We spent the long weekend on the Sunshine Coast. We love it, as do the kids and it is certainly, somewhere we could call home.
Picture : Happy Valley, Caloundra
Herron Todd White provided this Sunshine Coast Property Update for October 2019.
Investors in the Sunshine Coast property market have been pretty active over a number of years. Market sentiment has improved which has, in turn, instilled confidence in the marketplace. The main driver of this sentiment has been the major infrastructure projects currently underway across the coast. The current low-interest rate environment has also had investors looking to property to increase their returns. Across the coast, gross yields normally tend to range between 4% and 15% which reflects the relative risk on investment.
Properties situated within areas underpinned by re-development potential or situated in unique and sought after locations tend to be at the lower end of the yield range. A yield at the higher end of the range indicates the location, condition of the property and the additional maintenance costs required. Units within the main tourist precincts can also achieve gross yields up to 15% however with high body corporate and management fees, these properties tend to show net yields in the 2% to 6% range.
There has been a large increase in dual occupancy homes constructed across the coast with a main dwelling typically providing three-bedroom accommodation and an attached one or two-bedroom unit. These properties have been primarily purchased by investors and have been selling with gross yields between 5.9% and 6.3%.
Slightly higher yields can be achieved through the hinterland townships with properties comprising three to five flats in the Nambour area achieving yields in the 7% to 8% range. Typically, these properties are older with ongoing maintenance required.
In the prestige market, we have started to see an increase in the number of investors. This market is typically difficult to gauge given that there are a number of different drivers in the investment decision. This market is closely related to the southern markets of Sydney, Melbourne and Brisbane, so at the moment has been pretty good. A number of investors in this segment are certainly purchasing for a position or lifestyle choice and in quite a number of cases, with a view to the investment being the future retirement home and principal place of residence. Therefore, a higher yield is not always driving the purchasing decision.
All in all, the investment market on the Sunshine Coast has been pretty healthy.