Sunshine Coast property market and buyers vs sellers markets

Last month I attended a Proptrack presentation by Cameron Kusher about the State of the Sunshine Coast property market and where it is heading in 2023.

As almost everyone knows, the last couple of years on the Sunshine Coast has seen an unprecedented migration of city dwellers to a coastal lifestyle  (thanks to COVID), creating unprecedented demand for Noosa and Sunshine Coast property.

As a result, the region very quickly went from a buyer’s property market to a seller’s property market – and the consequent pricing surge for property continued until late 2021.

But the tide is now turning, and 2023 may well result in better opportunities for buyers focusing on the Sunshine Coast property market – should interest rates continue to rise, cost of living pressures escalate and if unemployment rates change (among other things).

So what makes a seller’s market vs. a buyer’s market?

Understanding what the difference between the two is critical for anyone wanting to achieve best results in purchasing property on the Sunshine Coast and maximising their investment.

 

Seller’s property market

A seller’s market is simply underpinned by demand exceeding supply and not enough properties for the active buyers looking at theSunshine Coast property market. It generally is characterised by:

• Not enough properties to meet buyer demand
• Shorter time on the market
• Higher / escalating median property prices
• Method of sale, where auctions are much more common to generate maximum value for vendors through multiple buyers competing for the property
• Terms of sale are generally much more favourable to the vendor

On the Sunshine Coast, we saw this first hand in the past few years – properties would often sell within a day or two of listing or if auctioned, would have multiple bidders – and usually the contracts involved cash unconditional offers.

Buyer’s property market

In a buyer’s market, property is more affordable because supply exceeds demand. There are more homes on the market than there are buyers – putting downward pressure on property prices. Properties not only tend to sell for less, they also stay on the market longer. Less interest from buyers means motivated vendors need to price their properties more competitively to sell within a reasonable timeframe.

Although a buyer’s market typically means properties are cheaper to buy, they also might not offer much growth potential in the short term if the market is continuing toward negative growth.

Having been on the Sunshine Coast for over 10 years now and a history of buying on the Sunshine Coast for many years, I have seen both markets a few times over the years. For example, In the 2011-2012 GFC period up here, some properties were on the market for up to 2 years before selling ! At that time, properties were heavily discounted and more mortgagee sales were being undertaken where banks had forced vendors to sell to cover their outstanding debt.

A buyer’s market is naturally underpinned by supply exceeding demand. It is characterised by:

• More properties for sale, than buyers
• Longer time on the market
• Median prices for properties are lower
• Method of sale is more often listed prices
• Terms of sale often create more negotiation opportunities for buyers

As we are now settling in to the post-COVID way of life – and interest rates are rising as well as the appeal of living in a coastal community is not as urgent as it was for those living in lockdown for extended periods of time – we have seen over the past year now the shift to at least a much more balanced market for Sunshine Coast property.

We are currently between a balanced market and a buyer’s market  – there are less buyers for properties, much less urgency and reduced borrowing capacities due to changing interest rates and lenders updating their Household Expenditure Measure(HEMS). Buyers are much more cautious when it comes to buying property. At the same time we are not necessarily seeing urgency by vendors to sell their property yet so in some cases properties are simply remaining on the market for longer to find a willing buyer or turned in to rental properties given the attractive yield they offer.

For buyers, this is a good thing – you can take your time to find the right Sunshine Coast home to buy or investment property. And when you see it, make your move and use your best negotiation skills to achieve the best outcome for you. If you are a cash buyer, that is a major advantage in this market so use it to your best advantage. Or if you’re not confident, speak to a Sunshine Coast Buyer’s Agent who can help.

With Noosa Heads property growth over the last year has generally seeing an annual median growth of 10% for houses (source: CoreLogic) so it’s always worth keeping the long term growth potential in mind when purchasing property.