Property Prices On The Sunshine Coast in 2023 – What To Expect
Queensland’s Sunshine Coast has long been a desired location for people from other parts of the country looking for a sea change, or to escape the hustle and bustle of major cities like Melbourne and Sydney. It’s also an extremely popular holiday destination, which has led to the region finding favour with savvy property investors.
Whether you’re a real estate investor or someone looking to purchase a property to live in on the Sunshine Coast, what are the property prices looking like in 2023 and beyond?
Both property investors and homeowners alike ideally want the value of the properties they purchase to rise, so if they decide to sell, they will make a tidy profit. Let’s look at the current situation regarding property prices on the Sunshine Coast and what the outlook for the future is.
Property Values Declining In the Second Half Of 2022
According to a report published by the Sunshine Coast News in September of 2022, median property prices in the region are on the decline after peaking around the middle of the year, following a 2 year boom period.
The property expert group CoreLogic state that median property prices in the Sunshine Coast area and beyond fell by 4.5% since the market reached its peak, with a drop of 2.2% from July to August alone. This is the second biggest drop in property prices in Queensland behind North Brisbane.
With units and apartments in the region, there was an even greater price drop of 5.5% during the same period following the market peak.
COVID caused a temporary trough in Sunshine Coast housing prices during mid-2020, after which followed a house price boom which saw prices soar by some 52.5%! This led to a median gain of a massive $337,000. Of course, these prices always seemed over-inflated and most were waiting for that bubble to burst. It seems that now it has.
CoreLogic is also anticipating housing prices to continue to decline for the near future, particularly following a series of interest rate hikes this year by the RBA, with more likely to come. The downward trend is now gathering momentum too. It’s predicted that when interest rates stabilise, so too will the housing prices on the Sunshine Coast and around the country. After that happens, there is the potential for property prices to start gradually creeping back up again at a more normal rate.
Another point to note is that more average houses have seen bigger price drops in recent months than the more expensive houses, although the market has certainly levelled off for prestigious homes as well.
Are Lower Prices Really Bad News For New Investors and Homeowners?
For those who are looking to buy into the market either now or in the near future, the answer to that question really depends on what property prices on the Sunshine Coast will do over the next few years. It also depends on the buyer’s intentions and expectations.
For homeowners who wish to buy a Sunshine Coast property with the view to living in it for the long term, fluctuations in the property market over the next couple of years will likely have very little impact. Instead, they get to purchase a property at a reduced price, which will eventually increase again at some point in the future.
For investors, lower prices can also be a positive, if they wish to play the long game before selling for a profit or being able to command premium rent. Although it’s generally advisable to purchase an investment property that is likely to experience immediate growth, purchasing while the market is down can lead to a higher profit margin sometime in the future.
If you’re planning to make a purchase during this downward phase, it might pay to hold off at least until early next year. Wait for the market to stabilise and then look to purchase a property in a location that’s most likely to see a period of growth and an increase in prices moving forward.
What’s the Situation For Those Who Bought Before the Boom?
Homeowners and investors who purchased property before the price hikes of the past two years are still sitting in an enviable position. While prices are currently on the decline, the drop to date is just 4.5% as compared to a 52.5% median house price increase over the past two years. So, while there is a current drop in value and projections for further decline, it’s highly unlikely that Sunshine Coast property prices will drop to the level they were before the boom period kicked in.
If homeowners were to sell up now or during the next several months, they stand to make a handsome profit and, chances are, the equity in their homes even if they don’t sell will remain higher due to the boom.
The News Is Not So Good For People Who Bought Homes During the Price Boom
Many people from the southern states fled to Southeast Queensland and the Sunshine Coast in particular during the dark days of the pandemic. They purchased homes, lured by the appeal of a more relaxed, coastal lifestyle. However, those homes were purchased at unrealistic and unsustainable prices. While eventually they may recoup their investment or even see a positive return on investment, the way the market is looking at the moment, that could be a day quite a long way off.
Buyers Are Currently Hesitant
Right now, buyers are cooling their heels, somewhat hesitant to make property purchases on the Sunshine Coast until they are more wise to what the market is going to do. A stabilisation of interest rates will likely see buyers start to open their cheque books and more enthusiastically commence buying property again.
The Takeaway
Currently, the market has peaked on the Sunshine Coast and property prices are steadily falling after being artificially inflated for the past 2 years. However, now can still be a good time to buy for property investors and home owners alike.
