The month in review: Gold Coast
By Herron Todd White
June, 2010
House/Land Estates
At the northern end of the coast, feedback from
developers and real estate agents is that most sales
activity in the local house and land estates i.e. Riverstone
Crossing and Highland Reserve, within the past month or
two has predominantly been from second homebuyers
from the local area. However, there have been a small
number of investors as well.
We have seen a small flurry of sale activity from domestic
investors residing in mining towns, particularly at Highland
Reserve, which offers more affordable opportunities. First
home buyer activity within this area has significantly
decreased and even stopped in some areas. Information
gathered from recent sales lists of new estates has
indicated that there has been limited investment from
foreign buyers also. Developers have pointed out that
their target market is second home buyers with families.
Acreage Housing
Also, in Tallebudgera and Currumbin Valley prestige
housing market it seems a majority of buyers are families
relocating from the closer Gold Coast residential suburbs
looking for space, privacy and a better family environment.
Many properties in the valleys are overpriced as the odd
emotional purchase does give vendors hope of a premium
price. Buyers are looking for value for money with most
purchasers looking for a well-presented, modern style
dwelling on useable land with good landscaping in the
lower $1 million price bracket. Over $1.5 million, the
market is thin.
Prestige Housing
Cashed up locals and interstate investors are in the box
seat - whether it be a beachfront house or penthouse,
riverfront mansion or country retreat. As many a high
profile vendor falls over, a quiet achiever steps in for the
bargain.
Most vendors of prestige property are praying for the
cashed up Sydney or Melbourne buyer looking to relocate
or a naïve overseas buyer to save them. In a few cases
this has happened, but for the most part not. Very few
sales occur at auction, although most occur in the days
following as the ‘conditioned vendor’ meets the market
with a thud.
New Lowrise Units
In the Robina low rise market the most active buyer
of new product is still the investor, however, at quite reduced levels of activity. Investors require a certain
return, which with higher interest rates and falling
rental prices has resulted in some developments taking
literally years to sell out. This has led to some developers
finding themselves in ‘mortgagee in possession’ position.
Buildings targeting owner-occupiers appear to have
faired better, as these units are generally larger, better
located and more liveable. There doesn’t appear to be a
new type of buyer emerging and the level of overseas
buyers in the area seems steady.
Prices of older style units in beachside suburbs such
as Tugun and Broadbeach have remained relatively
unchanged and in some instances have improved through
the global economic crisis. More recently (in the past two
to three months) local agents advise of a slow down in
sales enquiry and activity for this market segment and
a general decrease in investor sentiment due largely
to the scaling back of the first home owner grant, the
continuation of tight credit policy and increasing interest
rates.
Highrise Units
Most active buyers in the highrise Broadbeach market
under $500,000 are investors, in buildings such as Bel Air.
Over $500,000 there are limited investors and therefore
the market is very slow. The market has changed since
08/08 with less investors, as a cause of continued
nervousness and increasing interest rates. Also, most
building managers are reporting relatively low occupancy
levels which impacts on returns. The dominant buyer
demographic includes owner-occupiers and interstate
investors.
Conclusion
There is no- urgency to buy. The Gold Coast survives off
the back of tourism and development industries, each of
which is having more than a bad case of the flu.
Interest rate increases aimed at slowing Sydney,
Melbourne and Perth have severely dented confidence,
buyer enquiry, sales activity and the economy of the Gold
Coast.
Buyer sentiment seems to be ‘why buy when prices will
fall’ or ‘why buy when another property becomes available
next week or even next year, possibly mortgagee in
possession, at greatly reduced price and improved return
on outlay’.
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