Australia’s most expensive real estate market outside of a major city is cooling but experts say it’s not necessarily something to worry about.
The Sunshine Coast, stretching north to Noosa and south to Caloundra, has the highest median house price of any regional area in the country at about $1 million after prices rose about 50 per cent through the pandemic.
The prices even outstrip the Richmond Valley in northern New South Wales, which includes Byron Bay.
CoreLogic research director Tim Lawless, who compiles data from every house sale in the country, said markets across south east Queensland — including the Sunshine and Gold coasts — were cooling.
“It does look like the market is just starting to lose some steam, which is probably good news for anybody looking to buy,” he said.
He said prices had risen about $331,000 over the past two years.
“It’s been quite a spectacular market,” he said.
“We’re looking at median house values now that are above $1 million — houses and units combined is just under the $1 million mark.”
CoreLogic’s figures show that properties on the Sunshine Coast are staying on the market for twice as long as they were last year – haven risen from 13 days to 27.
But the slowdown has not stopped prices from rising, with a 6.4 per cent increase measured in the first months of 2022.
That’s a $68,000 increase if the house started the year at $600,000.
House prices on the Gold Coast are enjoying similar growth with 7.2 per cent after a similarly meteoric period through the pandemic.
Downturns for thee, but not for me?
While the slowing of house prices has been gentle in Queensland’s most sought-after regional areas, the trend is more obvious in southern capitals.
“It looks pretty clear in the market nationally, at least in the large cities is moving into a downturn,” Mr Lawless said.
But he said cashed-up buyers from down south could keep south east Queensland from treading the same path.
“Even though housing values have risen so much compared to markets like Sydney, for example, housing prices are still relatively affordable,” Mr Lawless said.
He said those factors added to the region’s appeal.
“It’s southerners moving up across the border and cashing out of say, the Sydney or the Melbourne market,” he said.
Mr Lawless said the Gold and Sunshine coasts were appealing due to their air links to Sydney and Melbourne.
He said the picture was slightly different for those further north, with Townsville and Cairns benefiting less from interstate house hunters and more from trends in tourism, agriculture and infrastructure spending.
Falling house prices ‘no big deal’ for many
The Reserve Bank raised interest rates last Tuesday for the first time since November 2010.
It was widely expected, partly because in April, the bank used its Financial Stability Review to warn that rising rates would significantly affect house prices.
It reported that if interest rates went up 2 per cent, or 200 basis points, in two years it “would lower real housing prices by around 15 per cent”.
That would be equivalent to a million-dollar home tumbling down to $850,000.
But Mr Lawless said even recent buyers would not suffer too much if a fall of that size came to pass on the Sunshine Coast and other major growth areas in Queensland.
“I’m not saying that’s going to happen on the Sunshine Coast, but if it did, that’s suddenly taking housing values back to where they were at about the middle of last year,” he said.
He said those who had bought in the past year or two would still be in a “very strong equity position” because they had already enjoyed such large increases in value.
Real Estate Institute of Queensland Sunshine Coast zone chairman Matt Diesel said rising rates were not a surprise and people were either prepared or rushing to lock in a good deal.
“I think when anybody’s looking at home loans they have to know the interest rates are going to go up,” Mr Diesel said.
“This is the lowest we’ve ever seen them.
He said there tended to be “a bit of a run on the market” when interest rates started to move as people tried to get in at the last minute to lock in low home loan rates.
“There’s no doubt it will be the top topic of discussion for quite some time,” Mr Diesel said.
Article source: www.abc.net.au