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Buying Sunshine Coast Property In 2023

6 opportunities for Sunshine Coast property buyers in 2023

We look at 6 opportunities for Sunshine Coast property buyers in 2023, following a chapter in the Sunshine Coast property market which has been unlike any other.

Significant demographic changes due to relocations and ability to work from home, affordability challenges due to successive interest rate rises and increasing inflation and limited Sunshine Coast property supply all impacted buying Sunshine Coast real estate over the last few years. In addition, rental properties continue to be in very short supply, with SQM Research reporting that vacancy rates for the region are currently around 0.7%.

Property prices are now in the correction phase of the property cycle in several Sunshine Coast locations. Conditions are generally more favourable for buyers than the last few years and buyers can be more selective when searching for their ideal property.

While there is further market correction expected in line with interest rate rises, those who are able to buy now should keep their eyes open for good opportunities in great locations, and when the right property presents itself – be prepared to act.

6 opportunities for Sunshine Coast property buyers in 2023

 

  1. If you are prepared to renovate, there may be good buying opportunities ahead

Tewantin Buyers Agent Property Purchase

Continued escalated construction costs for building and renovating are really deterring many buyers from purchasing unrenovated properties.

So if you’re prepared to do some hard work and take on a renovation project, there could be some better buying opportunities for you. Late last year we purchased this renovator in Tewantin on behalf of a client, on a 814m2 block with significant potential to add value.

  1. Cash buyers have a strong advantage in the current market

Interest rate rises have significantly reduced borrowing capacities and also urgency to purchase Sunshine Coast property. Multiple Sunshine Coast sales agents I have spoken with in recent months have commented that cash buyers have a strong advantage in this current market compared with those buyers requiring finance.

If you are a cash buyer or can offer good terms in relation to a contract and ready to purchase, you may well have a stronger negotiating position over many others. Make sure you use that to work for you when negotiating on a property.

  1. Strategic Sunshine Coast property buyers may find value purchasing opportunities if sales under distressed conditions increase

Many home buyers and investors overpaid for properties in boom Sunshine Coast market conditions of the last two years – believing the RBA’s inference that interest rates would stay low until 2024. The heat of the market is now over. And now many of those home buyers who bought in boom conditions are feeling the pinch of spiking mortgage payments, combined with surging inflation.

According to SQM Research, the number of homeowners selling properties under distressed conditions (ie. forced in to making a loss or accepting a lower price than they normally would) has risen by about 15% since interest rates began to increase.

With fixed interest rates due to increase further in February 2023, there may be some increases in the number of properties sold under distressed conditions as previously low fixed interest rate terms expire and the ability to pay at the higher interest rates will be unsustainable for some.

Strategic Sunshine Coast property buyers may find value purchasing opportunities during this period.

  1. Hinterland suburbs present great property buying opportunities on the Sunshine Coast

Sunshine Coast hinterland suburbs represent affordable buying with good returns. From a capital growth perspective, key drivers to consider include (among others):

  • Infrastructure spend – where the government is spending and investing, to identify areas which may have greater long term potential.
  • Proximity and amenity – ie. ease of access to major shopping / precincts, medical facilities, schools, transport, green space, lifestyle elements and Infrastructure (existing and upcoming).
  • Current and future prospects – supply parameters (eg. stock on market, inventory levels, new builds); and demand parameters (eg. employment, population, lifestyle elements and vacancy rates).

Here are 5 Sunshine Coast hinterland suburbs we are looking at for investment potential: 5 Sunshine Coast Hinterland suburbs to invest in 2023

Source: Core Logic (Real Estate Investar, January 2023)  *3 bedroom house

  1. For investors of Sunshine Coast properties, yields will continue to be strong in 2023

The Sunshine Coast will still represent great investment opportunities this year with ongoing population growth, affordability prospects relative to capital cities and significant infrastructure investment over the coming years. Demand for rental properties continues to be high and not expected to change in the short term particularly with forecast increase in migration this year, so for Sunshine Coast property investors the capital growth prospects combined with strong yield returns make the region an attractive investment prospect.

SQM Research indicates the current vacancy rate for the Sunshine Coast generally sits at 0.7% and rental yield on average are :

  • 2 bedroom units – 4.9%
  • All units – 4.6%
  • 3 bedroom houses – 4.2%
  • All houses – 4.0%
  1. Buying Sunshine Coast properties with value add investment opportunities to generate better yield and return

Late last year the Queensland Government announced immediate amendments to laws around the occupation of granny flats across Queensland, to respond to the current housing shortage.

For the next three years, lawfully established granny flats can now be occupied by anyone. Previously, the use of granny flats was restricted to only people within the same household as the main dwelling.

For buyers of investment properties on the Sunshine Coast, there is now the possibility (subject to approvals and zoning requirements) to generate even more income and greater yield from a property you purchase or own. Investors usually seek opportunities to add value through to their property and if they rented a granny flat out for say $250 per week, this means $13,000 per year in additional rental income. It also means the property has potentially a lot more value as it contains two liveable units rather than one.

2023 is definitely shaping up to be a better year for Sunshine Coast property buyers. I’m here to help guide you through the process, so if you need any support in finding your next Sunshine Coast property, please get in touch.

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