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7 key factors for strong residential growth in Coolum

Mosaic Property
Mosaic Property
24/09/19

A highly desirable location with an abundance of fantastic lifestyle offerings, Coolum is extremely well positioned to capitalise on the wider Sunshine Coast Region’s transition into a new phase of economic growth.

Boasting some of the most beautiful beaches in Australia, the Sunshine Coast is also one of Queensland’s strongest real estate markets, thanks to a massive $20 billion infrastructure pipeline of projects. The midway point along this stunning stretch of coastline, Coolum Beach is renowned for it’s series of sheltered bays and turquoise waters. Factoring in the recent economic growth and increased employment opportunities with the natural beauty that has made Coolum Beach a prime holiday destination in the past, and you have a strong incentive for population and residential growth from more people wanting to reside there permanently.

Here’s 7 key factors why Coolum Beach is experiencing strong residential growth:

1. It’s all about the location

Coolum’s central location ensures reasonable transit times to all major Sunshine Coast hubs and facilities. It is around 10 minutes drive from the Sunshine Coast Airport and 20 minutes from both the new Maroochydore commercial centre in the south and the Noosa Heads retail and entertainment precinct in the north. It is also conveniently located approximately 1.5 hours’ drive via the Bruce Highway from Brisbane.

With a long stretch of patrolled beach, several rocky headlands and protected coves, and substantial areas of bushland, Coolum provides residents an idyllic natural backdrop. The Sunshine Coast is one of Queensland’s strongest real estate markets, thanks to a massive $20 billion infrastructure pipeline of projects either completed, in the process or in planning phases. Whilst this central location provides convenience and additional lifestyle advantages for local residents, it also ensures that Coolum is ideally positioned to benefit from the infrastructure investment that is currently occurring across the entire Sunshine Coast Region.

2. A strong population growth

In the previous 10 years, the Coolum Region’s population grew by 49%. Based on medium series population projections from the Queensland Government, by 2026 the number of additional people is expected to increase by a further 11%. With the wider Sunshine Coast and Coolum Region transitioning to a new period of economic growth, it is logical to anticipate larger volumes of people will continue to be attracted to the area. Appealing lifestyle factors, coupled with employment opportunities generated through major infrastructure and tourism projects, will drive future population growth for the Coolum Region. Relative affordability compared to southern state cities such as Sydney and Melbourne will also magnify the regions desirability.

3. Residential values are growing

The Coolum Region has experienced strong price growth for both residential detached houses and attached dwellings (apartments and townhouses) over recent years. From the 2013/14 financial year, the average price for both attached and detached properties increased on an annual basis. It is interesting to note that over both the longer and shorter-term, attached dwellings in the Coolum Area have outperformed detached houses on an annual percentage return basis.

  • detached houses increased by a total value of $199,000 or 6.6% annually, now with an average price of $727,000, an increase of $24,000 on the previous financial year
  • attached dwellings increased by a total value of $180,000 or 10.1% annually, now with an average price of $472,000, an increase of $11,000 over the previous financial year.

This is most likely attributed to the fact that the new apartment supply is constrained in the Coolum Region. Given the obvious high-level demand drivers for apartment living, coupled with limited supply of this dwelling type, upward pressure on prices has been evident. This trend is expected to magnify in the future, especially for newer, higher quality beachfront apartments that will remain extremely rare well into the future, particularly given constraints on potential development sites.

4. Strong apartment resales activity

Very few apartment resales have occurred within the Coolum Region in recent times given the tightly held nature of the market. Resales of higher quality apartments have almost been nonexistent.

It is interesting to note that apartments of lower quality, condition and location have still achieved positive resale growth across both the short and longer-term. This evidence helps to substantiate the strength of the Coolum Region apartment market. Apartment resales researched were held for an average period of six years, during which they time achieved a total growth of $248,571 or an annual average growth of $54,217.

5. Positive apartment rental growth

Highlighting rental growth for 2- and 3-bedroom apartments located in the Coolum Region over the past two years, it is interesting to note that given the lack of new, higher-quality apartments delivered to the Coolum Region in recent times, median rents are primarily reflective of older, established dwellings of average to below-average quality and condition. Over the past two years, median weekly rents for 2- and 3-bedroom apartments in the Coolum Region have increased by 5.5%. The fact that older apartments of lower quality, condition and location still achieved positive rental growth confirms the investment potential of the Coolum Region apartment market.

6. Ongoing low supply combined with high demand

The new apartment supply in the Coolum Region is currently very constrained. Future apartment supply to the Coolum Region will also remain limited even if the residential apartment component of the Yaroomba Beach development comes to fruition in the future.

Simply put, only 201 attached dwellings were approved in the past two years; not all of which will be delivered to the market. Given that 2,142 attached dwellings existed in the Coolum Region in 2016, it becomes quickly evident that recent supply has not kept pace with historical demand. This creates an appealing supply and demand equation from an investment perspective and qualifies the strength of the opportunity that exists within the Coolum Region both now and into the future.

7. There’s major public and private infrastructure investment

The Sunshine Coast Airport expansion and Maroochydore CBD are just two major projects underway that will benefit the Coolum Region well into the future.

Maroochydore’s $300 million CBD is a new business district that will be built from the ground up, creating a thriving centre for commerce, technology, innovation, entertainment and inner-city living. The 53-hectare development will include commercial, retail, residential, civic and lifestyle precincts, as well as light rail and lakes and parks. A premium 250 room hotel/resort will be the most prominent feature of the site, complemented by entertainment, convention and exhibition facilities as well as residential and retail developments. About 40 per cent of the city centre will be dedicated to waterways and parkland, in keeping with the project’s green credentials and the region’s “outdoor” ethos.

The Sunshine Coast Airport expansion remains on target for completion by the end of 2020. The upgraded Sunshine Coast airport will deliver:

  • A new runway 2,450 metres long and 45 metres wide
  • $4.1 billion contribution to Gross Regional Product (2020 – 2040)
  • Potential to reach new destinations at home and abroad
  • 2,230 new full-time direct and indirect jobs by 2040
  • Potential to attract up to 2,000,000 passengers to the Sunshine Coast annually

 

Interested to learn more about investing in Coolum and the Sunshine Coast? Read more key investment statistics here: mosaicproperty.com.au/sunshine-coast/, scroll further down the page to read more property insights, or contact us to receive our full Coolum suburb profile.

* Please note; any reference made to the Coolum Region in this report typically includes the suburbs of Coolum Beach, Peregian Beach, Peregian Springs, Mount Coolum, Yaroomba and Marcus Beach. Please view our disclaimer for more information on Mosaic Research.