The Sunshine Coast's remarkable laidback lifestyle continues to draw property buyers, despite the repercussions of COVID-19, says RiskWise Property Research CEO Doron Peleg.
RiskWise CEO Doron Peleg said this regional area enjoyed very strong market fundamentals, with suburbs such as Noosa, Peregian and Coolum beaches offering warm weather, excellent beach access, popular shopping options and easy accessibility to the tranquil surroundings.
Mr Peleg said COVID-19 had helped strengthen 'work from home' opportunities meaning owner-occupiers could take advantage of 'lifestyle' prospects instead of being tied to employment hubs.
"Those who work in a stable corporate environment, but do so remotely, are now taking advantage of great buying opportunities in NSW, southeast Queensland and Victoria," he said.
"Before COVID-19 hit, there was already a strong trend of sea- and tree-change homebuyers looking for the best of all worlds – lifestyle, accessibility to employment hubs and affordable housing.
"So homebuyers with long-term holding strategies are well positioned to negotiate aggressively to purchase high-quality houses that usually enjoy very strong demand.
"While there was definitely uncertainty during the first wave of the pandemic, the second wave shows us quite clearly these new work practices are here to stay most likely until end of 2020 and well into 2021, with long-term changes to work practices highly likely" he said.
He said the area's relative affordability had been a major drawcard behind past migration by southerners, especially for large numbers of interstate purchasers who could not afford to buy such great lifestyle properties in places like Sydney and Melbourne, and this was likely to resume once the borders were opened.
"We expect the growing ageing population will also help continue this growth trajectory as they are drawn there by its year-round idyllic climate, beautiful sandy beaches and lush hinterland subtropical forests.
"The region is only 100km from Brisbane, meaning they can enjoy the quiet life while still being only an hour's drive from the hustle and bustle of a big city and all it has to offer.
"The demand for regional areas, such as the Sunshine Coast, offering great lifestyle choices is likely to further increase among those with stable incomes and they can expect good capital growth over the next few years."
He said with low building approvals (at only 4.8 per cent for houses and 3.2 per cent for units) came good demand and alongside that, solid capital growth.
There are currently only 5,376 house building approvals in the pipeline across the entire regional area of the Sunshine Coast (i.e. SA4), and due to high demand, these are likely to be easily absorbed into the market.
There are also 1,615 new units to be added over the next 24 months which is unlikely to have any significant impact on the market. However, units are considered less popular property type particularly among families and in some areas, such as Noosa Heads, that are experiencing a larger number of units in the pipeline, carry a higher level of risk.
Mr Peleg said the region had 'a good proportion' of residents who made their living elsewhere, were professionals who worked from home or were retired.
"They make up a significant amount of the population, so while a healthy job market is important, in this case, and particularly for above-average properties, there shouldn't be too much emphasis placed on the fact this region does not have a huge job market," he said.
The median house price on the Sunshine Coast is $691,017 with capital growth over the past five years of 27.9 per cent. Its limited supply of available land for housing developments is increasing demand for existing properties meaning house prices will likely continue to increase.
"Ultra-low interest rates, government incentives and land scarcity will see dwelling prices rise once the COVID-19 issue is resolved, most likely in 2021," he said.
"What this all means is now is the time to buy if you are a first home buyer or an owner-occupier as this current slowdown in the property market is only temporary, with houses in popular areas likely to experience solid capital growth in the medium to long term.
"House price growth is likely to remain strong due to the growing demand for existing affordable dwelling options and the desire to live in established coastal areas with an unrivalled lifestyle and good infrastructure."
However, he stressed that investors buying rental apartments unsuitable for families were taking an enormous gamble, with both equity and cash flow risk expected to materially increase. Serviceability is also a major factor for investors who rely on a stable rental income to cover the costs associated with property and particularly the mortgage.
The Sunshine Coast offers a variety of housing styles and price ranges from the multimillion-dollar mansions to two-bedroom cottages depending on budget.