Anyone who has lived on the Sunshine Coast over the past few years would have seen fluctuating rental demand cycles. After the global financial crisis in 2008, many local businesses closed their doors, and a lack of employment opportunities and nightlife failed to keep the young working class population on the Coast, and as a result, rental demand waned.
But today Mal Cayley, Managing Director of Investor Property says rental demand on the Sunshine Coast is one of the highest in Australia, with vacancies in many areas under 1 per cent and an overall rate of 1.5 per cent across the region as of October 2016. Combined with favourable interest rates, and significant infrastructure investment, this is seeing people flocking to the region and due to the increase of jobs there is currently an undersupply of rental properties.
“These factors have led to an environment where investors would have once, typically, negatively geared their properties in the hope of achieving growth, they now, given the demand, have the opportunity for both a strong yield and capital growth with some cash flow positive properties,” says Cayley.
Areas which are seeing the highest rental demand include Maroochydore CBD and the hospital precinct around Kawana and Oceanside.
“Never before have we seen such widespread infrastructure investment into this area,” he adds, referring to major projects such as a new central business district at Maroochydore, dubbed SunCentral, with a vision for a hi-tech commercial centre of 65,000 square metres of office space and 2000 apartments; multiple new multi billion dollar land estates such as the construction of the first homes in Stockland’s Aura project which began last month; an airport expansion and the opening of the Sunshine Coast University Hospital, one of the largest medical precincts in the southern hemisphere which is due to open in April 2017.
Cayley says there is an expectation with a minimum 5% yield with some properties getting 6% or more.
He says with the Sunshine Coast having at least $10 billion in job creation infrastructure under way, he can only see the trend of strong rental demand continuing.
“It would not be any exaggeration to say, there has never been a better time to invest on the Sunshine Coast,” he says.