Sunshine Coast property prices have continued to tumble after reaching dizzy heights earlier in the year.
The region experienced the largest decline (7.1 per cent) in regional Queensland and the third largest in regional Australia, from August to October.
Average house values also fell by 9.5 per cent during six months, from a peak of $1.1m in April, to just above $1m in October. Unit prices fell by 8.7 per cent, from their peak of $785,000 in May.
Core Logic economist Kaytlin Ezzy said rising interest rates were likely making an impact.
“One possible cause for the Sunshine Coast’s more dramatic decline in house and unit values, compared to other regional markets, is its higher median value,” she said.
“As one of the most expensive regional markets, Sunshine Coast homeowners are more sensitive to changes in interest rates, so the six consecutive rate hikes have had a significant dampening effect on values.”
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Ms Ezzy said buyers now had more options.
“We’ve seen total advertised listings across the region trend upwards, offering prospective buyers more choice and more power when negotiating a price.”
“This is a stark reversal of the trend seen over the COVID period when strong buyer demand and low supply levels saw the negotiating power skewed towards the seller.”
But properties were still worth significantly more than they were worth three years ago.
“It’s important to remember that while the Sunshine Coast is currently recording some of the highest value falls, it recorded some of the strongest value growth over the pandemic,” Ms Ezzy said.
“Fuelled by flexible working arrangements, strong interstate migration and record low interest rates, house and unit values rose by a whopping 53.5 per cent and 50.4 per cent, respectively.
“Despite the severity of the current downturn, it’s unlikely Sunshine Coast values will fall below their pre-COVID levels,” she said.
She expected the down-phase could continue but there were signs it was slowing.
“It’s likely property values will continue to decline as interest rates rise (but) once interest rates stabilise, we expect the housing market to find its floor.”
“The monthly rate of decline has started to ease, suggesting that we may have moved passed the peak rate of decline.
“However, it’s still early days, and any changes to the outlook for interest rates or the labour market could see the pace of decline re-accelerate.”
Real estate agents in the region have still recorded some significant sales in recent months, particularly for luxury houses and apartments. Prime properties appear to be listed for longer and attract fewer interested parties but are ultimately still being sold at high prices.
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