drastic shortfall to cater for the need market especially in dwellings ranging from $300k to low $500’s – being apartments, villas, units being developed by reputable developers and builders

Rentals in Sunshine Coast are on the up, there is a strong need for NRAS dwellings to cater to the need of the demographic working in the area

Vacancy Rate in Sunshine Coast is very low compounded by a low supply of new dwellings with a need for 3,200 new dwellings year on year

Infrastructure Investment

This need for dwellings under $550,000 is being driven by large new infrastructure programmes and projects totalling over $7 Billion Dollars in landmark catalysts that will change the face and capital value in the Sunshine Coast

  • Kawana Town Centre
  • Sunshine Coast University Hospital
  • Maroochydore Principal Activity Centre
  • Sunshine Coast Airport

 

Job Creation

The Sunshine Coast unemployment figures are now lower than the Queensland average!

Thousands of jobs are being created as these projects are underway today. With over 40,000 new jobs being created in the area, you can understand the pressure on supply of affordable dwellings to meet the growing need. At least 22,000 of these jobs will be full time and permanant opportunities once construction has completed.

Existing roads and other infrastructure is of a high standard and designed to cope with current and future population growth in the area. Everything in the areas is close by making locations such as Maroochydore highly sought after. The massive new hospital precinct is also within easy reach for the many many employees who will be working there all requiring a place to live

135,000 people work in the Sunshine Coast, with many of these jobs being in key industries and are eligable for NRAS Rental Assistance

 

Population Growth

The Sunshine Coast has around 330,000 residents and growing by around 7,000 new people year on year = creating a need for 3,200 new dwellings per year!

Around 30% of the population Rent their accommodation with the majority of apartments having 1 or 2 people residing there. Creating an unusually high demand for such like accommodation to meet this growing need

 

Choosing an Investment

A big plus for investment opportunity in Sunhine Coast is the undersupply of new dwellings & a tight rental market.

The supply of Rental Accomodation in Sunshine Coast is very tight setting Rental Yields at around 5% and a low vacancy rate.

Based on the above demographics, there is a dire shortage of apartments and villas in the Sunshine Coast.

There is also a shortage of quality House and Land properties to meet the growth of families moving up to Sunshine Coast to embrace new employment opportunities, lifestyle and affordable dwellings.

Having a relatively young emerging demographic profile, young people and young families look to Rent property whilst settling into a new environment. Supply is bordering on not keeping up with increased demand.

Added to this is the fact that the original Sunshine Coast ageing population are now wanting to downsize placing further demand on an already low supply of new dwellings to suit downsizers!

 

In the most recent Herron Todd White Report for March 2013; Sunshine Coast sits well in the property clock to achieve a strong return on your investment. See the write up below and the attached Valuation by HTW on Kingfisher …

Every little bit helps. In the new world where the costs of living has risen, we have seen people not only tighten their collective belts, but also really take their time when making decisions. So in this climate of downward trending interest rates, home owners have been given a bit of a breather. That is certainly so for the existing home owners. What about potential new home owners and investors?

We have witnessed increased activity and the effect of the lower interest rates in the sub $500,000 housing market. With the rental market being quite strong, the gap between the rental payments compared to the home loan repayment is not as great as it used to be. For example a $400,000 home would rent broadly speaking for $420 per week to $450 per week. For the same property, if you had a deposit and the loan was around $350,000 with a rate of 5.45%, your repayments are approx $500/pw. A difference of $50 per week to $70! This calculation is also working the same way for investors. They are seeing these good returns (and the opportunity to buy in at or near the bottom of the market), so have started to become more active in the market.

Another sector that has also benefited is the sub $300,000 unit and townhouse market. Its not uncommon to see townhouses selling for $220,000 attracting a rental of $280 per week – over 6.5% gross return. There is resistance in the market to units with high body corporate fees as they impact on returns – holiday let units in managed complexes are therefore harder to sell.

The impact of lowering interest rates on the prestige market is minimal with ‘other factors’ such as business and consumer confidence playing a much bigger part.

A strong local and national economy tends to drive the prestige market.

….we have witnessed increased activity and the effect of the lower interest rates in the sub $500,000 housing market….

When you think about it, this is the same for all the market sectors. The current increase in activity hasn’t just happened after a few interest rate drops. If we don’t have confidence in our jobs with solid incomes, then it doesn’t matter what level interest rates are at!

The markets need to be driven from the ground up, not the top down. We are seeing this by the optimism and confidence that is being created by the new Sunshine Coast Hospital and health precinct. This major infrastructure project has started the ball rolling and for the first time will put our region ahead of the game. Not only from the jobs created but also the people that will move to the area because of high quality health services.

This injection into an economy that has been struggling has to be good.

 

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