Sunshine Coast Property Market

Current Climate & Outlook

Presented By:

Helen Swanson

Presented by Helen Swanson

QLD Research Director LMW January 2016

Agenda

1. Market Drivers

Major infrastructure Projects

Economic indicators

2. Detached Housing

3. Prestige Market

4. Unit / Apartment Market

5. Outlook

Market Drivers

A strong residential sector

requires all the ducks to “line up”

ROI

Affordability

Sentiment

Employment

Population / Migration

Driver Trend

Major Infrastructure Projects

Sunshine Coast University Hospital Sunshine Coast Light Rail Project

Airport Expansion Project Maroochydore City Centre

Major Infrastructure Projects

Aura Estate Sippy Downs Estate / Palm View

Sunshine Plaza Expansion Caloundra City Revitalisation Project

Migration & Employment

Population Movement

24,854

24,335

25,301

28,067

29,579

33,143

35,558

36,519

36,598

35,804

35,433

35,527

36,180

35,448

30,035

37,984

35,498

30,371

26,607

23,381

19,409

14,702

6,172

6,795

11,796

8,196

6,724

6,897

26,488

27,122

25,399

29,555

32,952

46,145

53,907

59,319

35,820

34,629

44,688

39,431

36,700

33,849

0 20,000 40,000 60,000 80,000 100,000 120,000

Jun-02

Jun-03

Jun-04

Jun-05

Jun-06

Jun-07

Jun-08

Jun-09

Jun-10

Jun-11

Jun-12

Jun-13

Jun-14

Jun-15

Persons

Natural Increase Net Interstate Migration Net Overseas Migration

Source: ABS & LMW Research, Sep-15

Queensland population movement

Population Movement

0

2,000

4,000

6,000

8,000

10,000

12,000

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

Se

p-9

7

Mar-

98

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p-9

8

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9

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No

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Pri

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Quarter ending

Queensland interstate migration and Sydney vs Brisbane apartment price differential

Sydney vs Brisbane Price Differential Queensland Net Interstate Migration

Source: ABS, REIQ , REINSW & LandMark White Research

Economic Indicators - Unemployment

3.00%

3.50%

4.00%

4.50%

5.00%

5.50%

6.00%

6.50%

7.00%

7.50%

8.00%

Unemployment Rate (%)Dec-10 to Sep-15

SC GC QLD

Source: Dept of Employment. Small Area Labour Markets

Residential Vacancy Rates (%)

1.3%

1.7%

3.3%

0

1

2

3

4

5

6

SC SD GC SD Inner BrisbaneSource REIQ

Economic Indicators – Population Growth

Current population more than 280,000

Just over 450,000 residents on the Sunshine Coast by 2036

Annual growth 2.3% 2011-2031Compared to 1.9% for QLD

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

500,000

2011 2016 2021 2026 2031 2036

Sunshine Coast Regional Council Population Forecasts

Source: PIFU, 2015

Economic Indicators – Tourism

Source: Tourism Queensland, YE June 2015

Sunshine Coast Tourism Statistics – YE June 2015

Economic Indicators – Building Approvals

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

20

01

-02

20

02

-03

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-04

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-05

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-06

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-07

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-14

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-15

FY

TD

(5

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s)

Val

ue

of

app

rov

als

($)

Mill

ion

s

Sunshine Coast Value of Building Approvals ($)

Residential Non-residential

Source: ABS & LandMark White Research

Detached Housing

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

0

1,000

2,000

3,000

4,000

5,000

6,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

No

. o

f sa

les

Sunshine Coast House Sales by Region

Sunshine Coast Central Sales Sunshine Coast North Sales Sunshine Coast South Sales

Sunshine Coast Central Median Price Sunshine Coast North Median Price Sunshine Coast South Median Price

Source: Pricefinder

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sunshine Coast Detached House Sales by Price Point

Under $300k $300k-$400k $400k-$500k $500k-$600k

Source: Pricefinder

72%

28%

Sunshine Coast Regional Council Detached Houses

Buyer Profile 2015

Owner Occupier Investor

34%

18%12%

4%6%

20%

Sunshine Coast Regional Council Detached Housing Investor Profile

Local Regional NSW TAS VIC Brisbane

0

100

200

300

400

500

600

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sunshine Coast Detached Prestige House Sales by Price Point

$1m-$1.2m >$1.2m

Source: Pricefinder

27 Neerim Drive, Mooloolaba.

Sale Price: $4,000,000 (four million dollars)

Sale Date: 9/10/2015

Features: This is a two level contemporary style residential house that was built circa 2007. It has 5 bedroom(s), 7 bathroom(s) and a 7 car basement carpark and presents well. Features include: high quality fit out including ducted air conditioning, ducted vacuum, home theatre. Site improvements include: tiled swimming pool and 14m pontoon. The land has river frontage of roughly 29m achieving a north easterly aspect. Landscaping is of a very high standard and includes meditation ponds.

The buyer was a local buyer

2 Cooroora Street, Dicky Beach.

Sale Price: $4,250,000 (four million two hundred and fifty thousand dollars)

Sale Date: 12/11/2015

Features: Arguably one of the best beachfront sites on the Sunshine Coast and one of the more recognised residences in the Caloundra locality, this Spanish Mission styled property occupies a 607 sqm site with very immediate beach and ocean views as well as a extensive panorama taking in views of Dicky Beach Reef immediately to the north and Moffat Headland to the south east. This immediacy of views, a very open north eastern aspect given Cooroora Street extends along the northern boundary opening up this most desired aspect as well as the protection provided by nearby headlands and reefs providing relatively safe swimming makes this one of the most prized trophy allotments in this locality if not the whole of the Sunshine Coast.

Whilst the dwelling appears to have been updated at multiple times during its life, its layout and styling are now dated and it is not considered to fully capitalise on the quality of the site. However, it does provide a good size envelope from which an extensive remodelling and renovation could be undertaken. Of particular benefit, it appears the home has been constructed above current height restrictions. This current height could be maintained if a renovation was undertaken.

The buyer was a non-local buyer

5 Allambi Rise, Noosa Heads.

Sale Price: $5,750,000 (five million seven hundred and fifty thousand dollars)

Sale Date: 31/10/2015

This is a two level 'Noel Robinson' designed residential house with weatherboard walls and a colorbond roof that was built circa 2003. It is of very good condition/presentation and has 4 bedroom(s), 2 bathroom(s) and a double garage. Features include: high quality fitout including ducted air conditioning and limestone tiles. Site improvements include: wet edge swimming pool. The site area is 885 sqm. The land is a sloping site with a reasonable building contour. Landscaping is of a high standard. Located in the sought after Little Cove locality and walking distance to Hastings Street.

The buyer was from Victoria

2/23 Hastings Street, Noosa Heads.

Sale Price: $7,200,000 (seven million two hundred thousand dollars)

Sale Date: 31/10/2015

This is a ground floor single level apartment in the '23 Hastings' building with rendered masonry walls that was built circa 2001. It is of very good condition/presentation and has 3 bedroom(s), 2 bathroom(s) and a single garage. Site improvements include: swimming pool. The unit is within a group of similar type units. Landscaping is of a high standard. Living area: 176 sqm. Balcony area: 8 sqm with courtyard of 24 sqm. Sale reflects a value of $34,615/sqm of living and outdoor area. Property achieves good ocean and beach views via a northerly aspect. Direct beach access from the rear or courtyard of the property. Arguably a premium sale.

Local buyer

4/35 Hastings Street, Noosa Heads.

Sale Price: $7,200,000 (seven million two hundred thousand dollars)

Sale Date: 29/05/2015

Unit 4 'Annabelles' offers the top floor or penthouse position in a three level complex known as 'Annabelles' which provides quite spectacular and panoramic views over Noosa Main Beach, to the east across to First Point, to the west up Noosa Main Beach towards the mouth of the Noosa River and a direct northern outlook over Laguna Bay to the coloured sands. This is a highly sought after view well recognised internationally and considered a trophy position. Living and balcony area: 206 sqm. Sale reflects a value of $34,952/sqm of living and outdoor area. This was considered to be quite a premium price

The buyer was a non-local buyer from New South Wales

10 Arakoon Crescent, Sunshine Beach.

Sale Price: $3,800,000 (three million eight hundred thousand dollars)

Sale Date: 1/10/2015

This sale is a 607 square metre vacant block of land located in a desirable area of Sunshine Beach with an easterly aspect with ocean, white water and beach views.

Local buyer

24 Arakoon Crescent, Sunshine Beach.

Sale Price: $5,250,000 (five million two hundred and fifty thousand dollars)

Sale Date: 24/07/2015

This sale is a 636 square metre vacant block of land located in a desirable area of Sunshine Beach with a north-easterly aspect taking in good ocean and beach views as well as a direct outlook to Lions Head.

The buyer was local to Sunshine Beach

• Improvement to prestige residential market throughout 2015

• Mortgagee sales are now minimal and bargain opportunities have become scarce.

• Record low interest and improved economic conditions stimulating demand.

• Brisbane and interstate investors dominate purchases especially in central and southern pars of the Sunshine Coast

• Melbourne investors more active in Noosa precinct and are now less focussed on returns and more on location

• Growth in intergenerational wealth another major driver of upgrading residential activity with both real estate wealth and general personal wealth contributing to the market

• Buyer fundamentals are returning with a strong emphasis firstly on location and secondly on improvements.

• Caution always taken as market heavily influenced by economic conditions both local and overseas

Prestige Market

Sunshine Coast Detached House Median Price GrowthTop Performers

Suburb Median Price YoY Change 5 Year Change

Sunshine Coast $495,000 4.2% 4.2%

Yaroomba $590,000 22.3% 7.3%

Peregian Beach $710,000 20.7% 14.5%

Pomona $380,000 15.2% na

Mooloolaba $660,000 10.9% 8.6%

Noosaville $770,000 10.8% 6.6%

Source: REIQ Market Monitor, September 2015

*10 or more sales in latest quarter

Apartments

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

No

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les

Sunshine Coast Unit Sales by Region

Sunshine Coast Central Sales Sunshine Coast North Sales Sunshine Coast South Sales

Sunshine Coast Central Median Price Sunshine Coast North Median Price Sunshine Coast South Median Price

Source: Pricefinder

Source: Pricefinder

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sunshine Coast Unit Sales by Price Point

Under $300k $300k-$400k $400k-$500k $500k-$600k $600k-$700k $700k-$800k $800k-$900k

Source: Pricefinder

0

50

100

150

200

250

300

350

400

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Sunshine CoastPrestige Unit Sales by Price Point

$900k-$1m $1m-$1.2m >$1.2m

Source: Pricefinder

24%

19%

10%5%

35%

8%

Sunshine Coast Regional Council Investor Buyer Profile Apartments

2015

Local NSW VIC Overseas Brisbane Regional

Top Performing Suburbs – Units

Gross Rental Yields

Source: REIQ & LMW

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

Sunshine Coast Median Rents

Source: REIQ Market Monitor, September 2015

$0

$50

$100

$150

$200

$250

$300

$350

$400

$450

Me

dia

n R

en

t ($

/we

ek)

Two bedroom units Three bedroom houses

Summary & Outlook

Residential Land & Subdivisions

• Project builders very active at beginning of 2015 but less so towards end of 2015 with changes to APRA laws.

• As sales volumes have increased since 2012 a corresponding reduction in inducements (ie. rebates) has resulted, with very few, if any estates today offering such incentives.

• The number of ‘off the plan’ sales are increasing, as too are the stage sizes

• The improving market is still taking the form of an increase in activity and more stability in general, as opposed to any significant uplift in values (in relation to completed stock).

• This uplift is however beginning to occur, as list prices are exceeded for established dwellings and developers start to “push” prices for proposed new product.

• The prices being paid for development sites are also increasing, placing pressure on development margins and developers are prepared to accept lower returns in the face of a more certain market.

• The Sunshine Coast hinterland is an emerging area as the availability closer to the coast diminishes.

Residential Detached Housing Summary

• Significantly increased sales volumes with noticeable value growth in the sub $1 million price bracket

• Agents reporting of short sale periods and significant lack of stock to sell

• First home buyer numbers low with investors more prevalent (SMSF) as rental and capital value increases expected in a low interest rate environment

• Prestige market holding up quite well in the north coast particularly Noosa.

Residential Units Summary

• Majority of stock selling sub $600,000

• Prestige market dominated by Brisbane and interstate purchasers more so than overseas buyers.

• Volume of sales slightly down second half of 2015 as new APRA rules were introduced.

• Agents reporting of short sale periods and greater number of interested parties during inspections

• Concerns of an over heated construction driven apartment market in inner Brisbane may see investors lean towards coastal opportunities.

• Hot spots are generally central areas close to new infrastructure, beach, e.g. Caloundra, Kings Beach, Kawana, Maroochydore and suburbs near hospital and major infrastructure

Investm

en

t p

rop

ert

y What time in 2016

Contact details

Independent Valuation,

Research & Property Advice

LMW

ABN 50 102 320 329

ACN 102 320 329

48-50 Sugar Road

Maroochydore QLD 4558

AUSTRALIA

Telephone 07 5414 1401

www.lmw.com.au

National Offices

Sydney 02 8823 6300

Melbourne 03 9614 6611

Brisbane 07 3226 0001

Parramatta 02 9354 0800

Wollongong 02 4228 0276

Gold Coast 07 5634 7101

Sunshine Coast 07 5414 1401

LMW Research can provide tailored

property research across all property

markets.

Visit our website at www.lmw.com.au for

information. Or email:

helen.swanson@lmw.com.au

Disclaimer

No part of this research report or any reference to it may be included in any other document or reproduced or

published in any way without written approval of the form and context in which it is to appear.

No liability is accepted for any loss or damage (including consequential or economic loss) suffered as a

consequence of fluctuations in the property market subsequent to the date of survey. The opinion noted herein is

relevant as at the date of survey only and no warranty can be given as to the currency of the opinion at any point

following the date of the survey.

This research report is current at the date of 19th of February 2016 only. The opinions noted herein may change

significantly and unexpectedly over a relatively short period including as a result of general market movements or

factors specific to the survey area and property classes. The opinions expressed in this research report are that

of the researcher and is authorised by LandMark White Limited.

Liability limited by a scheme approved under Professional Standards Legislation.