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 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.