Saved by the south
downsizers desperate to escape COVIDravaged southern states are tipped to be the Gold Coast’s economic salvation, leading property figures say.
In time, the city will also seek refuge from big spenders from New Zealand, the US and Middle East.
The drop-off in the oncepromising Chinese market has left a gaping financial hole in the city’s future outlook and a significant number of undeveloped “bomb sites”.
Property kingpin Max Christmas said the downturn mirrored the devastation of the Japanese and Middle Eastern markets in the 1980s and 2000s, respectively.
“The Chinese bought plenty of the empty sites, but here we are years later and they are still empty despite all the applications to build,” he said.
“Particularly in the past 18 months, the restrictions on money going out of China has led to dramatic changes in the market and affected the Gold Coast in a significant manner, given the level of investment.”
The Gold Coast rode a wave of economic prosperity through the 1980s and the 1990s on the back of significant Japanese investment. It came to a crashing end with the 1997 Asian financial crisis.
In the years before the 2008-09 global financial crisis, the Gold Coast saw investors from the Middle East spend significant amounts of money on Coast property before selling it off.
With a number of prominent developments now stalled and international borders closed, one of the city’s leading developers says the next wave of investment will come from within Australia.
Mr Christmas said he expected more development in the next three years before overseas investors return.
“First it will be from Sydney and Melbourne. The congestion down there is terrible and I think you will see the financial situation will really knock them sideways within the next nine months,” he said.
“After that I think we will get people back from the Middle East as well as New Zealand and the US.”
Developer and business giant Norm Rix said the Chinese decline was significant, but he welcomed an increasing market of interstate downsizers.
“The Chinese were buying up quite a lot of property and they actually settled on most of the properties they negotiated on and signed contracts for,” he said.
“To a large extent this market has now disappeared, but I think it will be picked up largely by Australians who want to live on the Gold Coast.
“That market will go up, no doubt as a result of some of the incentives given by the Prime Minister. I think this market will be quite good for the future.”
Billionaire Leda boss Bob Ell is among the Gold Coast developers who have already indicated plans to begin construction. He plans to soon break ground on his Cobaki Lakes and Kings Forest projects in Tweed Heads.
The downsizer market was expanding before the pandemic, with developers such as the Sunland Group targeting new projects explicitly at the lucrative over-50s market.