All that glitters on the Strip is golden

The Gold Coast mar­ket has hit re­cov­ery mode, but look fur­ther than the beach, writes Michael Ma­tusik

The Courier-Mail - Property - - REALESTATE NEWS -

THE Gold Coast – 57km of stun­ning coast­line bor­dered by lush hin­ter­land – and a ris­ing de­mand for prop­erty.

But it’s not those beach­front, lux­ury, top-end prop­er­ties that will be on the radar.

The emerg­ing shape of the Gold Coast sug­gests that more-af­ford­able stock, likely away from the beach, is what will be needed.

Our mar­ket out­look re­port shows that the Goldie qui­etly en­tered a re­cov­ery ear­lier this year.

It’s a re­cov­ery that fol­lowed a mar­ket cor­rec­tion and a long stag­na­tion pe­riod and it’s likely to be milder than in the past.

Also, it is likely to be short in du­ra­tion.

We ex­pect the mar­ket to peak in early-2016, de­pend­ing on in­ter­est rates, em­ploy­ment trends and dwelling sup­ply.

The Gold Coast had over­heated in terms of prices and rents.

Prop­erty val­ues had been driven up 165 per cent over a seven-year pe­riod up through 2008.

This time around, val­ues are ex­pected to lift, but mildly in com­par­i­son.

Our work sug­gests that house val­ues could rise by another 9 per cent over this re­cov­ery and at­tached prop­erty val­ues by as much as 11 per cent.

This takes into ac­count the cur­rent low in­ter­est rate set­ting.

A grow­ing pop­u­la­tion is one of the fac­tors be­hind the im­prov­ing health of the Gold Coast prop­erty mar­ket.

The al­ready high rate of pop­u­la­tion growth – much of which is im­ported from in­ter­state and over­seas – is ex­pected to ac­cel­er­ate in the fu­ture.

Another fac­tor is the Gold Coast’s rel­a­tively young de­mo­graphic pro­file.

The strong­est de­mand over the next 10 years will em­anate from this sec­tor – young renters and first-home buy­ers.

This will fuel a need for more af­ford­able prop­erty – town­houses and one and two-bed­room apart­ments – in low to mid-rise apart­ments, and mostly away from the beach.

The down­siz­ing mar­ket is also quite large in the Gold Coast en­vi­rons and this mar­ket, too, will drive de­mand for smaller dwellings at af­ford­able prices.

In­vestors would be wise to buy prop­erty priced largely un­der $400,000 for sec­ond-hand stock, and un­der $500,000 for new apart­ments and house and land.

Prop­erty at these price points should be met with strong rental de­mand and should at­tract owner-res­i­dent buyer in­ter­est at pre­sale.

A grow­ing need for more res­i­den­tial con­struc­tion on the Gold Coast should fur­ther help to in­crease em­ploy­ment.

Those look­ing to buy should con­sider prop­erty in or within close prox­im­ity to the Gold Coast’s ma­jor em­ploy­ment nodes.

These in­clude Robina/Var­sity Lakes and South­port/Benowa.

With prices set to in­crease over the next 12-24 months, and rents ris­ing, now ap­pears to be a good time to pur­chase an in­vest­ment prop­erty on the Gold Coast.

There are some bar­gains to be had. But in­vestors need to buy af­ford­able, main­stream rental prop­erty, not life­style-ori­en­tated stock.

The city’s fu­ture looks strong in terms of grow­ing de­mand for prop­erty in the re­gion.

What will be needed are more jobs and in­come on the Gold Coast to shore up price growth along with ris­ing de­mand.

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