Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Coast Safe from Inflated Market Crash; Real Estate Prices Here Haven't 'Bubbled'

Newspaper article Sunshine Coast Daily (Maroochydore, Australia)

Coast Safe from Inflated Market Crash; Real Estate Prices Here Haven't 'Bubbled'

Article excerpt

BILL

HOFFMAN

bill.hoffman@scnews.com.au

MISSING out on the boom that has inflated Melbourne, Sydney and Brisbane prices could save the Sunshine Coast from the inevitable collapse of Australian east coast property prices many are now predicting.

While Sydney and Melbourne prices particularly headed to the stratosphere and now sit vulnerable to any slowing of demand from Chinese investors, and Brisbane sags under a glut of unit development, the Sunshine Coast has steered a steady-as-she-goes course.

Demand has strengthened here but the Sunshine Coast has not seen a return to the pre-GST seven-year boom cycle that for more than two decades had been a characteristic of its market.

Meanwhile across Australia's five largest cities prices have fallen 1.1% in May according to market monitor Corelogic. The drop comes as the Australian Prudential Regulation Authority moves to limit interest-only loans to just 30% of bankers' loan portfolios.

New project approvals have also fallen by 17.2% to April Australia-wide and have been falling since mid-way through 2016.

Queensland Treasurer Curtis Pitt announced this week an increase of 3.4% across the state with medium-to-high density dwelling approvals up 10.8% in April offsetting a 2.2% fall in house approvals for the month. The April result contrasts with year-to-date numbers that are off 19.9% caused by a slowdown in units, apartments and townhouses after a period of rapid growth.

Altair Asset Management chairman and chief investment officer, Philip Parker, sent shock waves through the real estate industry and investment community early this week, announcing the liquidation of the company's positions and the return of hundreds of millions of dollars in cash to investors.

Among his concerns were that valuations were stretched and the Australian east coast property market bubble faced an impending correction.

While some property industry executives have dismissed his comments as over-stated and his investment decisions as an overreaction others agree with Mr Parker that now was the time for caution.

CBRE Commercial Property Sunshine Coast managing director Rem Rafter, who on Thursday announced a $21million retail complex sale in Noosa's Hastings St, acknowledged there was a lot of concern about the market.

He said economists who had rated it alive and well now said there was no question we are in a bubble with the Melbourne market more vulnerable than Sydney, which he thinks would go off the boil but not suffer a sharp downturn.

Mr Rafter said those corrections would flow into the Brisbane market.

"The Sunshine Coast is well placed," he said.

"We never had the boom period here. We've had no sharp upward movement (in prices)."

Mr Rafter said if predictions of a collapse in the east coast market were correct the Sunshine Coast would, to a large extent, be insulated.

"There is no oversupply and there are significant infrastructure projects going on that create jobs," he said. …

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