Interstate migration to Coast dwindles but prices stay competitive

Interstate migration to the Sunshine Coast appears to have slowed, but property prices are still competitive.

Droves of people moved from places like Sydney and Melbourne during the pandemic, fuelling a hot property market.

But fewer southerners are making their way to the region this year.

Interstate and international buyers have fallen from 29.9 per cent to 13.8 per cent during the first three months of 2023, according to the Ray White Coastal Living Network’s Quarterly Market Monitor.

The report said most buyers were from the immediate region, followed by Brisbane.

“Commonly, we find holiday homes and apartments are purchased by families who are within a two-hour commute to the Sunshine Coast,” it said.

Ray White Maroochydore director Dan Sowden said interstate migration levels had returned to normal.

“We have seen it come back to pre-COVID levels,” he told Sunshine Coast News.

“Interstate migration made up 55 to 70 per cent of transactions during the pandemic but now local buyers are dominating 55 to 60 per cent of all of the transactions.

“South-East Queensland buyers are also playing a strong role, with about 20-odd per cent, and interstate migration takes up the balance.”

Mr Sowden said southerners had less incentive to move north.

“The Sunshine Coast and coastal areas of Queensland are always popular for those down south, but they were coming here during the pandemic because there was a lack of restrictions here and it was more affordable to buy here,” he said.

No.19 Admiralty Drive at Alexandra Headland is on the market for $2.05m.

Their interest helped fuel the property market on the Sunshine Coast from 2020 to 2022, amid low housing supply and then low interest rates.

“The median sale price nudged over $1m, which was higher than some of the more affluent suburbs of Sydney and Melbourne,” Mr Sowden said.

“So, as prices continued to rise on the Coast and lockdowns ended (in the south), there was less reason for them to consider making the move in the numbers they were.”

But locals are still active in the local property market and Mr Sowden said they were from different backgrounds and buying for various reasons.

“There are first home buyers, and also young couples looking for bigger homes for a family. There are people looking for a second or third home and we also have a really strong down-sizer market, with people from larger homes buying into river and beachfront apartments,” Mr Sowden said.

Meanwhile, Reed and Co. Estate Agents Noosaville director and founder Adrian Reed also said locals were highly active buyers around the Noosa region.

“I think there’s a bit of misconception that we (agents) are hunting for Sydney or Melbourne buyers who are going to shoot the lights out at auction, but the reality is 50 to 60 per cent of our body of buyers are actually local,” he said.

“We have an active local buying group.

“Local buyers are often most confident about the market and have a greater level of market detail and knowledge.

“There is a lot of transitioning around the market, with locals moving between the beach, the hinterland, and the waterfront (river and canal).

“They rotate around, to get the best of what Noosa has to offer.”

The decreased interest from southern buyers was likely to have contributed to a fall in property prices during the second half of last year, amid rising interest rates.

Buyers have one eye on apartments near the beach, like 709/14 Aerodrome Road at Maroochydore, which sold for $1m.

But the market remains competitive and property prices have increased during the past couple of months.

The average time on the market has also more than doubled, from 31 days to 65 days.

Mr Sowden said there were two reasons for this.

“The first reason is that the negotiations between buyers and sellers are taking longer due to an emerging difference in price expectations and secondly; buyers are requiring longer finance terms than usual,” he said.

“What compounds this matter more so is that if the conditions are not being satisfied, then contracts are terminating and then a second or even third contract is required before the property is effectively sold.”

Ray White chief economist Nerida Conisbee expected property prices to continue to increase.

“Assuming that the rate of price growth continues as it has over the past three months, Australian median house prices will be back to where they were at the peak of 2022 (about April), in September 2023,” she said.

Ms Conisbee said aspiring landlords would be encouraged to get into the rental market because occupancy rates were about 99 per cent and homes were spending just 13 days on average on the market before being snapped up by renters.

“Rents across all Australian capital cities are now rising at their fastest pace ever recorded, driven by an imbalance in supply and demand,” she said.

“This imbalance is now flowing through to house prices.

“There’s a shortage of properties for sale, as well as a shortage of new homes being built.”

The market monitor said that trend was set to stay with a report released by the National Housing and Finance Investment Corporation estimating there will be a shortage of 100,000 homes in Australia during the next four years.

Article source: Queensland Property Investor