Mainstream media seems to be pushing the idea that the housing market is in chaos for everybody – both buyers and vendors. However, that’s not really the case, especially if you’re on the Sunshine Coast. With people flocking to Queensland from the southern states in droves, there may actually be more stability in the Sunshine Coast market than anywhere else.
Figures from Corelogic show that houses are staying on the market more than twice as long as this time last year. In June 2021 houses only stayed on the market for 13 days, but that figure has now increased to 27.
This may indicate that there are more houses on the market versus buyers, a situation that usually forces property prices down. Interestingly, though, Sunshine Coast house prices have risen 6.4% in the first half of 2022.
A lot of this is due to the area itself being somewhat insulated from the national property market. This can somewhat be attributed to the fact that so many people want to live on the Sunshine Coast.
The Sunshine Coast appeal
While house prices may be tipped to fall in many major cities, the Sunshine Coast is a different market. Back in 2017, there was a big upturn in house prices, especially in major centres like Sydney and Melbourne. Back then, Sunshine Coast prices didn’t rise as much. That means property prices are still reasonable on the Coast.
This has led to many people cashing out of Sydney and Melbourne while house prices are high, and moving to the Sunshine Coast. Around 46,000 people migrated to Queensland last year alone. This creates a high demand for housing, somewhat protecting the region from drastic market fluctuations.
So, while house prices have risen on the Sunshine Coast recently, they’re still attractive in comparison with other large cities.
The interest rates question
Firstly, if you’re looking at buying a home in the current environment, you do need to be aware of the proposed interest rate hikes. Due to rising inflation, the Reserve Bank of Australia has already started lifting interest rates. According to them, there are more increases on the way. This means if you take a variable rate home loan today, the monthly repayments could be quite a bit higher in the future.
Traditionally, when interest rates go up, house prices go down. Some experts have tipped that a 2% interest rate rise could lead to house prices going down by 15%. Let’s look at some examples here to give this some context.
If you bought a home for $800,000 today, your interest rates are still reasonably low. In two years time, you could buy the same house and it might be significantly cheaper, let’s say $700,000. However, your interest rates will be higher.
The point of highlighting the interest rates issue is to demonstrate that while caution is always advised, there is usually a balance. While house prices are high, interest rates are low and you can pay your mortgage down faster. If house prices are lower, you may not need to borrow as much but your monthly repayments may not be much different.
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