The month in review: Gold Coast

By Herron Todd White
June, 2009

The middle segment of the market, say $450,000-$750,000 has softened in all areas on the Gold Coast in the past 12 months. The increase in the First Home Owners Grant (FHOG) has provided opportunities for former first home buyers to upgrade to their second property. The buoyant market conditions for properties say less than $400,000 is creating urgency from vendors looking to upgrade
their lifestyle to another level. This will come in the form of someone upgrading from a unit to a house or even a residential property to a rural residential property.

On the northern end of the Gold Coast suburbs such as Helensvale, Oxenford and Pacific Pines are benefitting from a marginal increase in activity generated by “second home buyers”. These suburbs are all established residential areas with a good selection of schools and are all also close to the Westfield regional shopping centre located at Helensvale. The increase in market activity in these areas began late 2008 with agents now reporting improving levels of enquiry in excess of $450,000.

Properties typically in demand are 1-3 year old homes with very little work to be done.

There are signs that Runaway Bay at the northern end of the Gold Coast is seeing an increase in activity for waterfront villas/duplexes at the $500,000-$600,000 price point. Buyers are now seeing value for money for these duplexes given something worth $625,000 in early
2008 can now be purchased for $550,000. Also duplexes do not have the body corporate burden of a larger home unit or townhouse complex.

The central areas of Ashmore and Benowa have not been as affected by the slowing market as much as some of the outerlying areas. There has been an increase in buyer enquiry in these areas for properties in excess of $500,000, however, this is not being translated to
increases in market values. Demand and supply in these areas is balanced and the market levels are expected to plateau in the next 6 months.

Mermaid Waters on the southern end of the Gold Coast has seen an increase in market activity in recent months. Buyer enquiry for renovated or part renovated houses on dry allotments in the $600,000-$750,000 has increased. These properties have softened in value in the past 12 months to a level that buyers now feel comfortable with.

Similar to the more central areas on the Gold Coast market values are not increasing but have now levelled. The areas discussed herein all have similar characteristics. They are close to good quality local infrastructure. Buyers can now see value for money in these established areas and are preparred to upgrade to their second or third home. Their motivation for upgrading is being tempered by activity in the first home buyer market but also by the current low interest rate environment. Whilst all of these areas saw a decrease in market values in the last 12 months, market values now appear to have levelled at this mid level price point. It is expected that values will
continue at their current level. Factors which will dictate a movement in values are obviously the end of the increase in the FHOG (December 31 2009) and general local and national economic influences.

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © 2008 Smartline Home Loans P/L. ABN 38 085 370 270