Coast Rents Hit Record Highs
Rents have soared to record levels in many coastal areas in response to shrinking supply and rising demand from tenants moving out of the big cities and into regional locations.
The Australian Financial Review reports that asking rents for houses in the Gold Coast region have surged 32% in the past 12 months to a record high, while units have risen 16%.
Sunshine Coast houses also fetched record high rents, rising 18.5% for houses and 15.7% for units.
“I’ve just never seen these large rises before,” says SQM Research managing director Louis Christopher.
“We thought the migration away from the CBDs would be reversed, but it looks like people continue to seek out bigger spaces in areas offering desirable lifestyles.
“We now know there won’t be a reversal of the trend away from the cities.”
High tenant demand has pushed vacancy rates to record lows in markets like the Gold Coast, which is now well below 1%.
SEQ Prestige Values Rise
Brisbane and the Gold Coast are leading the uplift in prime Australian residential markets over the past 12 months, according to Knight Frank’s latest Prime Global Cities Index which tracks the movement in the top 5% of the global residential market across each quarter.
The research shows Brisbane, the Gold Coast and Perth all recorded growth between 3.5% and 4%.
The global report notes that Australian markets overall are seeing lower growth than most other global markets, especially the major cities of Sydney and Melbourne which have experienced softer growth at 1.9% and 0.4% respectively.
The report noted that global prime residential prices are rising at their fastest rate since Q4 2017 with housing markets in value terms increasing 4.6% over the past 12 months.
“The five major Australian cities have reported positive annual growth every quarter since Q4 2017,” Knight Frank’s head of residential research, Michelle Ciesielski, says.
Investor Optimism On The Rise
Investor sentiment is improving while home-buyer confidence is falling, according to ME Bank’s latest Quarterly Property Sentiment Report.
The second quarter of 2021 saw the overall sentiment in the residential property market decline by 7 percentage points to 42% following record-high sentiment in the first quarter. But investors recorded the highest level of positive sentiment at 52%.
According to ME’s Claudio Mazzarella, sentiment trends have changed following the rapid rise of the property market post-pandemic.
He says the fall in prices in some cities last year created an opportunity for first-home buyers, but many investors became nervous. Now prices have rebounded and affordability is going down, FHBs aren’t as positive but investors have become active.
One of the main contributors is the drop in available properties: 60% of respondents believe there “isn’t enough choice in the current market”.
Regional Market Doubles Cities Growth
Regional Australia has been the biggest beneficiary of the booming market, with price rises averaging 13% over the past 12 months. This was double the growth rate in the capital cities, where price gains averaged 6.4%, according to CoreLogic’s Regional Market Update.
SQM Research reports that house prices nationally have risen 12.7% in the past year, but only 5.6% in the combined capital cities, confirming the biggest growth is in the regions.
The CoreLogic report says Richmond-Tweed in NSW (which includes Byron Bay and Lennox Head) took the top spot for capital gains for both houses (22%) and units (15.5%).
CoreLogic research director Tim Lawless says: “This can partly be explained by the ongoing popularity of remote and flexible working arrangements, but also increased demand for lifestyle properties and holiday homes.”
A net 43,000 moved to regional areas from capital cities in 2020, according to ABS figures – the largest net inflow to the regions since the series began in 2001.
