The property tide is turning

Sunshine Coast Property Talk - September 2013 Property commentary in general is very shallow, ranging from international analysts telling is we have a “price bubble’ about to burst, to locals believing in “silver bullets’ such as the arrival of Spring, another interest rate drop or an election bringing immediate growth. It is none of these, rather over time key indicators moving in the right direction. Respected local analysts such as Messrs Matusik and Yardney suggest these include: * Declining interest rates - it is the level, not one cut that is the key. We are at all time lows. * Tight rental vacancy rates - a strong trend * Job growth - Qld has created 26,000 new jobs in 12 mths, big coast projects underway. *Lower Aussie $ - significantly lower over time * Declining stock listed for sale; less private treaty discounting & shorter time on market plus increasing sales volumes. * Rising confidence levels - financial institutions measure this with regular surveys, one reporting property buy sentiment is close to its pre-GFC high. This leads to the obvious conclusion we have nationally turned the corner. But how does the Sunshine Coast stack up against the specific property indicators? The answer is, very well *Rental vacancies The REIQ advises that 3% is considered the equilibrium point of supply & demand, and the rate on the coast is currently 2% *Stock for sale well down everywhere. Regular readers will know I maintain statistics for a territory of 2,000+ houses, the 10 year average is approx 3.5% of houses usually on the market. Last year it got to 5.7%, now down to well under 2%, a significant shortage. * Sales Volumes The Sunshine Coast saw a volume increase of 18% in house sales Jan -June 2013 compared to Jan-June 2012. *Price discounting & Time on Market Domain.com.au report for Post code 4573 Good improvement, but these are still significant & indicative that there is still a disconnect between various expectations, but with the low level of stock, the buyers are there & properties will sell if sellers listen to the market. The lower end has really taken off Median averages remain similar, price growth has not yet occurred, just volume movement. Note - Geoff averages sales with only 5.3% off list price, much better return for the seller House sales 12 months to Sep 2012 June 2013 Discount off list price 13.2% 9.8% Days on market 228 174