Sunshine Coast

2010 Year End Review

The Year started with a lot of talk about how Australia had largely dodged the effects of the Global Financial Crisis with the worst of the market conditions over. In hindsight this was a bit optimistic with the Sunshine Coast feeling the aftermath of the financial pain in Europe and the USA.

Residential Sales

At the beginning of this year there was seemingly strong demand from first home buyers in the $400,000 range primarily for Houses. However through the year, demand has remained thin. By the end of the year there was a surge in demand for high end properties; For example Col Roper from our Esplanade office handled three key sales in the fourth quarter; a $6 Million House on Mooloola Island, a $2.5 Million Unit in Oceans Resort on Mooloolaba Esplanade and a $2.7 Million Penthouse in First Avenue Apartments in Mooloolaba.

Overall the 2010 - 2011 financial year has so far seen a strong increase in sales volumes for Mooloolaba Real Estate: up 31% on last year but on a par with 2008-2009 and 19% down on 2007-2008 volumes. Clearance rates of properties on the market is very low;  out of 2,074 listings in Mooloolaba, Alexandra Headland and Maroochydore listed on www.RealEstate.com.au only 76 are under contract; a low 3.7%.

Market movement is being dictated to a large extent by the financial institutions who are being very tough on their lending criteria including how the bank valuations are undertaken (ie instructing them to value net of marketing costs and assuming a sale within 3 months) . Although we haven’t seen many residential foreclosures, we are seeing the Banks exerting more and more pressure on struggling owners. As an agent, it has been particularly difficult to gauge current house values as some are selling under distress conditions brought on by the financial lenders and others seemingly achieving healthy prices.

Going forward I am encouraged by the forthcoming sale of Horton Park Golf Club to the Council:  although I lose a home Course I believe it will be very good for the Coast in terms of generating much needed jobs in construction and infrastructure. It is also good news to see that the new general Hospital will be built. The expansion of the Maroochydore Airport coupled with new direct flights from New Zealand should help tourism and provide some imputus to the investment market.

On a negative note we are concerned about the tough stance of the Maroochy Council under Bob Abbott towards Development; a number of key Developers have given up the ghost on the Sunshine Coast as it is too hard, too expensive and too time consuming to get projects done. It is disappointing that while the Council had not allowed any Developers to build above 10 storeys, they will now sell some of the Horton Park excess land with a zoning to build 12 storeys. Also, it was “interesting” that while every normal office and residential building must have a minimum car parking allocation that rule does not apply to the State Governments Building on First Avenue in Maroochydore which has minimal or no car parking; a “Green Building”!.

Residential Rentals

Ray Backrack, Senior Property Manager of Mooloolaba Real Estate advised that the Rental market probably reflects how strong the employment market is on the Coast. From August to October 2010 our vacancy rate grew to around 6.5% however is now at a low of 0.5%. Rental levels have been flat through the year following a healthy growth of 5% last year.

Holiday Rentals

Belinda Catley, General Manager for Holiday Mooloolaba has seen strong demand for both quality & budget Holiday accommodation on the Sunshine Coast this year. Through the Christmas period all of our Holiday Units and Houses were 100% occupied; something we haven’t seen for many years. Our portfolio of managed properties has also grown by 40% through 2010 and occupancy has increased by 20% from 2009.

We have been disappointed with the failure of the Sunshine Coast Council to promote Mooloolaba and the sunshine Coast as a key tourist destination. We have personally attempted to encourage and fund council to promote the Sunshine Coast and implement infrastructure which will attract interstate and international clientele but to no avail.

Commercial Sales and Leasing

One of the major sellers on the Sunshine Coast over the past 12 months has been the Juniper Group who have disposed of various Commercial assets in Mooloolaba including units in Oceans, Sirocco, Caribbean, their Head office on Brisbane Road and a development site on Mooloolaba Esplanade. The Junipers achieved excellent prices on all of these assets showcasing the demand for this type of Investment. The Junipers are believed to be focussing on their Gold Coast Development.

There has only been one office building coming on stream, La Balsa on Brisbane Road, Mooloolaba. Take-up within the project has been very healthy.