Published 11:09a.m. 28th March 2008

| Mark Furler and AAP

Updated 3:18p.m. 28th March 2008

One of the Sunshine Coast's biggest agencies has recorded sales of $20 million this month - it's second biggest ever - amid predictions the region's property market could surge by more than 30% in the next five years.

Brett Graham, principal of Ray White Maroochydore, said his office had written 44 sales since the start of the month with the month only being exceeded by September last year.

Mr Graham was commenting after one of the nation's leading economic forecasters, BIS Shrapnel, predicted property prices would grow by up to 40% nationally, including on the Coast.

Mr Graham said his sales team believed the Coast market would have another major peak in 2011/2012 which he said would be greater than the rise the market enjoyed last year. The last peak was in 2003.

He said if interest rates increased this year, the market increase may not be as great but agreed with suggestions by BIS Shrapnel that there could be a bigger increase as more investors came into the market next year.

He said he believed increases of 25% would be achieved over the next five years.

Real Estate Institute of Queensland Sunshine Coast chair Jean Hamer told thedaily.com.au that the Coast real estate market had risen on average by 10% a year and doubled in value every seven to 10 years.

Ms Hamer said while some vendors had to bring prices down to be more realistic, the Coast had enjoyed consistent growth, unlike places like Sydney and the Gold Coast.

She said at present quite a lot of people moving to the Coast were renting to start with to get a feel for the market but they would come into play as they sought a home of their own.

And she said she had particularly noticed a lot of people from the UK moving here, often bringing their extended family with them.

She predicted the migration of baby boomers would only increase, putting further demand on housing and increasing prices.

BIS Shrapnel director and chief economist Frank Gelber said housing affordability, already at record lows, would sink even lower as demand continued to outstrip supply.

Mr Gelber said nationally there was a construction shortfall of 30,000 dwellings, but has forecast that number would grow to 60,000 by June this year and 129,000 midway through 2009.

An environment of rising interest rates had compounded the problem with people choosing to wait before buying or building property, he said.

This also meant that when interest rates stopped rising or eventually started to fall, there would likely be a surge in demand for housing which could result in a price explosion.

“We’ve got rising interest rates suppressing any upswing in demand for housing ... and we need to wait now before that demand comes through,” Mr Gelber said.

“But when it does, it will be very strong.”

Angie Zigomanis, senior analyst - residential property, told thedaily.com.au that the Sunshine Coast could expect to see price growth of 30% to 40% because of the large number of people moving here and the insufficient numbers of houses being built.

"You have got very strong population growth,'' Mr Zigomanis said.

"There is a lot of demand pressure building up now.''

He said he expected more investors would move back into the market next year after the two more interest rate increases expected in 2008.

Rising rental rentals would help to entice them back, together with the fact that the stockmarket has been so volatile.

Mr Zigomanis said once that happened the Coast could expect to see another surge in home prices in the second half of the next five years.

Meanwhile, Colliers International research shows foreign property buyers spent $11.12 million on Caloundra residential real estate in the 2006-07 financial year.

This equated to 27 property transactions.

The figure is up from the $6.76 million (19 transactions) foreign spend in the 2005-06 financial year.

The prediction of a property price surge follows controversy after one Coast agent predicted prices could drop by as much as 30%, sparking a backlash from the real estate industry.

This week, a property analyst has calculated that only 4% of housing on the Sunshine Coast is now affordable to locals, compared with 75% six years ago.

The figures quoted by Mr Gelber and Mr Zigomanis are largely in line with Australian Bureau of Statistics data.

Calculations, based on the ABS established house price index, show that during the 10 years to December 2007, house prices rose an average of 9.9 per cent a year. The index rose 12.3 per cent in 2007.

In the 10 years before that house prices rose an average six per cent a year.

In the past 20 years they have risen an average 7.9 per cent a year. - AAP