GC the place for returns

GOLD Coast suburbs are among the nation’s top markets for growth and returns as property insiders say there’s never been a better time for investors to make their move.

The Gold Coast Bulletin’s Make Your Move report, powered by Proptrack, shows the Sunshine State is Australia’s investment hotspot, home to 19 of the leading unit and 11 best-house markets, based on rental yields, demand and price growth.

Houses in Merrimac and Reedy Creek were picks for maximum return. Eight Gold Coast suburbs were among the top 20 nationally for units. They were Nerang, Arundel, Upper Coomera, Helensvale, Oxenford, Coomera, Merrimac and Elanora.

Ray White Surfers Paradise chair Andrew Bell said the state’s “acute housing shortage” had tipped the market in investors’ favour, with rental income higher than loan repayments and management costs.

“Investors are back in the game. In fact, I cannot think of a time where it’s been better for investors than right now,” Mr Bell said.

“Interest rates are still historically low, even at higher levels than earlier this year, and rents have risen so sharply that it is almost impossible for an investment property to be negatively geared.”

The data shows house prices in Merrimac jumped 38 per cent in the past year to a median of $910,000, delivering rental yield of 4.5 per cent to landlords. Houses in Reedy Creek brought yield of 4.2 per cent, as prices surged 40 per cent to $1.33m.

For units, top-ranked Nerang had price growth of 33 per cent to $465,000, with rental yield of 6 per cent. Arundel was close behind, with unit prices up 27 per cent to $492,000, and yield of 5.6 per cent.

Proptrack figures show rents were up 20 per cent on the Coast in the 12 months to June, while vacancies last month plunged to a new low of 0.6 per cent in Brisbane, according to SQM Research.

Proptrack economist Angus Moore said first-home buyers and others taking advantage of government incentives and cheap finance had snapped up a significant portion of stock from investors selling through 2020 and 2021.

“That dynamic is beginning to reverse – the investor share of new housing lending has picked up over the last 18 months after reaching its nadir in mid-2020,” Mr Moore said.

Gross rental yield was down but would recover over the next 12 to 18 months as house prices fell while rents continued to rise, he said.

Buyers agent Oliver Dunstan, of Rose and Jones, said southeast Queensland’s investment market was undergoing a “changing of the guard”.

“Investors that have been in the market are likely to trade out after experiencing terrific capital growth over the past 24 months, whilst new investors look to capitalise on the projected population boom and the infrastructure projects in the pipeline to support it,” Mr Dunstan said.

He advised seeking out areas where high-density housing would be limited in the future. “Investors should be parking their money in the most desirable pockets they can afford, in areas that offer higher barriers to entry for new development to lessen the risk of future competition in their marketplace.”

Mr Dunstan said properties between $400,000 to $1.5m were attracting strong interest, with entry-priced stock selling fastest.

Mr Bell said areas close to employment centres and educational facilities were good picks, as well as traditional beachside unit strips.

Jane Doogan, of LJ Hooker Nerang, said suburbs away from the beach tourist strip delivered consistent good returns through a stable market catering to long-term tenants.

“We don’t seem to fall prey to the extreme highs and lows,” Ms Doogan said.

“Even through the GFC, property prices in Nerang and Merrimac only dropped 10 per cent. The stability flows through to rentals, with not a lot of vacancies and investors achieving good capital gain.”

Ms Doogan said investment dollars had only just started to trickle back, with buyers now willing to explore areas they may not have previously considered.