Caloundra property: New research finds Sunshine Coast region ‘overvalued’

New research has found the Sunshine Coast housing market is losing its affordability amid mass migration from the cities to the coast.

House prices at the Sunshine Coast’s Caloundra have exploded by more than 90 per cent in a decade with researchers finding it one of the most overvalued regions in Queensland.

New research shows a housing affordability analysis found Caloundra’s median house price was overvalued, with prices 13.1 per cent higher than the local average household could afford.

The research from data-driven buyer’s agency InvestorKit looked at 25 regional areas with the largest populations outside of capital cities.

It found the majority of Queensland’s most populated regions were undervalued – with Caloundra an exception.

Head of research Arjun Paliwal said the research considered regional areas where there was mass migrations throughout 2021 as residents looked to move out of Australia’s capital cities.

“The great migration saw many Australians move to coastal areas and warmed climates like Queensland, in search of more attractive lifestyles, with Sydneysiders, in particular, moving to the sunshine state,” he said.

The research found Caloundra’s median house price increased by 93 per cent over the past 10 years.

New research found Caloundra’s median house price increased by more than 90 per cent over the past 10 years.

He said rental vacancy rates were also at crisis level.

Mr Paliwal said Caloundra’s median house price was 13 per cent higher than what the firm considered was affordable.

He said it would be overvalued by around 23 per cent if the home loan interest rate increases by one per cent.

“These figures show that the Sunshine Coast is losing its affordability due to the high demand being seen over the years,” Mr Paliwal said.

“With market pressure higher than a year ago, growth is expected to continue into 2022.”

The study analysed housing affordability through home loan serviceability – the ability to make repayments on a loan – combined with market pressure analysis.

It considered the difference between current median house price and the “affordable house price” across each capital city to determine if a market was unaffordable or “overvalued” or affordable and “undervalued”.

Affordable house prices were based on the average local dual income household rates and loan affordability of 30 per cent net income.

Maximum house prices of an affordable home loan repayment for a 3.5 per cent interest rate and potential interest rate hikes to 4.5 per cent were also considered.