Coast in a trough, but railway towns enjoy the ride

Posted on 19/04/2007  

Residential prices on Queensland’s Sunshine Coast have been in a trough since early 2004. But the Sunshine Coast’s rapidly-developing commuter towns along the Brisbane-Nambour railway line have maintained a consistent level of sales (although below their September 2003 peak).

PRDnationwide’s regional Property Watch reports show that while results vary, most Sunshine Coast markets have followed the same trend – a sharp downturn in sales from March 2004 onwards and a continuing trough, apart from a spike in the September 2005 figures.
 
PRDnationwide’s “Golden Triangle Snapshot” shows house and unit prices slumped and sales volumes declined in two of the three coastal areas in Maroochy Shire over the six months to September 2006. Maroochydore recorded a 1.4% drop in median house price to $377,500, Alexandra Headlands showed no growth ($555,000), while Mooloolaba recorded a 6.9% gain to $467,500. Market activity in Maroochy Shire is in a two-year downturn, so in this context the result could be seen as relatively stable.

Two of the three coastal areas have also experienced a decline in median unit prices over the period September 05 to September 06.  Alexandra Headlands unit prices were down 8.8% to $310,000 and Mooloolaba prices were down 3.8% to $399,000. Maroochydore was left to hold the fort, with median unit prices up 3% to $329,500. PRDnationwide commented that the reduction in median unit prices could be traced to lower entry-price product in Alexandra Headland and Mooloolaba.

While Caloundra house price growth has outpaced the Sunshine Coast average over the last five years, prices have flattened - with the median price of $385,000 in September 2006 (only 0.9% higher than the September 2005 figure). The top three areas for price growth in the September 2006 half-year were Central Caloundra (up 6.9%), Little Mountain (up 4.8%) and Currimundi (up 4.2%).

PRDnationwide observed that Caloundra continues to offer a wide range of housing stock – from the modest two bedroom starter (selling for up to $299,000)  through to the 20% of sales which were in excess of $500,000. However, nearly half of this market falls into the $300,000 to $399,000 price bracket.

Caloundra’s unit market, which also outranked the Sunshine Coast average over the five years to September 2006, slowed in the September 2006 half-year, with soft sales volumes and a flattening of unit prices. The median price of $365,500 was 0.8% below the same period in 2005. The number of unit sales fell sharply in the September 2006 quarter, with only three of the 12 suburbs recording increases in sales activities, and then only marginal.
 
If there is one Sunshine Coast market that is holding up in the face of a regional downtrend, it is the eight hinterland villages dubbed the “railway towns”, each located close to the express passenger train service which ferries workers between towns along the track from Gympie to Brisbane.

PRDnationwide’s Property Watch identified the railway towns as the only Sunshine Coast market to be improving, both in terms of sales volumes and median prices. Land prices have experienced average annual growth of 25.2%, compared to the Sunshine Coast five-year average annual increase of 20.4%, with median land prices in September 2006 ranging from $145,000 (Landsborough) to $180,000 (Woombye).
 
Even with these increases, PRDnationwide said the railway towns precincts presented one of the most affordable options for broad hectare development land.

Median house prices, while still affordable by coast standards, have risen by an average 22.6% a year since 2001. In September 2006, median prices ranged from $330,000 (Beerwah) to $367,000 (Palmwoods). The average median house price for the railway towns in September 2001 was $130,000.

“The majority of rail precinct housing transacted during the 2000-2003 boom occurred between $100,000 and $199,000,” the report stated. “The last three years, however, has seen the majority of transactions gradually shift upwards to the $300,000 to $399,000 bracket.”

The latter price bracket accounted for 45% of sales in the September 2006 half year, while 20% of sales were in the $400,000 to $499,000 price range.

The State Government has designated Beerwah as a Major Activity Centre, with implications for employment and the town’s importance as a major service centre. (NOTE: Beerwah is a recommended hotspot in the Top 12 Queensland Hotspots report, available on this website).

A broad hectare study conducted by the State Government identified 307ha of land in Beerwah and 265ha in Landsborough suitable for future residential development within the next five to 10 years. Caloundra City Council’s 2005 program to connect sewerage infrastructure to the railway towns has helped to boost residential densities.

The “Tree Change” phenomenon, coupled with Queensland Rail’s plans for a rail upgrade to carve time off the Brisbane-Nambour journey, is expected to see a continued increase in both sales volumes and median prices in the ‘railway towns’ precincts.

ENDS

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