Market Update

After our rollercoaster year last year, 2021 looks to be set up for a continued strong property market. Market fundamentals suggest this will continue due to good levels of demand and low levels of competing stock. This has in turn placed upward pressure on values and in some cases these increases have been significant over a relatively short period of time. It is almost like there is a fear of missing out driving the market. 

As always, the first quarter is typically a good indicator of how the year will unfold. The underlying influences that have been driving the market are still in play. 

◗ Record low interest rates look to be here to stay for the foreseeable future. 

◗ With the ability to work remotely, people are looking to live where they want to live rather than where they work. 

◗ People are making the decision to move sooner rather than later.

A lead indicator is that the rental market continues to be incredibly tight with little to no vacancies, especially in sought after areas. We shouldn’t be surprised too much by the value increases which are a natural function to encourage vendors to sell. The question will be whether they are sustainable. 

On the Sunshine Coast and the northern region of Gympie, it is fair to say that most areas will continue to do well as most areas are experiencing similar market fundamentals. It is just that there will be some areas and asset classes that will outperform others and typically that comes down to the amount of product in an area and whether it can be replicated. 

Coastal areas typically do well given they are not making any more coastline, whereas when you look at some of the inland areas where there are more properties and also the ability to create more, there will still be good sales volumes but the value growth will be more modest. 

There are a number of unit complexes under construction with some due for completion this year. From what we have seen, the majority of interest is in owner-occupier style units with complexes that directly target this market going well. We feel that this owner-occupier market will continue to remain strong given the growing downsizer and empty nester market and that they can potentially exit out of their existing homes at a good price. 


“The prestige markets across the coast had been operating at a number of different speeds. The main region that grabs the most attention is the northern Sunshine Coast area around Noosa Heads but over recent months, areas on the central and southern Sunshine Coast have shown that strength has also returned to those markets. Sure, they are not at the same levels, but have certainly performed better than where they were.”


Clearly there remains issues surrounding COVID-19, as evidenced by recent lockdowns. Will the vaccination program prove effective enough? When will it be distributed? When will overseas travel resume? What will happen when the final stage of JobKeeper finishes at the end of March? There is just so much uncertainty out there, but I guess when you look back, there is always uncertainty, just the level varies.

Thanks for reading our update. If you would like a current sales or rental appraisal please contact our team.

Source:

Herron Todd and White Maroochydore