The capital growth returns of buying Sunshine Coast property for long term investment

The last few years for Sunshine Coast property buying and property values have been unprecedented, driven (among other factors) by the combination of huge demand as a result of COVID and the appeal of the coastal lifestyle where people could also work remotely, historically low interest rates as well as very limited supply. For those people who bought years ago, the capital growth returns of buying Sunshine Coast property over the long term have been significant.

The capital growth returns of buying Sunshine Coast property for long term investment 

If you had bought a house on the Sunshine Coast 5 years ago in one of the following suburbs, according to realestate.com.au you would have achieved an average gain over that period of:

133%	Minyama
185%	Sunshine Beach
106%+	Sunrise Beach, Peregian Beach, Noosa Heads, Doonan, Marcoola, Buddina, and Alexandra Headland

These are among the top 10 Sunshine Coast suburbs which have achieved strongest median price growth for houses, with many doubling or even tripling in value (depending on the location) over this time.

Sunshine Beach is the standout performer with 185% growth in median house values over the last 5 years.  If you had bought a house in 2017 at the median value of $1.2 million, the median value now is estimated to now be over $3.4 million!

As a small suburb at the beach with very limited land supply and desireability for investors and residents alike, it has always enjoyed strong growth over the years.

Below is an example of a house in Dwyer Street Sunshine Beach (address available upon request), and the change in value / sales price over a time period of 30 years (source: CoreLogic). Of course, this data doesn’t take into consideration money spent on renovations and alterations within that time period and we can’t provide an accurate estimate of what has been spent improving the property. But it is still a great example of the overall capital appreciation it has achieved over a long period, renovations aside. Imagine if the original owner had held on to that property over the whole time!

Case study: Buddina property value over time

Here is another example of a house in Buddina on the Sunshine Coast (address available upon request), and the change in its value over a time period of 30 years (source: CoreLogic).

 

You can see that in the early 1990s it was bought for $60,000. Around 10 years later it was bought for $275,000 (a 358% increase!) and it then doubled in another 10-12 years to $565,000, before 7 years later achieving a further 159% increase in value! In total, that’s a 2,345% increase in value over the 30 year period.

Again, the property has undergone renovations over the last few years, but irrespective of this the value over a 30 year period has increased exponentially, even if you took in to account the cost of renovations.

What are the likely capital growth returns of buying Sunshine Coast property for long term investment now?

Property prices are 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.

As Ray White chief economist Nerida Conisbee, commented “homeowners who took a long view to property investment made the largest gains. Although people buying and selling property quickly have done well through the pandemic, holding property long-term is always the best strategy to build wealth.  Even if you buy at the absolute peak of the market, keeping a property for a long time means that it barely matters.”

What your Sunshine Coast house might be worth by 2028

We all wish we had a crystal ball to predict where the market is heading, but unfortunately we’ve never been able to find one! In the meantime though, realestate.com.au’s Proptrack research tool gives an estimate of future median value of houses in each suburb in 5 years’ time, both in line with general expected inflation rate of growth as well as applying the recent rate of growth.

So from that tool, we have included here some examples of Sunshine Coast suburbs and the median value estimates in 5 years’ time:

 

Suburb	2017 Median	2023 Median	% increase	Median Price in 5 years
				Inflation Rate of Growth*	Recent Rate of Growth**
Minyama	$865,000	$2,012,500	133%	$2,333,000	$4,683,000
Sunshine Beach	$1,200,000	$3,422,500	185%	$3,968,000	$9,761,000
Sunrise Beach	$735,000	$1,750,000	138%	$2,029,000	$4,167,000
Noosa Heads	$930,000	$1,915,000	106%	$2,220,000	$3,943,000
Peregian Beach	$735,000	$1,450,000	106%	$1,681,000	$2,861,000
Doonan	$750,000	$1,730,000	131%	$2,006,000	$3,990,000
Marcoola	$595,000	$1,300,000	118%	$1.507,000	$2,840,000
Buddina	$750,000	$1,466,000	95%	$1,699,000	$2,865,000
Alexandra Headland	$875,000	$2,050,000	110%	$2,377,000	$4,309,000

For Sunshine Beach for example, if the same rate of growth continued for another 5 years, a property owner who had bought a Sunshine Beach property for long term investment at $1.2 million in 2017 would potentially have an asset worth over $9 million in 2028! And imagine what it would be worth in 30 years’ time……

 

Key tips for achieving optimal capital growth returns of buying your Sunshine Coast property for long term investment

So if your goal for 2023 is to invest in Sunshine Coast property and optimise your capital growth potential, here are key some tips to bear in mind:

1. Location, location, location

Properties which are located on quiet streets, close to key amenities (schools, hospitals, shopping), lifestyle elements (e.g. close to the beach or lifestyle precincts) and public transport will always be in demand so make sure that you can tick those key boxes if you’re looking for an investment property.

2. Quality of the property

Land supply is very limited on the Sunshine Coast, particularly in the Noosa region where there are very strict development controls, so look for properties which have good land components and properties with good floorplans which will help maximise capital growth opportunities for your Sunshine Coast long term investment property.

3. Value

Make sure that you assess the land-asset ratio of the property and have a good understanding of comparable recent sales / value in line with the current market dynamics to ensure you secure best value for your purchase.

4. Minimise your risk

If you are local, you may already have a great understanding of any risk factors on a property that you’re looking at if buying Sunshine Coast property for long term investment. Even if you are, it pays to have someone independent to take an unbiased look at the property for or with you to make sure you are aware of any negatives on the property which could impact you short or long term.  In addition, make sure you invest in a Building and Pest Inspection and get a conveyancer to have a thorough look at your contract before you sign on the dotted line.

Good luck! And if you need any help in finding the right property in the right location to achieve the best growth, we’re ready when you are.