South East Queensland’s Top 5 House Markets in 2020

As we edge closer to the end of a tumultuous 2020, perhaps it is time we stopped to reflect on how some property markets have performed throughout the year. Much of the news cycle continued to be skewed towards conjecture rather than fact in the race to be the first to predict what Coivd-19 would mean for various property markets. Now that data is becoming available and more reliable, many predictions are proving to be unfounded, which should give the community greater confidence as we begin planning for 2021.

As we enter the penultimate month of 2020 and circa 8 months since Australia recorded its 100th Covid-19 case, the data can now paint a clearer picture, particularly in regards to the established house market. In a concerted effort to share some positivity with our readers, this article will highlight the best performing house markets of 2020 throughout South East Queensland.

The table below provides a summary of South East Queensland’s top five house markets throughout 2020 in regards to annual percentage growth in median house price. It should be noted that in order to eliminate any skewed results, only suburbs that recorded a total of 50 sales or more in 2019 were included in the following analysis.

*Based on the assumption that average monthly sales rates recorded in the first 8 months of the year will continue until years end.

Starting with South East Queensland as a whole, the table above shows that the region is on track to record a 2.7% increase in median house price, whilst volumes are expected to fall by circa 7.6%. These numbers re-iterate that the Covid-19 fueled recession is far from typical. Instead of blanket declines across all industries, some have actually benefitted from social distancing requirements, whilst others have been able to adapt. Queensland’s ability (thus far) to avoid a subsequent surge in Covid-19 cases and targeted Federal Government stimulus programs have both played a role in limiting any great volume of forced house sales entering the South East Queensland market in 2020, though it’s important to acknowledge that this may not be the case in 2021.

A lack of urgency to sell and continued economic uncertainty has resulted in the forecasted 7.6% decline in volumes. However, and importantly, the resilience or growth in certain sub-sectors of the economy has ensured that the general decline in listings and supply has been met with some upward pressure on prices through steady demand in certain locations.

Across the five suburbs that have recorded the greatest percentage growth in median house price, there are some key similarities and differences that are worth noting. The most notable similarity is quite simply that four of the top five suburbs are located in the Sunshine Coast, with St Lucia being the outlier.

1. Sunshine Beach

Sunshine Beach has long been known as one of the Sunshine Coast’s most exclusive residential addresses, occupied by large, architecturally designed homes. It is a suburb that is known to host a reasonable portion of wealthy retirees at a median age of 46 years and with circa 34% of the population not contributing to the local labour force.

Sunshine Beach is generally a local buyers’ market, although its reputation does attract high net worth individuals, most commonly from other parts of Queensland, particularly out of Brisbane. Circa 55% of all houses sold in Sunshine Beach thus far in 2020 have been purchased by Sunshine Coast and Noosa based residents, whilst Brisbane residents have contributed 14% of sales. It’s important to note that Sunshine Beach has actually seen a decline in the portion of Brisbane and interstate buyers between 2019 and 2020 (down from 42% to 31%), which dispels suggestions that price growth may have been supported by an influx of capital city-based employees looking to capitalise on their newly found capacity to ‘work from home’.

The price surge in Sunshine Beach is instead thought to have benefitted from both the continual search for an alternative to the incredibly tightly held Noosa market and a search for greater long term returns on capital. Record low interest rates and economic uncertainty has seen some rise in enquiry across premium residential markets, with some people turning to residential assets for greater returns than they are achieving in the bank and arguably greater security than the stock market. With the Reserve Bank dropping interest rates to a new record low of 0.1% last week, this is a trend that is expected to continue in the short to medium term.

Source : The National Property Research Co.

2. St Lucia

The only non-Sunshine Coast based suburb to make the top 5, St Lucia is located less than 5 kilometres from Brisbane CBD (as the crow flies). Most commonly known for hosting the University of Queensland and much of its student populous, St Lucia is also a suburb that hosts a unique mix of topography with direct river front housing and elevated, leafy streets that offer views of the CBD.

Close proximity to the CBD and the University of Queensland means St Lucia is well favored by a diverse range of professional and white-collar employees for its inner-city convenience. It is also a suburb that will benefit from a handful of local infrastructure projects, including a new $65 Million primary school that will be built to ease congestion in the local school system and a new $450 Million town centre planned to be developed in the neighbouring suburb of Toowong. It is on the back of this type of infrastructure that St Lucia has begun to see a rise in premium townhouse and small to medium rise apartment projects in recent years. Local house price growth is likely to have been partially inflated by prospective development site acquisitions and some gentrification that is gradually driving the value proposition of detached houses, which are becoming increasingly scarce.

3. Sunrise Beach

Sunrise Beach has been able to ride on the coat tails of its neighbouring suburb of Sunshine Beach and is set to see its median house price soar above $1 Million for the first time in history. Priced at a 48% discount to Sunshine Beach despite sharing the same stretch of sand, Sunrise Beach is now being viewed as a logical alternative through its capacity to offer a similar lifestyle, whilst being just 3 minutes further from Noosa National Park and Hastings Street. Original houses are being renovated or replaced with modern homes, with more properties situated west of David Low Way resulting in a broader market appeal through the lower barrier to entry.

Like its neighbour, Sunrise Beach remains very much a local’s market, with 78% of its 2020 house sales attributed to buyers from within the Noosa region. Whilst the local economy has not been immune to Covid-19, the Education and Health Care industries accommodate more than 22% of the local labor force and have provided some level of economic resilience.

4. Minyama

Coming in at 4th and seeing a 25% annual increase in its median house price, Minyama is another exclusive real estate market situated on the canals, south of Mooloolaba. Minyama is undoubtedly a wealthy retiree location. It hosts the second oldest median age of any suburb featured in the top 5 at 52 years and more than 43% of the population is not active in the labour force. Much like most suburbs featured throughout, Minyama’s house market is a local’s domain, with buyers from within the suburb alone accounting for 73% of its 2020 house sales thus far. Accordingly, much of the sales activity that has taken place in Minyama in 2020 has been a ‘shuffling of the deck chairs’ for a local population that has had quite limited exposure to contractions in the workforce.

Much of the sentiment shared for Sunshine Beach and Sunrise Beach should be applied to Minyama in terms of a growing preference for residential assets over the minimal returns offered by the bank and some lack of confidence in the stock market. Uncertainty around stock market returns is arguably more pronounced for the older residents of Minyama, with many likely to hold painful memories of the stock market crash that occurred throughout the Global Financial Crisis, which may have prolonged some of their retirement plans. However, unlike other suburbs mentioned above, price escalation in Minyama has also been further bolstered by a significant reduction in property listings, with its relatively small and tightly held house market set to experience a 35% decline in volumes between 2019 and 2020.

5. Noosaville

Rounding out the top five is another Sunshine Coast based suburb in Noosaville, which has seen its median house price increase by 22% from $995,000 in 2019 to $1,215,000 in 2020. Noosaville is yet another of the Sunshine Coast’s most premium residential addresses, dominated by large canal or river front properties and located just 5 kilometres from Noosa National Park.

Noosaville hosts the oldest population of any suburb featured in the top five at a median age of 53 years, with circa 47% of the population playing no part in the labour force. It is also a suburb with a high national profile thereby usually attracting a number of buyers out of Melbourne and Sydney. That being said, Covid-19 related border closures have seen the total number of sales made to Victorians fall from 7% in 2019 to just 4% in 2020, whilst Sydney buyers have remained stable at 6 sales in 2019 and 7 sales in 2020. There is no evidence to suggest that Noosaville has experienced any significant surge in interest from interstate or intrastate migrants.

Local house price growth should instead be attributed to a reduction in listings and stable demand from wealthy, local buyers with limited exposure to ongoing economic downturns. Noosaville has long benefitted from the tightly held nature of the housing market in Noosa Heads, which has continued to push the value proposition further back from the headland, along the route of the Noosa River. It may come as a surprise for some to note that the 2020 median house price in Noosaville has reached a 13% premium over Noosa Heads.

So what does this tell us about residential property in 2020? Quite simply that the top end of town has the capacity to leverage the low interest rate environment and trade up. Local markets are increasingly more important given the closures to both the national and international border. The greatest job losses have occurred at the bottom of the employment chain, though middle management has also had its share of cuts which really hasn’t influenced many of the exclusive suburbs of SEQ. In general terms, the broader residential market has performed significantly better than anyone would have believed possible in April. The great year that 2020 was shaping up to be, may not have disappeared, just been delayed.

Tasman Nealon | Property Economist

Sunshine Coast's exclusive suburbs outperform SEQ in price growth

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