One of the more interesting consequences of the pandemic was the significant increase in demand for housing outside of Australia’s big cities.
Commonwealth bank data revealed earlier this year that migration from capital cities to regional areas from 2020-2022 was 15% more than the previous two years, before the pandemic.
Queensland’s Sunshine Coast, named the most loved destination on earth by the Tourism Sentiment Index, has been one of the biggest beneficiaries of this trend.
Dr Diaswati Mardiasmo, chief economist at PRD said the Sunshine Coast had seen a recent surge in popularity and can expect continual growth in 2023.
“The Sunshine Coast has been attracting a lot of attention in the last 24 months, due to the high interstate migration into Queensland,” Dr Mardiasmo said.
“Many were attracted to the Sunshine Coast as it was the more affordable market compared to Brisbane and the Gold Coast.”
Dr Mardiasmo highlighted that the undersupply of new houses on the coast – combined with the high demand for property in the area and heavy upcoming project investment – should see prices continue to increase.
Based on PRD data Dr Mardiasmo provided to Savings.com.au, as well as input from local agents and experts, we have put together a list of ten suburbs to watch on the coast next year.
Median house prices, annual growth, rental yield, vacancy rates and the value of future projects were all provided by PRD.
If you’re looking for growth potential, Nambour could be a great opportunity for big returns on your investment.
Sean Carter, an agent with Amber Werchon, called Nambour “the Sunshine Coast suburb to invest in if you’re looking to make a capital gain.”
PRD’s data puts house prices significantly lower than the other suburbs we have listed, with a median price of $690,000 on the back of a 21.1% annual growth.
Unit prices saw a similarly significant increase, up 24.3% to a median price of $460,000
Rental yields as of September 2022 were at 4.2% for houses and 5.2% for units while just 0.3% of properties were vacant.
There is also a huge amount of development planned in Nambour.
PRD real estate estimates the value of the construction projects scheduled to begin in the second half of 2022 at $567.7 million.
This includes the Nambour Centre Activation Project, which will aim to revitalise the centre area as a community and cultural hub, refurbishing and upgrading much of the existing council infrastructure.
The Sunshine Coast Council says this project is intended as a catalyst to induce further private sector investment in Nambour, which would be more great news for homeowners.
For those looking for a home as well as an investment, Mr Carter highlighted Nambour’s proximity to the most popular spots on the coast.
“[Nambour is] very close to the coast and central, giving you great access to travel north to visit Noosa, or head south to Caloundra.”
“It’s the best of both worlds and great value for your money for owner occupiers and investors.”
Chairman of the REIQ (Real Estate Institute of Queensland) for the Sunshine Coast, Matt Diesel, told Savings.com.au Buderim was his top pick to see big returns in 2023.
“Buderim is very undervalued when compared to the growth the rest of the Sunshine Coast has seen,” Mr Diesel said.
“A lot of the prices in surrounding suburbs have grown exponentially in the past couple of years while Buderim has remained a slow, steady and stable performer.”
However, he highlighted location and vacancy rates to demonstrate his belief that this ‘sleeping giant’ would soon start to see appropriate growth.
“It’s smack bang in the middle of everything the Sunshine Coast has on offer and makes for easy access up and down the coast, and there’s little to no vacant land available.
“[Buderim] has always been the jewel in the crown for the Sunshine Coast.
“It’s the perfect blend of tree meets sea and offers an elevated position to capture breezes and great views, making it the true sleeping giant for property here on the Coast.”
PRD’s data highlighted recent rapid growth of Buderim unit prices, which have risen 25.4% to $608,000 in the past year.
For those looking for a spot near the ocean, but put off by high prices in Maroochydore or Caloundra, Birtinya is becoming an attractive alternative.
A couple of streets inland from the beach, Birtinya is built around Lake Kawana, and is one of the few spots near the coast where average prices remain below the Sunshine Coast median.
Growth in Birtinya has been steady, with a 17.6% increase in house prices over the past year.
Dr Mardiasmo says there are several indicators that prices in Birtinya will continue to rise.
“[The] new hospital expansion will lead to more jobs, which leads to increased demand for housing,” she said.
“Additionally, a new research institute will require researchers in the area, and more new people to move in.
“Birtinya is also a relatively new suburb, with modern houses, leading to lower maintenance costs and less knock down rebuilds required.”
A suburb many will know for the mountain of the same name, Beerwah is further inland than most of the suburbs discussed here, and further south than most of the popular tourist spots on the coast.
However, Heron Todd White’s Sunshine Coast director Stuart Greensil says these hinterland spots are where those searching for value, particularly on houses, should be looking.
Mr Greensil said that for the median Sunshine Coast house price, it would not be unusual to find a 600 metre squared property with four bedrooms, two bathrooms, and a pool.
Mr Greensil also told Savings.com.au places like Beerwah and Landsborough are increasingly becoming more developed communities.
“In these little country towns, you’re seeing little breweries pop up, you’re seeing gin joints pop up, so now you’re getting a real maturity to the area,” Mr Greensil said.
House prices in Beerwah are currently at a median of $790,000, with an annual growth of 17.9%.
Located just above Beerwah, Landsborough is another emerging hinterland spot.
The inland town where you’ll find Steve Irwin’s Australia zoo, Landsborough saw dramatic growth in 2022.
Median house prices went up 22.8% to $810,250, while unit prices saw a 33.1% increase to $452,500.
Units in Landsborough also have an average rental yield of 6.4% pa.
With vacancy rates sitting at just 0.5%, the likelihood is this considerable growth will continue into 2023.
A popular measure used to rank suburbs for their investment potential is the Demand Supply Ratio (DSR).
This is a score out of 100 given to a suburb that measures how much demand there is relative to supply: a DSR of 50 would indicate that demand and supply were balanced.
A high DSR demonstrates to investors that demand in a suburb outweighs supply, so prices are likely to significantly increase.
The national average DSR ratio is 55.
Jeremy Sheppard of Empower Wealth, the founder of DSR data, told Savings.com.au three suburbs on the Sunshine Coast recorded DSR scores of 65+.
One of these was Palmwoods, in the hinterland a few kilometres south of Nambour.
As discussed, upcoming development could make proximity to Nambour much more relevant to property value in the coming years.
Palmwoods has seen steady annual growth: 16.3% for house prices and 21.6% for unit prices.
Another one of the high achievers when it comes to DSR, Rosemount is expected to continue to perform next year.
Mr Sheppard highlighted the ripple effect potential (REP) of Rosemount as a major contributing factor to increased demand for the suburb.
REP is a metric that estimates how much prices in a suburb would need to increase to match that of surrounding suburbs.
It is based on the assumption that generally, substantial growth does not occur in isolation, and high value suburbs will eventually bring up the value of the surrounding area.
Rosemount’s Australia-high REP score suggests property prices in the suburb could go up an additional 21.27%, purely based on the value of surrounding suburbs.
Mr Diesel also picked Rosemount as a suburb to watch.
“Rosemount will be an up and coming acreage lifestyle location to watch given that it is located between Nambour and the new city centre of Maroochydore,” he said.
“It has extremely easy access to the new improved Sunshine Coast airport and the best of our beaches making it a great option for buyers wanting more space while still having easy access to all amenities.”
Yandina is another suburb Dr Mardiasmo expects will see an increase in demand due to local industry.
“A new quarry extracting over 500,000 tonnes per annum of material will attract workers to Yandina, with housing required to host people who may be moving intercity or interstate,” she said.
“This will lead to an increased level of demand, leading to an increase in median sales price.
“Yandina is a rural town on the junction of two large arterial roads, the M1 (leading to Sydney and Brisbane) as well as state route 11 running alongside the Maroochy river leading to Maroochydoore.
“This creates a large demand for housing as industrial and transport style jobs are highly demanded.”
The median house price in Yandina is currently $847,500.
In the 2023 McGrath Report, John McGrath of Shark Tank fame highlighted Caloundra as one of his top picks for Brisbane and its surrounding regions.
“Planned infrastructure is making [Caloundra] a popular choice for property investors,” Mr McGrath said.
“There are a number of upcoming projects aimed at reshaping Caloundra, including a new $110 million apartment development and a boutique hotel and apartment complex”.
PRD identified units in Caloundra West as a particular area poised for growth.
The median unit price was $608,000, with an annual growth of 25.4%.
Little Mountain is a larger suburb in the Caloundra region that has seen steady growth over the past year.
House prices went up 16.1% from 2021, with a median house price now sitting at $900,000.
Unit prices went up 8.3% to $539,000.
Dr Mardiasmo identified Little Mountain as ideal for first home buyers.
“Little mountain is a highly demanded suburb due to its close proximity to Caloundra, Dicky and Kings Beach, but far enough away that it is not noise polluted or overpopulated by view-blocking skyscrapers.
“Additionally, proximity to lakes, schools, parks and other amenities is highly attractive for first home buyers, as well as investors and owner occupiers.”
Article source: www.savings.com.au
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