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February 15, 2024 by ash

In 2024, building costs, interest rates, migration, and more will affect Coast real estate

A rapid rise in median prices in the region in 2023 led to some shocks, according to Ray White data.

The value of houses increased from $993,070 to $1,085,742, while the value of units increased from $719,817 to $775,197.

Many people were surprised by the rise, according to Ray White chief economist Nerida Conisbee.

“Prices didn’t slow down on the Sunshine Coast,” she said.

“It was surprising because many people predicted that prices would plummet in many beachside locations, especially in the Sunshine Coast.”

A drop in prices during the second half of 2022 prompted that opinion, but the market rebounded in 2023.

“The downturn didn’t last very long,” Ms Conisbee said.

Parrearra, Bokarina and Buddina experienced the largest price increases as buyers jostled to be near the sea, while Mooloolah Valley and Rosemount experienced gains in the hinterland.

Despite rising interest rates, property values in the region have increased for several reasons, according to Ms Conisbee.

As a result of limited housing supply and an influx of people, supply and demand played a major role.

She said there was definitely population pressure.

Despite rising construction costs, many people have been forced into established homes in South-East Queensland.

The situation is probably worse in the south-east, where construction costs have risen more than 35 percent over the past two years.”

A rise in property prices is expected in 2024, according to her.

The growth rate is likely to remain the same,” she said, “it’s quite possible we’ll see a similar trend.”.

This will be a factor if interest rates are cut earlier than expected.

There has been a sticking point in the market: the cost of financing.

“However, if interest rates begin to fall, that will fuel the market.”

Until buyers prefer buying new homes and bear the brunt of building costs, established homes will continue to attract top dollar.

She said, “At some point, the pricing will balance out.”.

In order to keep up with construction costs, which will not decrease, price growth must continue to increase.”

Eventually, more homes will be built as a result.

According to Ms Conisbee, “it is harder to build on the Sunshine Coast” largely because of planning regulations and construction costs, but she expects federal and state governments to encourage more new housing.

Furthermore, she predicted that people would continue to move to the region, which would push prices up.

“South-East Queensland’s population shift appears to be continuing,” she said.

As a result, we are seeing more people settle there than we did in previous cycles, not only from within the state, but also from abroad.

“It’s now seen as a place to live permanently, as opposed to just a place to visit.”

According to her, it is a “buyer’s market”.

A lot of sellers have been sitting on their hands because there is nothing for them to buy. I think one of the things that hopefully happens in 2024 is the number of properties for sale starts to rise.

Slower price rises expected

According to Cameron Kusher, director of economic research at PropTrack, the Sunshine Coast saw “superior price growth” in 2023.

Due to rising interest rates and inflation, he expected local home prices to continue rising in 2024.

He explained that “the slowdown in growth is the result of the delayed impact of interest rate hikes, as well as the weakening labour market.”

It is still expected that prices will rise, but at a slower rate.

There are two factors that will influence home price growth on the Sunshine Coast: migration to the region and subsequent demand for housing, along with the amount of stock on the market.

On the Sunshine Coast, there has been a shortage of stock for sale, which has supported prices.”

The housing supply is a major concern

Tim Lawless, CoreLogic’s head of research, said a limited supply of housing also contributed to rising prices.

Sunshine Coast markets have been characterized by low supply, he said.

During November, CoreLogic tracked 2944 homes on the market, 14.5% lower than the same time last year and 37.5% lower than the 10-year average.

There has been strong selling conditions and upward pressure on prices due to such tight advertised supply levels.

Sunshine Coast housing values have grown faster than most other regional markets, and he expects prices to continue to rise.

“However, the pace of growth won’t be as strong as the pandemic phase, which reached 38.7% annual growth through 2021,” Mr Lawless said.

“Worsening affordability constraints will likely slow the rise in housing values.

In spite of this, interstate migration and low supply are expected to keep housing prices mildly upward.

A key factor in 2024 will be the number of listings, migration, and interest rates.

Vendor activity will be an important trend to watch, he said.

Through November, advertised supply was trending lower as buyer demand outweighed the flow of new listings, but if this trend begins to reverse, buyers may benefit from more choice and less urgency.

The Sunshine Coast has been one of the most popular areas for internal migrants, supporting housing demand.

In addition, interest rates should be watched closely. There is a growing expectation that interest rates will begin to fall by the end of 2024. While any rate cuts are likely to be gradual, lower interest rates are likely to stimulate buyer activity.”

It is expected that housing values will keep slowly climbing to record highs in the future, according to Mr Lawless.

According to him, the housing market is highly cyclical due to factors such as debt costs, credit availability, supply versus demand, and sentiment.

Over the next six months, housing values are likely to reach new record highs on the Sunshine Coast if the growth trend continues.

As housing affordability worsens, prospective buyers will face increasingly high barriers to entry.

According to CoreLogic data, hinterland towns like Glass House Mountains, Diddilibah-Rosemount, and Nambour had experienced the strongest growth in the past year.

There will be more homes built

In December, the state government released a framework for almost 900,000 new homes by 2046.

In South-East Queensland, the plan aims to provide more affordable and well-located homes as the region prepares for an additional 2.2 million people.

In the nation’s fastest-growing region, the release follows months of consultation with communities, local governments, and industry.

There are 5000 hectares to be added to the urban footprint for residential and employment purposes, including at Yandina on the Sunshine Coast.

A real housing supply would be enabled by the plan, according to Premier Miles.

“Queensland is experiencing its golden decade of growth, so we need more homes than ever before,” he said.

As part of the national housing supply challenge, ShapeSEQ will ensure we deliver more homes while preserving the great lifestyle our region has to offer.

“It’s a blueprint for building nearly 900,000 more homes.

We want to make sure the homes are what South-East Queenslanders want, strategically located to meet their needs, reduce costs, and increase affordability.”

As state elections approach next year, Antonia Mercorella, CEO of the Queensland Real Estate Institute, said accommodation would be a hot topic.

Housing is a complex challenge and a highly prevalent issue facing our state, and will undoubtedly weigh heavily on voters’ minds,” she said.