Australia’s leading property market analysts and data collectors, CoreLogic released their latest report on the health of the national property market this week, and there’s plenty of good news, particularly for regional markets along the eastern seaboard, such as the Sunshine Coast.
December home value data showed the combined regional dwelling market increased 6.9% in value over the year; a growth rate more than three times the rate of the combined capital cities.
But even more impressive than value changes in 2020, is the return that some areas have shown in the longer term. They report that across Queensland, the Gold Coast and Sunshine Coast have seen long term growth rates align more closely with average increases across the capital city sub-markets (1.5%). But further to this, the 10-year annualised growth rates have surpassed the increases in every other capital city and regional submarket across the sunshine state. So clearly COVID may have contributed to this trend, but this was growth was occurring well-prior of the pandemic!
Why have major coastal markets performed so well in the past decade?
CoreLogic surmises a major driver of dwelling market value increases comes from population growth. Out of 88 sub-markets across Australia, the Gold Coast and Sunshine Coast have seen the highest volume of net internal migration, or arrivals minus departures from other parts of the country, for the three years to June 2019. Over this time, these markets gained 39,770 additional residents from other parts of Australia.
While the trend of moving from capital cities to regional Australia is nothing new, COVID-19 may have exacerbated the desirability of regional Australia. This may be because relatively strict restrictions were implemented across major capital cities, and remote work has been increasingly enforced as a way to combat the spread of COVID-19.
But population growth is unlikely to be the only factor at play; one of the reasons for the longer-term popularity of markets major coastal centres could be proximity to major cities.
The rise of cities within a ‘commutable distance’ to the capital cities have enabled a regional lifestyle with the benefit of maintaining access to the employment opportunity and amenity of the capitals. This combination has attracted a greater price premium over time. Previous notes have also reflected on the idea that nearby coastal markets may rise in value as capital cities become less affordable, creating a ‘spill over’ of demand as people are priced out of cities.
In summary, CoreLogic concludes that with a positive outlook in place for housing assets in 2021, regional Australian dwelling markets may continue to rise in value. The results of the past decade suggest the best long-term returns are not always found in the capital city dwelling markets.
It all bodes very well indeed for well-located lifestyle markets such as our very own Mount Coolum and surrounds. Our star continues to rise…