Gold Coast Property Market Update April 2020

Gold Coast Central Property Update

Up until the recent outbreak of the Coronavirus, it appeared that there was a sense of confidence in the local property market from both investors and owner-occupiers. Local agents had been reporting good levels of buyer enquiry for a broad range of residential property in the first couple months of 2020 which has been positive. This level of optimism can be attributed to the low interest rate environment and to some extent, the latest upturn in the Sydney and Melbourne housing markets. With some signs indicating these capital cities being on the bounce again, many buyers have been turning their attention to the central Gold Coast area due to the attractive price points. The key local drivers for this region include a wide array of lifestyle options, with good accessibility to amenities and greater job opportunities (compared with the quieter coastal and rural districts).

In light of recent events (Coronavirus and the subsequent stock market falls) it will become more apparent that buyers will be paying greater attention to national economic indicators but these buyers will also need to focus on local concerns. The central Gold Coast region is heavily reliant on the construction and tourism industries. These industries support a huge amount of the population for the area in terms of providing jobs and stability for the local economy. It will be interesting to see how these industries fare in the next few months and what impact it will bring on the local property market if the recent events continue to escalate.

Gold Coast North-East Property Update

Most investors appear to be acutely aware of the current interest rate and predictions of it being on the decline. This has put a positive slant on the local market. Another positive is the general optimism in the national economy, however this is now very fluid due to the Coronavirus pandemic, with some local agents reporting a fall in enquiries. A major factor on the Gold Coast is the perceived low values of properties compared to the capital cities such as Melbourne and Sydney and overseas markets.

A major local influence on the Gold Coast has always been proximity to water, whether beach, broadwater, river, lake or canal. Secondary location factors are proximity to the perceived better schools, commercial precincts and public transport corridors such as proximity to the new light rail or access to M1 motorway.

First home buyers are most influenced by budget and need for compromise. Many are buying small lowrise units in the older areas such as Southport or driven to the north-west corridor developing area. Upgraders are driven more by location (i.e. water locations). Empty nesters are usually seeking smaller dwellings in locations with good proximity to health services and established commercial precincts.

A major factor has been the oversupply of medium to high density housing such as modern medium rise apartments and townhouses. We have seen a dramatic decrease in demand for this type of property.

Gold Coast – North-West/Scenic Rim/Lower Logan Property Update

The market throughout this region covers a wide range, from older housing to brand new estates, with investors traditionally forming a large proportion of purchasers in this region across all categories. The record low interest rates have influenced buyers in this region, keeping purchasing activity steady. Record low rates inevitably correlates to higher debt levels as money gets cheaper. Some home owners have been unable to sustain payments at the higher debt levels and as a result, there have been more mortgagee in possession sales occurring in recent months.

Price point has always been the big lure to investors in this region with Sydney and Melbourne buyers able to buy several houses here for the same price as only one in their home towns. Rental returns have always been top of the list of attributes for interstate buyers with many older style properties achieving rental returns that are positively geared or very close to it. We have also seen a large rise in the dual occupancy market in new housing estates. Buyers can build a dual occupancy dwelling on a site larger than 400 square metres with most construction and land packages costing between $500,000 and $560,000 and achieving between $630 and $680 per week rent. When combining the calculation of these returns with the benefit to the investor in potential capital gains, they become quite an attractive offer. We are also seeing an oversupply of townhouses and low rise units in and around Beenleigh with new products seeing very large discounts on resale and some developers advising that it is difficult to build product and maintain profit.

Tweed Shire Property Update

The biggest driver for people buying in the Tweed region is lifestyle choice. Most buyers we are seeing across the shire are owner-occupiers or people purchasing a weekender. The region does not have a lot of local employment or major industry and it is becoming more common that people are relocating from Sydney, Melbourne, Brisbane and the Gold Coast and working from home or flying or driving during the week if need be to work in the cities. There are also people relocating from the Byron Shire to the Tweed Shire as affordability in the Byron Shire is at record high levels. This is particularly the case for the towns along the coast or rural residential properties east of Murwillumbah.

Price points are particularly strong in the coastal towns due to lack of stock available. This in turn is pushing up property prices and even with all the doom and gloom of the Coronavirus, agents are advising that demand is quite strong. It doesn’t seem to matter what type of property buyers are purchasing in the coastal towns; location is more important to buyers.

Speak with a Gold Coast Mortgage Broker today.