PROPERTY WATCH REPORT - CENTRAL SUNSHINE COAST MARKET UPDATE 2016
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PROPERTY WATCH ®
REPORT
PROPERTY WATCH® REPORT
GOLD COAST Surfers Paradise
CENTRAL SUNSHINE COAST MARKET UPDATE
Fourth Quarter 2013
2016
OVERVIEW
SUNSHINE COAST POPULATION The Sunshine Coast is one of
350,000 Australia’s most popular holiday
destinations and is currently the
345,000
country’s 10th ranked urban
340,000 population centre.
Number of People
335,000
330,000 The region’s tourist and resident
325,000 drawing power is built on its lifestyle
offer: surf beaches and waterways ;
320,000
recreational pursuits; easily
315,000 accessible and nationally famous
310,000 green hinterland. This is all supported
305,000 a vibrant framework of commercial,
300,000 residential and industrial precincts
2011 2012 2013 2014 2015 together with the region’s proximity to
Brisbane and South East Queensland
Sunshine Coast Population and strong road, rail and air
Overview
• Sunshine Coast population experienced steady population growth
connectivity.
from 2011 to 2015, with average growth of 2.2%. Queensland
Now new investment has begun to
Treasury projections suggest population growth is estimated to
build the Sunshine Coast’s economy
increase from 2.2% up to 2.6% in the coming 5 years.
and property sectors. As of 2016
approximately $10.4bn worth of
• Dwelling approvals has decreased since 2011 to 2013 from 2557 to
infrastructure projects and urban
1766 and started to increase only from 2014, recorded at 2599.
developments are either underway or
planned phase and expected to
A period of weak construction activity from 2011 to 2013, coupled with
deliver a sustainable new job creation
increasing population growth during the same period of time, suggests a
and population growth.
potential under supply of property in present time. Lower Australian dollar
exchange rate has injected optimism to the market, attracting both “Strong underlying residential
domestic and international visitors to support the Sunshine Coast tourism demand built on an infrastructure led
industry. economy and new job creation
against a background of limited
In conjunction with future project developments in the area, its economic housing supply has delivered an
base has been widened from tourism to include commercial and health almost perfect scenario for residential
industries, improving its economic activities. Existing and future investors. Rising rents, historic low
commercial and health hubs serve to create employment opportunity, vacancies and the potential for strong
attracting population to the area. This will in turn create long term price growth”.
demand for properties, by both owner occupiers and investors.
Rick Williams
PRDnationwide Project Marketing
DWELLINGS APPROVALS “This is a residential market built on
3,500 real housing need and not
Dwellings Approvals
3,000 speculation. Based on the
2,500 employment intensive projects now
2,000 underway the Sunshine Coast is now
1,500 delivering a price competitive, yield
driven alternative to capital city
1,000
apartment investment. And buyers
500 have begun to discover this
0 opportunity”.
2011 2012 2013 2014 2015
Heading
Damian Brown
PRDnationwide Project Marketing
Number of Dwellings Approval
*Development value includes land and development value only and does reflect the completed project sales value
Source: APM Price Finder, Cordell, Rental Tenancies Authority, SQM Research, Queensland Treasury
MARKET CONDITION KEY FACTS
• In December 2015, Sunshine Coast and Gold Coast share a similar vacancy rate of 1.2% and 1.1% respectively; while
Brisbane LGA recorded vacancy rate of 5.3%. This suggests that Sunshine Coast and Gold Coast experience similar
occupancy trends. Strong rental demand and inherently tight rental property supply are the two main possible
contributing factors. This is in contrast with the Brisbane LGA, where increasing rental property supply might have
caused an increase in vacancy rates.
• In Q4 2015, Sunshine Coast recorded the lowest median 3 bedroom median house price ($463,500) and 2 bedroom
median unit price ($323,500); with the highest rental return* of 4.7% (3 bedroom houses) and 5.6% (2 bedroom units)
in comparison to Brisbane LGA (3.9% and 4.9% respectively) and Gold Coast City Council area (4.3% and 5.6%
respectively). Sunshine Coasts stands out among the Gold Coast and Brisbane LGA, offering lower entry cost to the
property market as well as higher rental return.
• Sunshine Coast property market has been on a path of recovery since 2011. Not only are the median house and unit
prices experiencing growth, recorded sales volumes are showing upward trends for the past 5 years. This indicates
increasingly strong demand for Sunshine Coast property, signifying actual capital growth.
Overview
VACANCY RATE TREND MEDIAN PRICE & RENTAL RETURN*
6.0% $600,000 6.00%
Rental Return
Vacancy Rate
5.0% $450,000 4.50%
Median Price
4.0%
$300,000 3.00%
3.0%
2.0% $150,000 1.50%
1.0%
$- 0.00%
0.0% Brisbane Sunshine Gold Coast
Dec 2013 Dec 2014 Dec 2015 LGA Coast City
Region Council
Brisbane CBD Sunshine Coast
3 Bedroom Median Price 2 Bedroom Unit Median Price
Gold Coast Main 3 Bedroom Rental Return 2 Bedroom Rental Return
MEDIAN PRICE GROWTH
10000 600,000
9000
8000 500,000
Number of Sales
7000
Median Price
400,000
6000
5000 300,000
4000
3000 200,000
2000 100,000
1000
0 0
2006 2007 2008 2009 2010 2011 2012 2013 Heading
2014 2015
House Sales Unit Sales Median House Price Median Unit Price
*Median price and rental return refer to Q4 2015 figures; Rental return is calculated as the annualised weekly rent divided by the median sales price
Source: APM Price Finder, Rental Tenancies Authority
HIGH-VALUE INDUSTRIES
ECONOMIC DEVELOPMENT
• Health and Well-being
In 2013, the Sunshine Coast council released its 20 year vision and
growth plan – ‘Sunshine Coast – The Natural Advantage: Regional • Education and Research
Economic Development Strategy 2013-2033’. This plan encompasses
the goals and aspirations for the area and the strategy that the council • Tourism, Sport and Leisure
has developed in order to achieve these goals. The strategy aims to
• Knowledge Industries and
further strengthen and expand the construction, retail and tourism Professional Services
industries, as well as adding a focus on seven high-value industries.
• Agribusiness
The region will seek further investment associated with these industries,
which have the potential to generate greater population growth and a • Clean Technologies
healthier, wealthier population on the back of the region’s major health,
education and technology focussed infrastructure developments. • Aviation and Aerospace
The goals for the new economy are to increase the local economy from
$14 billion in 2013, to a $33 billion local economy in 2033. The region
also seeks to provide over 100,000 employment opportunities in high-
value industries for its growing population by 2033.
The population of the Sunshine Coast LGA is expected to reach 475,000
people by 2031. This is an increase of approximately 128,000 persons,
who will require an additional 55,000 dwellings in the area.
INFRASTRUCTURE DEVELOPMENT
The Commonwealth, state and local governments have made over $2.5 billion in direct investments to major
infrastructure projects on the Sunshine Coast. It is expected that these projects will leverage over $5 billion in associated
investment.
Major developments include:
• Maroochydore City Centre • Expansion of the Sunshine Coast Airport ($347M)
• Sunshine Coast Public University Hospital ($1.8B) • Caloundra South Priority Development Area
• Expansion of the University of the Sunshine Coast ($81M) • Major upgrades to the Bruce Highway and other roads
PROJECT DELIVERY TIMELINE
Kawana Shoppingworld Sunshine Coast University Bruce Highway upgrades – Sunshine Coast University
expansion complete Pubic Hospital opens Caloundra Rd interchange Public Hospital Stage 2
completed opens
Oceanside Health Hub Maroochydore city centre major
commencement road network completed and Oceanside Health Hub and
first stages to market Town Centre Completed
USC Engineering Learning and
Teaching Hub completed
2013 2014 2015 2016 2017/18 2019 2020 2021
Sunshine Coast University Maroochydore City Centre Maroochydore city centre first Maroochydore City Centre first
Private Hospital completed early works commence buildings completed stage of entertainment precinct
completed
Sunshine Plaza $350 million Caloundra South first stages Birtinya Peninsula residential
expansion plan approved commence development completed Sunshine Coast Airport
expansion completed
Source: Australian Bureau of Statistics, Sunshine Coast Regional Council, Queensland Government Statisticians Office. Timeline adapted by PRDnationwide from Sunshine Coast Council
INFRASTRUCTURE HIGHLIGHT: KEY FACTS
MAROOCHYDORE CITY CENTRE • Approximately 165,000 m2 of
commercial space and 75,000 m2
The Maroochydore City Centre Priority Development Area is Australia’s of retail space will be available in
only greenfield city centre redevelopment. the Maroochydore City Centre once
the development is complete.
The city centre will include commercial, retail, residential and community
use precincts, and is expected to service a wider catchment of over 2 • Forecast to create more than
million people by 2030. 30,000 permanent jobs in the
region by 2040
One of the early precinct developments in the Maroochydore City Centre
will provide opportunities for the development of a new hotel,
entertainment, convention and exhibition centre. This site is expected to
have no height restrictions set by the development plan and will be the
landmark building in Maroochydore.
The 53 hectare development site is expected to provide a $5.9 billion
boost to the Queensland economy. The new city centre and the addition
of retail and commercial space alongside the Sunshine Plaza
redevelopment is likely attract interested locals who will be looking to
relocate closer to the new Sunshine Coast CBD.
INFRASTRUCTURE HIGHLIGHT: KEY FACTS
SUNSHINE COAST • Over 1,500 workers were required
on site in the second half of 2015,
UNIVERSITY HOSPITAL with more than 80% of these
construction workers living locally.
The Sunshine Coast University Hospital will open its doors in late 2016
as the centrepiece of Australia’s largest ever greenfield health care • Around 3,500 staff will work at the
precinct. Initially providing 450 beds the hospital is planned to expand to hospital in 2016. This is expected
738 beds by 2021 and with that create the Sunshine Coast’s largest to grow to about 6,000 staff by
single employment centre 2021.
The Oceanside Health Hub is an adjoining 17 hectare site, which will
provide up to 32,000m2 of medical space, as well as residential and
mixed use facilities, including a Best Western hotel and a childcare
centre. The site is currently construction, from developer Stockland.
The Kawana Health Campus, which incorporates the Sunshine Coast
Public University Hospital, the private hospital and the Oceanside Health
Hub are estimated to contribute over $3.2 billion to the Sunshine Coast
economy during development, and a further $447 million per year
thereafter from operations.
The creation of local hospital jobs is likely to result is an increased
demand for both
Over 1,500 rental
workers andrequired
were owner occupier
on site inhousing in the
the second Kawana
half area.
of 2015, with more than 80% of these construction workers
Short stay accommodation
living locally. demand is also likely see an increase as
future patients and visitors will require accommodation.
Around 3,500 staff will work at the hospital in 2016. This is expected to grow to about 6,000 staff by 2021.
Overview
Source: Australian Bureau of Statistics, Sunshine Coast Regional Council, Queensland Government Statisticians Office
INFRASTRUCTURE HIGHLIGHT: KEY FACTS
UNIVERSITY OF THE SUNSHINE • The education and research
industry is a major component of
COAST – SIPPY DOWNS the regional economy, contributing
nearly $700 million to Sunshine
The University of the Sunshine Coast, located in Sippy Downs is one of Coast’s Gross Regional Product in
the fastest growing universities in Australia. In 2015, 10,447 students 2014.
enrolled on campus, showing a growth of 8.2% over the past year.
• Youi Insurance will be developing
A total of $81 million has been invested in developing the university in their global headquarters in Sippy
recent years, with a new Learning and Teaching Hub, additional student Downs in order to house it’s staff of
accommodation and an Engineering Hub completed in 2014/2015. over 2,000.
The Sippy Downs Business and Technology Precinct consists of over
15.5 hectares of land, which allow for innovative research and
technology companies to set up and grow in close proximity to the
university and the neighbouring Innovation Centre.
With education and research being highlighted as a high-value industry
by the Sunshine Coast Council, the Sippy Downs area should see further
population growth in the immediate future due to university enrolments
KEY FACTS
and employment in the associated technology precinct. The additional
population is unlikely to be serviced by the existing housing supply, thus
Overview
additional residential and student accommodation will be required.
WHY INVEST ON THE SUNSHINE COAST
Economic Growth • Over $2.5 billion of infrastructure development is already
underway
• One of the largest economies in Queensland, with a Gross
Regional Product of $14 billion in 2014 – with a goal to
increase this to $33 billion by 2033
Population and Employment Growth • Forecasted to have increase population growth from 2.2% to
2.6% per year in the coming 5 years, higher than the
estimated Brisbane growth of 1.1%
• A goal for government to increase employment in high value
industries to over 100,000 persons by 2033
Business Confidence • Over 30,000 registered businesses on the Sunshine Coast
• 58% of businesses surveyed in September 2015 expected to
perform stronger over the next six months
Affordability • Median house prices for 3 bedroom, 2 bathroom homes on
the Sunshine Coast were recorded at $463,500 for 2015,
lower than those in Brisbane and the Gold Coast, recorded at
$560,250 and $543,500 respectively
• Commercial and industrial space rents lower competing
areas in South East Queensland, with recent figures showing
an average A grade office rent range of $300-$450/m2
Low Current Supply • Vacancy rates is recorded at 1.2% in 2015, significantly
lower than those of Brisbane, which sat at 5.3% in Q4 2015
• The number of dwelling approvals stagnated over the past
three years while the population kept increasing, thus leading
Overview to a current undersupply
Source: APM Pricefinder, Australian Bureau of Statistics, Sunshine Coast Regional Council, Queensland Government Statisticians Office, Residential Tenancies AuthorityABOUT PRDnationwide RESEARCH
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