2018 EDITION 1 SUNSHINE COAST SUNSHINE COAST REGIONAL CENTRE
SUNSHINE COAST The Sunshine Coast is currently the 9th most populated area in the nation, with the latest ABS figures showing a population base of 303,389. This region holds approximately 6% of the Queensland population and on average has grown by approximately 6656 people per annum since 2007. The Sunshine Coast property market has experienced historic compounding growth rates of 8.13% for houses and 6.41% for units since 1978. Over the past 10 years the market has run at a growth rate of 2.41% PA for houses and 1.78% PA for units. In 2016, the dominant sector was Construction which contributed 15% to GRP. This was followed by Health Care & Social Assistance at 14%. Ideally, to minimize risk, we would like no one industry at more than 10% contribution. Over 2017 there is approximately $2900 per person committed to public infrastructure spending for projects over $10 million in the Sunshine Coast Region. $2900 per person of spending in the pipeline is considered average based on the national average of $3000 per person. MAJOR PROJECTS APPROVED Sunshine Coast University Hospital / Caloundra Health Service Refurbishment / Caloundra South New Primary School / Sunshine Coast Airport Expansion / Maroochydore City Centre Priority Development SUNSHINE COAST AS WE SEE IT We believe this market is showing Limited Value. Given the rate of long term growth, economic diversification and the population base we believe it is best suited to a Short to Medium Term Trading Strategy. We classify the Sunshine Coast as a Medium to High Risk investment based on the size of the population, population growth, stage of the cycle and economic factors. 2
AT A GLANCE Type of Tenure Other, 1.8% Not Stated, 2.5% Rented, 29.6% Owned Outright, 33.1% SUNSHINE COAST 2018 Owned with Mortgage, 33.1% Median rent for houses on the Sunshine Coast is $440 and $355 for units. Rents have increased approximately 4% per annum since 2008. THE SUNSHINE COAST HOUSE MARKET PREVIOUSLY PEAKED IN 2008 AND HOUSE PRICES ARE CURRENTLY 20% HIGHER THAN THIS LAST PEAK. THE UNIT MARKET LAST PEAKED IN 2010 AND THE CURRENT UNIT MEDIAN PRICE IS 8% HIGHER THAN 2010 PRICES. Both houses and units have experienced less than the historical growth rate over the last 10, 7, 5 and 3 years. 2008 4.00% YIELDS ON THE SUNSHINE COAST HAVE BEEN STAGNANT SINCE 2011 AND ARE CURRENTLY SITTING AT 4% FOR HOUSES AND 4.7% FOR UNITS. After experiencing a high of 4.1% in 2011, vacancy rates are currently at 1.4%. In 2017, dwelling approvals are 124% higher than in 2011. THE CURRENT UNEMPLOYMENT RATE IS 5.9% down from a high of 6.8% in 2015. The Sunshine Coast s unemployment rate is above the current national rate of 5.5%. THE SUNSHINE COAST S POPULATION HAS INCREASED ON AVERAGE 2.5% PER ANNUM OVER THE LAST 10 YEARS. FORECASTS SUGGEST THAT THE POPULATION WILL RISE TO 452,987 PEOPLE BY 2036. 0 125K 250K 375K 500K 3
CONTENTS Key Indicator 1 THE ECONOMY Key Indicator 4 SUPPLY FACTORS Gross Regional Product Slightly Negative Vacancy Rate V. Median Rent Positive Council Budget Slightly Positive Dwelling Approvals Slightly Negative Industry Diversity Slightly Negative Bedroom Commencements V. Population Slightly Negative Stock on Market Slightly Positive Key Indicator 2 AFFORDABILITY Days on Market Neutral Gross Affordability Index (House) V. Price Growth Gross Affordability Index (Unit) V. Price Growth Slightly Positive Positive Key Indicator 5 INVESTMENT VALUE Median Price V. Income Slightly Negative Long Term Performance Slightly Positive Median Price V. Rent Neutral Yield Neutral House V. Unit Price Movements Positive Key Indicator 3 DEMAND FACTORS Population Population Pyramid Unemployment Rate Job Creation Infrastructure Spending Airport Arrivals Slightly Positive Negative Neutral Slightly Positive Slightly Positive Neutral Sunshine Coast V. Brisbane Price Price Comparison Slightly Positive Neutral 4
OUR VIEW OF THE SUNSHINE COAST HOUSE MARKET We believe that currently this market is showing Limited Value. AVOID LIMITED VALUE The market is showing some value opportunities. Overall, most fundamental indicators support growth. LIMITED VALUE SUNSHINE COAST SUBURB RANGE - HOUSES AVOID CAUTION The market is showing no value and price falls in the short term are possible. There are no fundamentals that support price growth in the short term. CAUTION The market is close to being overvalued and/or oversupplied. We see minimal growth over the short- to medium-term. VALUE VALUE The market is showing good value on most properties. Many fundamental indicators exist which support strong growth. For more information on the Sunshine Coast market, including individual property and suburb selections, call to speak to one of our professional property advisors on 03 8539 0300. 5
OUR VIEW OF THE SUNSHINE COAST UNIT MARKET We believe that currently this market is showing Limited Value. AVOID LIMITED VALUE The market is showing some value opportunities. Overall, most fundamental indicators support growth. LIMITED VALUE SUNSHINE COAST SUBURB RANGE - UNITS AVOID CAUTION The market is showing no value and price falls in the short term are possible. There are no fundamentals that support price growth in the short term. CAUTION The market is close to being overvalued and/or oversupplied. We see minimal growth over the short- to medium-term. VALUE VALUE The market is showing good value on most properties. Many fundamental indicators exist which support strong growth. For more information on the Sunshine Coast market, including individual property and suburb selections, call to speak to one of our professional property advisors on 03 8539 0300. 6
GROSS REGIONAL PRODUCT V. MEDIAN PRICE $600,000 $545,000 $570,000 16,000 $500,000 $519,500 $495,000 $475,000 $480,000 $468,000 $462,500 $452,250 $449,000 $447,250 14,000 12,000 $400,000 $400,000 $385,000 $392,500 $330,000 10,000 SLIGHTLY NEGATIVE $300,000 8,000 235,000 $200,000 $179,500 6,000 4,000 $100,000 2,000 $- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0 GRP ($Mil) Median House Price 7
SUNSHINE COAST CITY COUNCIL BUDGET POSITION $30,000,000 $25,000,000 $24,313,000 $22,828,000 $20,000,000 $19,040,000 SLIGHTLY POSITIVE $15,000,000 $15,025,000 $12,713,000 $10,000,000 $7,680,000 $5,000,000 $- 2012 2013 2014 2015 2016 2017 8
INDUSTRY DIVERSITY Other Services, 3.00% Arts and Recreation Services, 1.00% Agriculture, Forestry and Fishing, 2.00% Mining, 1.00% Manufacturing, 6.00% Health Care and Social Assistance, 14.00% Electricity, Gas, Water and Waste Services, 3.00% Education and Training, 7.00% Construction, 15.00% SLIGHTLY NEGATIVE Public Administration and Safety, 4.00% Administrative and Support Services, 3.00% Wholesale Trade, 4.00% Professional, Scientific and Technical Services, 5.00% Rental, Hiring and Real Estate Services, 5.00% Retail Trade, 8.00% Accommodation and Food Services, 5.00% Financial and Insurance Services, 8.00% Transport, Postal and Warehousing, 4.00% Information Media and Telecommunications, 2.00% 9
GROSS AFFORDABILITY INDEX (HOUSE) V. PRICE GROWTH 70% 60% 54% 62% 50% 48% 48% 49% 40% 30% 44% 37% 32% 29% 36% 39% 31% 23% 24% 24% 28% 23% 31% 30% 41% 40% 33% 42% 37% 33% 28% 29% 27% 30% 31% SLIGHTLY POSITIVE 20% 17% 13% 12% 10% 8% 7% 7% 6% 3% 3% 3% 6% 9% 6% 3% 3% 7% 5% 5% 5% 0% 3% 2% 2% -1% -1% -1% -10% -6% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Median House Price Affordability Index (State Income) (Avg 36%) 10
GROSS AFFORDABILITY INDEX (UNIT) V. PRICE GROWTH 50% 47% 47% 40% 41% 39% 40% 42% 42% 34% 33% 35% 33% 32% 30% 20% 29% 26% 29% 23% 23% 23% 27% 20% 23% 19% 26% 28% 25% 20% 21% 20% 22% 22% POSITIVE 16% 10% 0% 5% 6% 4% 10% 6% 2% 3% 8% 4% 0% 3% 0% 4% 5% 2% 3% 1% 1% 0% 1% 5% 4% 3% 3% -10% -7% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Median Unit Price Affordability Index (State Income) (Avg 29%) 11
MEDIAN PRICE V. INCOME $600,000 $500,000 $1,496 $1,452 $1,471 $1,416 $1,426 $1,356 $1,372 1,275 $1,200 $1,107 $1,600 $1,400 $1,200 $400,000 $300,000 $200,000 $401 $437 $461$484 $503 $558 $575$584 $611 $600 $617$659 $566 $662 $670 $786 $759 $722 616 $848 $866 $921 $958 885 $1,025 1,010 $1,000 $800 $600 $400 SLIGHTLY NEGATIVE $100,000 $200 $- $- 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Median House Price Income QLD HH Income Sunshine Coast 12
MEDIAN PRICE V. RENT $600,000 $500 $426 $440 $450 $500,000 $400,000 $280 $303 $343 $274 $350 $290 $356 $293 $362 $296 $364 $298 $378 $306 $393 $320 $411 $333 $344 $355 $400 $350 $300 NEUTRAL $300,000 $245 $250 $224 $200 $200,000 $150 $100 $100,000 $50 $- 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 $- Median House Price Median Unit Price Median Rent House Median Rent Unit 13
POPULATION 4.0% 3.5% 3.08% 3.0% 2.82% 2.81% 2.89% 2.89% 2.63% 2.5% 2.46% 2.37% 2.50% SLIGHTLY POSITIVE 2.0% 1.94% 1.5% 1.59% 1.0% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Queensland Sunshine Coast 14
POPULATION PYRAMID Age in years Males 85 + Females 80-84 75-79 70-74 65-69 60-64 55-59 50-54 45-49 NEGATIVE 40-44 35-39 30-34 25-29 20-24 15-19 10-14 5-9 0-4 4 3 2 1 0 0 1 2 3 4 % of males % of females Source: Australian Bureau of Statistics, Census of Population and Housing, 2016 (Usual residence data) Compiled and presented in profile.id by.id, the population experts. Sunshine Coast Greater Brisbane 15
UNEMPLOYMENT RATE 14.0% 12.0% 11.8% 11.0% 10.9% 10.0% 8.8% 8.0% 7.4% NEUTRAL 6.0% 5.1% 6.4% 5.1% 5.3% 6.5% 5.9% 6.2% 6.3% 6.7% 6.8% 5.9% 5.7% 4.2% 5.0% 4.0% 2.0% 0.0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Sunshine Coast Queensland 16
JOB CREATION INDEX 160 140 120 100 SLIGHTLY POSITIVE 80 60 40 20 0 Sep 2011 Nov 2011 Jan 2012 Mar 2012 May 2012 Jul 2012 Sep 2012 Nov 2012 Jan 2013 Mar 2013 May 2013 Jul 2013 Sep 2013 Nov 2013 Jan 2014 Mar 2014 May 2014 Jul 2014 Sep 2014 Nov 2014 Jan 2015 Mar 2015 May 2015 Jul 2015 Sep 2015 Nov 2015 Jan 2016 Mar 2016 May 2016 Jul 2016 Sep 2016 Nov 2016 Jan 2017 Mar 2017 May 2017 Jul 2017 Sep 2017 17
PUBLIC INFRASTRUCTURE SPENDING $1,000,000,000 $3,250 $900,000,000 $2,706 $2,909 $2,750 $800,000,000 $700,000,000 $600,000,000 $1,672 $2,072 $2,143 $2,250 $1,750 SLIGHTLY POSITIVE $500,000,000 $1,492 $1,473 $400,000,000 $1,135 $820,825,000 $882,701,667 $1,250 $300,000,000 $628,565,667 $650,036,667 $750 $495,000,000 $200,000,000 $421,000,000 $426,000,000 $100,000,000 $312,000,000 $250 $- -$250 2012 2013 2014 2015 2016 2017 2018 2019 Spending Per Person 18
AIRPORT ARRIVALS $600,000 600,000 $570,000 $545,000 $519,000 $495,000 $500,000 500,000 $475,000 $480,000 $462,500 $449,000 $447,250 $400,000 $400,000 $385,000 400,000 $330,000 NEUTRAL $300,000 300,000 $235,000 $200,000 200,000 $179,000 $156,000 $152,000 $147,000 $131,500 $144,000 $122,500 $165,000 $115,000 $106,000 $140,000 $143,000 $94,000 $100,000 $74,500 100,000 $58,000 $55,000 $- - 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Domestic Arrivals International Arrivals Median House Price 19
VACANCY RATE V. MEDIAN RENT $500 4.5% $450 3.9% 4.1% $411 $426 $440 4.0% $400 $350 $300 3.2% $342 $274 $350 $290 3.5% $356 $293 $362 $296 $364 2.7% $298 $378 $306 $393 $320 $333 $344 $355 3.5% 3.0% 2.5% POSITIVE $250 2.0% $200 1.7% $150 1.2% 1.5% 1.4% 1.4% 1.5% $100 1.0% $50 0.5% $- 0% 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 House Rent (3 Bed) Unit Rent (2 Bed) Vacancy Rate 20
DWELLING APPROVALS V. VACANCY RATE 4.5% 5,000 4.0% 4,372 4,569 3.9% 4.1% 4,547 4,500 3.5% 3,896 4,000 3.5% 3.0% 2.5% 2,881 2,625 3,028 3.2% 3,238 2,365 2,493 2.7% 2,807 3,104 3,500 3,000 2,500 SLIGHTLY NEGATIVE 2.0% 2,028 1.7% 2,000 1.5% 1,578 1,693 1.5% 1.4% 1.4% 1,500 1.0% 1.2% 1,000 0.5% 500 0% 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 House Other Total Vacancy Rate 21
BEDROOM COMMENCEMENTS V. POPULATION CHANGE 10,000 9,000 9,138 8,000 7,000 6,000 8,744 6,486 6,655 6,056 7,491 6,476 7,247 7,725 7,237 6,930 5,614 6,850 6,208 7,792 7,406 9,094 SLIGHTLY NEGATIVE 5,000 5,762 5,250 4,730 5,006 4,986 4,188 4,000 4,056 3,000 3,156 3,386 2,000 1,000 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Approvals Based on 2.5 Persons per HH Population Change 22
STOCK ON MARKET 16,000 14,000 13,414 13,000 12,546 12,456 12,000 12,000 12,000 11,500 11,000 10,000 10,500 SLIGHTLY POSITIVE 8,600 8,000 6,000 4,000 2,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 23
DAYS ON MARKET 70 60 58 58 58 57 57 57 57 55 50 47 46 46 45 43 43 43 42 40 NEUTRAL 30 20 10 0 Jan 2017 Feb 2017 Mar 2017 Apr 2017 May 2017 Jun 2017 Jul 2017 Aug 2017 Houses Units 24
LONG TERM PERFORMANCE 9% 8.13% 8% 7% 6.41% 6% 5% 4.97% 4.81% SLIGHTLY POSITIVE 4% 3.53% 3% 3.04% 3.14% 2.41% 2% 1.78% 1.13% 1% 0% LT (39Yr) 10Yr 7Yr 5Yr 3Yr Houses Units 25
YIELD 5.0% $600,000 4.5% 4.6% 4.6% 4.6% 4.6% 4.6% 4.7% 5.0% 4.0% 3.7% 3.7% 4.0% 3.9% 4.2% 3.9% 4.2% 4.2% 4.2% 4.2% 4.1% 4.1% 4.1% 4.0% $500,000 4.0% 3.5% $400,000 3.0% NEUTRAL 3.0% $300,000 2.0% 2.0% $200,000 1.0% $100,000 1.0% 0% $- 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Yield House (3Bed) Yield Unit (2Bed) Median House Price Median Unit Price 26
HOUSE V. UNIT PRICE MOVEMENTS $600,000 180% 155% 160% $500,000 147% 130% 129% 132% 140% 129% 122% 140% $400,000 $300,000 116% 115% 105% 101% 94% 91% 89% 91% 91% 90% 94% 98% 99% 96% 94% 86% 77% 80% 82%83% 86% 78% 75% 77% 76% 75% 76% 74% 73% 72% 69% 71% 120% 100% 80% POSITIVE $200,000 60% $100,000 40% 20% $- 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 0% Median House Price LGA Median Unit Price LGA % Difference Between House & Unit Price (Avg 96%) 27
SUNSHINE COAST V. BRISBANE PRICE COMPARISON 160% $600,000 140% 140% 127% 125% 125%123%123% $500,000 120% 100% 92% 93% 106% 102% 96% 111% 112% 110% 108% 109% 104% 103% 110% 102% 108% 106% 113% 112% 104% 104% 104% 104% 105% 101% 104%105% $400,000 SLIGHTLY POSITIVE 87% 80% $300,000 60% $200,000 40% $100,000 20% 0% $- 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Brisbane Median Sunshine Coast Median % Difference (Avg 108%) 28
PRICE COMPARISON 80% 73% 67% 60% 51% 54% 40% 35% 37% 28% 24% NEUTRAL 20% 9% 7% 0% -20% -19% -13% -40% Townsville Brisbane Cairns Gold Coast Toowoomba Mackay Current Average 29
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