The month in review: Sunshine Coast
By Herron Todd White
October, 2009
When talking to various people from different walks of
life, one thing is certain; there are mixed messages all
over the place. Whether it is based on the economy, share
market or the property market, these mixed messages are certainly creating confusion. When looking at the
residential property market as a whole on the Sunshine
Coast, there are mixed messages everywhere.
We all know that the lower-priced sectors of both
housing and units have been the strongest sectors over
the past nine months on the back of the various stimulus
packages. These properties have been by and large
owner occupied and are essential. The sectors where we
have seen biggest falls have been based generally around
discretionary/lifestyle properties.
Certainly the upper price level homes and units fall into
these categories. Instead of people selling their principal
place of residence, they are selling the holiday house and
subsequently we have seen a significant softening in the
values. In some cases, these values have fallen well below
replacement cost.
Rural residential properties, which in some cases are also
considered somewhat discretionary by nature, have also
experienced a softening in values as demand for this type
of product also weakens. Essentially, the development
and maintenance costs for these types of properties are
becoming less enticing for purchases.
There is an interesting change in the gap between lower
priced property and upper priced properties. For example,
a property that was worth approximately $350,000 in say
2005, is now worth in the vicinity of $400,000. Whereas
a property that was previously worth $1,300,000 in
the same period is now worth $1,000,000. This gap has
shrunk significantly, which would lead us to believe
that something has to give. Whether that is the lowerpriced
properties are to fall in values, or the upper price
properties are to increase in values, is anyone’s guess.
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