A major Sunshine Coast developer has signalled the “end of the boom-time cycle” as the mad rush to buy a house undergoes a noticeable slowdown.
Avid general manager Bruce Harper said enquiries at its Queensland estates, which includes the fast-growing Harmony at Palmview, had experienced a shift in enquiry.
Mr Harper said demand was easing from owner-occupiers and there was growing interest from investors.
It comes as house prices on the Sunshine Coast experienced a dramatic 4.5 per cent decline.
Mr Harper said the property cycle had come to an inevitable stabilisation.
He said this was important for new home buyers who had been priced out of the market and pushed into an oversaturated rental market.
During the height of the boom, Harmony was forced to introduce a lottery system for land releases, as people queued outside the sales office to buy a block.
“The reality is, we have had a couple of years of exponential growth here in Southeast Queensland, and the nature of the property market is that it works cyclically,” Mr Harper said.
“Sales volumes for land over the last 12 months have been so strong that we will spend the next 12 months producing and settling the lots presold well ahead of production.
“Increasing interest rates and inflation levels have now brought about an important recalibration of the market and we can expect to see a return back to a more normal, segmented market.
“Many areas across Southeast Queensland will continue to perform strongly and see high levels of demand, but there will be areas that we can expect to see to ease.
“We know that buyers are still out there, and they are looking for liveability, mobility and access, so the areas and new developments that have that on offer will continue to sell stock, but we can expect to see buyers taking back more control in the market as we enter the spring selling season.”
- Related story: Residents to get long-awaited access to Bruce Highway
Mr Harper said the new phase of the property cycle was perfect timing for the current buyer market, which is being driven by Millennial first home buyers.
“We know from the recent ABS statistics that Millennials are our country’s largest generation, and they are the group moving into their first or second homes, and actively in the market,” he said.
“We’re seeing less competitive conditions for buyers just in time for spring, which typically is a popular selling time, and when home buyers can generally expect to see a lot more stock coming to the market.”
ABS figures showed Australia had seen the highest annual rate of inflation in June 2022 in almost 32 years.
“Rising interest rates and inflation have certainly pushed a segment of the market away,” he said.
“But there’s a big opportunity for those that have the capacity to start reentering the market and find something that will suit their lifestyle for the right price.
“Similarly, we are seeing the reemergence of investors on the hunt for positively geared investments.”
With rental vacancies well below one per cent across the State – a far cry from the healthy 2.5-3.5 per cent – Mr Harper predicted the investor market would drive property sales over the coming months.
“We are already seeing a significant rise in enquiries from investors not only locals but also strong interest from Sydney and Melbourne.
“We will continue to see a level of concern around interest rates and inflation for a few months yet, but demand and supply continue to be the cornerstone of the property market, and supply still remains a factor, but I believe we’re entering a phase of healthy buying conditions.”
