Picture this – you’re not that familiar with the Australian property market and one day you decide to do a quick search on Google and some news sites to see what’s happening. If you’ve jumped online in the past week or so, no doubt you’re imagining the bottom is falling out of the market and Australian property prices are headed for a nosedive. But you’d be wrong.
Unfortunately, it’s usually just Sydney and Melbourne markets that grab the headlines, and while things look pretty wobbly in those markets, on the Sunshine Coast, the sky is most certainly not falling in.
Just take a look at the latest figures from the Real Estate Institute of Queensland’s latest Market Monitor. The document outlines the state of play in Queensland’s various property markets, and it shows that most Queensland property markets are in good shape. It shows one important factor that many property commentators forget to point out – that each property market around the nation is very different to the next.
Michael Knights (pictured) from Horizon Property Alliance says, “If you’ve read a paper in the past six months, you’d be forgiven for thinking Australia’s property market is headed for Armageddon. [But] there is no such thing as a single Australian property market.
“Every state, every city and every suburb – right down to every street – has its own property cycle and great buying opportunities. Even different types of properties have their own cycles. Units, townhouses, houses, off-the-plan and land subdivisions all have their time in the sun and are on varying paths of price movement over a variety of timeframes.”
In Queensland, the property market spending the most time in the sun seems to be our own. According to the REIQ’s Market Monitor, the property market in the Sunshine Coast Statistical Division, which includes the Coast and Noosa, is the state’s best performer in terms of median house price growth.
“Overall, Queensland’s property market continues to operate at two speeds. The south-east corner is performing well, with the Sunshine Coast, Gold Coast, Brisbane and Toowoomba growing consistently,” says REIQ CEO Antonia Mercorella.
Whether the news you’re reading is good or bad, if you want to really understand a property market, look beyond the soundbites and simple stats. And while median prices can be helpful, they certainly need to be read in context.
This is something property analyst Michael Matusik advises investors often. He says no one should look at median price alone, whether those figures are going up or down.
“When you see a ‘hot list’ for detached house price growth, ask yourself how have the figures been influenced by newly constructed houses and/or recent renovation activity?” he advises. “Another important factor is survey size. If you are going to use median house prices as a benchmark, then you need to have many hundreds, but preferably thousands, of sales to ensure a meaningful sample.
“We only use large areas – like a total local authority area – when using median values. And only then as a broad indicator. Nothing beats detailed sampling, comparing like with like and focusing on individual resales.”
Mr Matusik warns against getting caught up in the hype.
“The thing to realise is markets move in cycles – always have and always will,” adds Mr Knights. “Property values rise and momentum runs in response to positive drivers – population growth, low interest rates, rising employment numbers, high overseas and interstate migration – myriad factors combine to interact and create demand that’s outstripping supply.
“Markets will eventually soften as demand dries up a little and values retreat in response. Bad media follows, confidence is zapped, and buyers leave the market, while sellers get nervous about achieving sales. Prices and supply will eventually find their bottom where buyers will once again start to take notice. It is a cycle and it is repeating regardless of what newspapers, radios or TV say.”