QLD MARKET OVERVIEW
QUEENSLAND
QLD Market Overview with Louisa Blennerhassett
Reflecting on 2022, what were some of the prevailing trends that you noticed and how did they play out in the market? 2022 was a unique year, certainly beyond what anyone expected when we first encountered Covid in early 2020. The Sunshine Coast was already one of the fastest growing regions in Australia. Our region had benefited from an incredibly strong infrastructure spend, providing us with a couple of key employment drivers. Notably, the Sunshine Coast University Hospital was completed in 2017. It was the first new public teaching hospital in Australia in 20 years, with a project cost of $1.8b. We also are privileged to have Australia’s largest greenfield CBD under construction in Maroochydore, with Walker Corporation delivering the 53ha site over the next 15-20 years. Our growth was fast-tracked over 2021 and 2022, with the Sunshine Coast benefitting from incredibly strong interstate migration. Our idyllic lifestyle and ‘work from home’ location became one of the most sought after regions for newcomers from, predominantly, Sydney and Melbourne. Compared with the southern states, our residential real estate was still affordable which, combined with historically low
interest rates, created an intensely strong 2022 market, both in residential and commercial sectors. As a result, by the end of 2022 we had an office vacancy rate of less than 5% with almost nil vacancy in A-grade buildings. Our industrial land pricing had almost doubled in some areas within a few short years. Development sites were being sold at record prices every week and investors were driving yields to record lows. Marketwise, what are you forecasting in 2023 and how will increased lending costs impact the various markets? Everybody knew the boom couldn’t last forever. Increasing interest rates have had a strong, sharp impact on the commercial market. In particular, the owner-occupier market has dropped off dramatically, with tighter lending conditions and higher rates putting ownership out of reach for a large number of small businesses. On the flip side, we are seeing stronger leasing activity and enquiry across all sectors, particularly industrial. The Sunshine Coast has a severe land shortage for both residential and commercial sectors. This has softened the blow considerably, with development sites still in demand across the region.
LOUISA BLENNERHASSETT Director - CBRE Sunshine Coast
70 –March / April 2023
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