Monday, 8 December, 2014
Expansion poised to bolster employment and property development
The Sunshine Coast market is one of the fastest growing in Queensland. And Queensland is outstripping all other states, including Western Australia.
Speaking at the UDIA (Qld) Sunshine Coast meeting at Alexandra Headland Surf Club, Turner and Townsend construction economist Gary Emmett said Queensland’s property development sector was on the up but development trends and drivers varied considerably from region to region.
The meeting featured the release of the UDIA’s Quarterly Development and Construction Industry Performance Report: Quarter 3, 2014, that shows owner-occupiers are jumping back into the market, with an increase in owner-occupier loans of 15% in the year to August 2014.
Mr Emmett said there were some important things for the Sunshine Coast to consider about its development. Firstly, looking at demographics, the average median age in the region was five years higher than the rest of Queensland, he said. Compared to the rest of the state, there is a population bulge in the 5 to 20 year-old and in the 40 to 65-year-old age groups. In other words, people are moving away from the Sunshine Coast when they are in their 20’s and returning in their 40’s to stay long term.
The next thing to consider is housing demand and building approvals. The Sunshine Coast’s population of 278,000 is growing about 2% per year (about 5560 persons). That means about 2224 more homes are needed each year (based on an average family size of about 2.5). The published housing approvals for the 2013-14 financial year of about 1600 houses and 800 apartments (excluding Noosa) in the statistical office report could indicate that demand will be met.
But typically only 90% of approvals will proceed to construction. Furthermore, many of the apartment approvals will be earmarked for tourism and investor developments and are usually bought by people living elsewhere.
Despite approvals having increased significantly in 2014, after several years of much lower approvals, there is a high probability that an overhang in demand is not being met. The next thing to look at would be the economic outlook, jobs and growth potential, both locally and nationally.
Housing approvals are up 65.7% and apartment approvals up 56.7% in the year to August 2014 on the Sunshine Coast. Much of this strong growth is due to low interest rates, which have improved affordability and investment returns for owner-occupiers and investors.
Price growth is still moderate in Queensland and that may add to the attraction for interstate and overseas buyers.
Interest rates look likely to remain at these levels for much of 2015, particularly given the effect of the fall in mining investment and the RBA’s current bias towards expansionary settings for interest rates.
A strong residential sector has a very positive effect on the local economy. Real estate, retail, construction, finance and insurance, building materials companies, professional services and consultants all benefit from a growing housing sector. There is also a great pipeline of new and potential projects what will bring jobs and investment to the Coast.
Construction of Sunshine Coast University Hospital is well under way, but a potential expansion of Sunshine Coast Airport, a new light-rail project, a possible rail link to Caboolture, a solar power farm at Coolum and a new Maroochydore City Centre will also eventually offer jobs and employment.
Energy and mining construction may be coming to an end, but Queensland will continue to reap the benefits of gas and coal exports to Asia, where energy is in great demand. Our proximity to Asia gives access to a huge and rapidly growing middle class looking for things we have in abundance.
Aside from energy, this includes tourism, education, food and wine, clear blue skies, clean beaches, natural experiences and healthcare. The Sunshine Coast is well placed to benefit from this demand.
Now that the exchange rate is falling, overseas visitors and students will see Australia as a less expensive and highly desirable place to visit.
So the prospects for property development on the Sunshine Coast look excellent.
Sunshine Coast Daily, Saturday, December 6, 2014
Tags: Apartment Living, business, CBD, coast, development, maroochy boulevard, Maroochydore, master plan, opportunity, Queensland, Sunshine Cove, Sunshine Plaza, waterfront
Posted in Press Clippings
