By Herron Todd White
Gold Coast Central Property Updates
First home buyers are typically priced out of the stand-alone housing market for the Gold Coast’s central localities within two kilometres of the beach. With a non-western front renovator in Mermaid Waters generally starting at around $700,000, this market appeals more to the second or third home buyer looking to secure a good position close to the beach and facilities.
Typically in this suburb, house buyers are upgrading with some equity behind them or downsizing from a higher-priced waterfront home, ditching the mortgage but still benefiting from the lifestyle amenity of the central location.
Currently, prices are generally stable with purchasers either looking to renovate and flip for a quick profit as there is a steady local demand for recently renovated, just move in, nothing to do type houses. This is evidenced on the Isle of Capri, a residential locality within the suburb of Surfers Paradise, with recent sales for non-waterfront properties at stronger price levels. This locality has benefited from gentrification in recent years with the local shopping centre, Capri on Via Roma, being completely revamped and remodelled within the past few years and the tram line within walking distance.
An example is 5 Saint Andrews Avenue, Isle of Capri which transacted in August 2019 for $1.84 million to a local buyer. This is a brand new, however nonwaterfront house. Built-in 2019, the dwelling is an architect-designed, contemporary, two-level, four-bedroom plus study or bedroom, four-bathroom dwelling with rendered masonry, fibro cement sheet walls, skillion metal roof and double car garage. It features a high standard quality fit out, two-level void over the living room, catwalk hallway, polished timber flooring, timber bi-fold doors, ducted air conditioning, wine room, inground swimming pool and established landscaping. The land area is 539 square metres. The site was previously sold with an older dwelling for $890,000 in March 2018.
First home buyers in these central localities are mainly confined to the unit market with agents reporting that affordability is the main driver. $400,000 is generally the price point cut off and body corporate fees are a significant factor. First home buyers are also competing with investors who also factor in likely achievable rental income with outgoings including body corporate fees.
The first home buyer generally must look for a house in the more outlying suburbs such as Carrara where it’s possible to get a semi-modern three-bedroom duplex unit for circa $400,000. House prices start around the mid $400,000s for a three-bedroom house.
Mudgeeraba has seen increased townhouse and unit development within recent years with product increasingly including four bedrooms or three bedrooms plus a study or bedroom which is appealing to investors and first home buyer families alike. Mudgeeraba, located west of the M1, is also a sought-after locale for first home buyers. It has its own local shopping centre, schools and is within close proximity to Robina Town Centre.
Entry-level three-bedroom townhouses in Mudgeeraba start at around $315,000 for something built in the 1980s with a largely dated fit-out. Modern, circa 2018 built two-level townhouses providing four bedrooms, two bathrooms plus powder room with a single garage and single open carport are around $490,000.
A house in Mudgeeraba will set you back around $500,000 for a 1980s house generally in dated condition but offers a good entry point for those upgrading from a townhouse or those with a larger deposit who can afford to enter the market in a freehold property.
Gold Coast North-East Property Updates
In the Gold Coast north-east area, from Southport to Hope Island and out to the M1, buyer profiles have changed along with the changing market conditions. As the Gold Coast north-east is an established area, the typical buyer profile currently comprises first time buyers, upgraders and investors.
Coming into the back end of 2019, we saw an increase in market confidence that resulted in an increase in buyer activity for established dwellings in areas such as Helensvale, Runaway Bay, Labrador, Southport, Arundel, Molendinar and Parkwood. This buyer activity was shared between first home buyers, downsizers and upgraders, with investors slowly returning to the market in late 2019 and early 2020. A lot of the activity has come in the middle to lower end of the dwelling market, being sub-$800,000, which has traditionally seen a higher turnover of stock due to the affordability range for all buyer profiles. Whilst there hasn’t been any noticeable increase in values in the areas over the past 12 months, due to the May election and the banking Royal Commission, there has been a number of opportunistic buyers who believe the market has bottomed. As mentioned, people renovating to sell are slowly re-entering the market, however, profit margins are tight. For example, a small one-bedroom unit in Labrador was purchased in August 2019 for $175,000, renovated and then sold in February 2020 for $219,000. After taking into account the cost of the renovation, interest expense, stamp duty, legal fees, body corporate payments and agent’s fees, the net profit appears to be minimal.
In regard to the $800,000 plus end of the residential market, we are still seeing interstate investors buying property as an investment, with the reported intention of moving from Sydney and Melbourne to live in the future as they still see the Gold Coast as good value compared to their home states, however, they are competing against a slowly growing number of local upgraders looking for value.
We have noticed that downsizers are only a small portion of the market as people are choosing to stay in the family home for comfort, rather than move to high-density living. Conversations with downsizers indicate an initial shock due to the close proximity of neighbours, however, this is later tempered by the reduced level of maintenance, increased security and the ability to lock up the unit and travel. We do caution downsizers to take care of unit selection as units continue to perform poorly in the Gold Coast north-east region due to inflated off the plan purchase prices.
Overall, the start of 2020 has seen a lot more buyer activity with the value of sold properties appearing to be reasonable. This increase in buyer activity is a sign of increased demand, which in turn is expected to lead to a steady increase in values over time.
Gold Coast North/North-West Property Updates
The northern Gold Coast corridor and lower Logan corridors have seen rapid growth over the past ten years. This area is popular with local and interstate investors as well as owner-occupiers. There are a number of developing residential developments scattered throughout this area and you will find the typical home is owned by a mixture of first home buyers and young families.
When it comes to local buyers, common boxes they are looking to tick include proximity to public transport, shopping facilities, affordability and locations within good school catchment areas. This would explain why Upper Coomera and surrounds have experienced fairly consistent growth over the years. We noticed a subsidence in the market at the beginning of 2019, however during the second half of 2019 to now, this market demonstrated both an increase in demand and values. A property at 18 Aviation Drive, Upper Coomera comprises a neat, 14-year-old, modern style, four-bedroom, two-bathroom rendered brick and tile dwelling with double garage and transacted in January 2020 for $505,000. This showed strong growth from the previous sale of $468,000 in August 2018 with only solar panels and fencing upgrades to the property.
The lower-western Logan corridor originally comprised of mostly rural residential housing, however, over the past ten years we have seen average to good quality medium density housing developments begin to dominate a number of these suburbs. Some of the more significant developing residential estates include Flagstone, Yarrabilba, Brookhaven, Pebble Creek and Riverton. These new housing developments have caused significant change to these suburbs and have resulted in the construction of new infrastructure, schools and shopping facilities throughout the region. South Maclean is an established rural residential locality of circa 700 properties predominantly improved with semi-modern acreage homes. More recently, construction has begun on the medium density residential estate known as Pebble Creek. On completion, Pebble Creek will comprise 14 stages with a total of 650 small lots ranging between 280 and 500 square metres in addition to a large $3 million park. The project was released in late 2019 and at present 32 lots have sold with circa 90% sold to owner-occupiers. We have been advised that the majority of sales have been to local buyers, consisting of a mix of first home buyers, young families and retirees downsizing or coming off acreage. The previously sleepy rural residential town of South Maclean will soon double in population and provide its residents with a great outdoor area for families.
The combination of low-interest rates, government incentives and affordable house and land packages in these areas creates a perfect opportunity for first home buyers as well as families looking to make a switch from acreage lifestyle or even the city life.
Gold Coast West Property Updates
The western Gold Coast and Scenic Rim localities comprise a wide mix of demographic across a multitude of different property types. From established dwellings in residential estates close to the M1 to rural residential allotments in the hinterland and further out over the range, these market segments have proven to be popular choices for a variety of lifestyles.
On the back of lower interest rates coming into effect throughout 2019, the beginning of 2020 saw the federal government introduce a home loan deposit scheme with approved first home buyers requiring a five percent deposit but avoiding paying lender’s mortgage insurance. This has resulted in an increase in first home buyers in the western Gold Coast suburbs such as Nerang, Pacific Pines and Oxenford and further west in the established Scenic Rim suburb of Canungra. Generally, these buyers are seeking established dwellings, townhouses or duplexes in a range of conditions, some having the prospect of renovating. In particular, Nerang has seen a higher influx of these kinds of buyers due to its affordability as well as its proximity to amenities, schools and major transport routes. This has resulted in a large number of original style dwellings becoming refurbished in recent times to modern standards.
Tamborine Mountain has seen steady growth in the past year and is proving to be a popular locality with the demographic consisting mostly of families and retirees. In more recent times, we have seen a surge in property sales on the mountain with dual living configuration, offering owner-occupiers the potential for supplementary income from dwellings with attached or detached granny flats and secondary dwellings. With the suburb being a popular tourist destination, these types of dual accommodation properties are best suited for Airbnb style short term holiday rentals but can also offer permanent rentals which normally tend to attract students or young couples.
The Scenic Rim covers an expansive area to the west of the Gold Coast hinterland comprising mainly rural residential properties with the popular township of Beaudesert being centrally located. These properties are a lifestyle choice with the present demographic mostly consisting of middleaged men and women and also families who are looking for land to use as a hobby farm or for equine purposes. There is a mix of dwelling types on these properties with the majority being older Queenslander style homes, however as more families are moving into these regional areas, we are seeing a larger amount of new modern dwellings being built and this will continue over the short to medium term. The suburb of Beaudesert is an area to keep an eye on with property prices increasing in recent months and growth expected to continue.
Gold Coast South/Tweed Region (Johnno) Property Updates
The Gold Coast south region has a wide range of typical buyers. First home buyers are generally found in suburbs such as Varsity Lakes and Robina. Upgraders are generally found in Palm Beach, Tugun and Currumbin where the price levels are higher and houses are larger. Families are generally located within Robina, Varsity Lakes and Palm Beach which are all located close to great amenities. Retirees and downsizers are mainly found in Miami and Palm Beach.
The main changes happening in this area is that many of the rundown or original homes are being purchased by young people who renovate and then put the home on the market to be purchased by families who do not wish to do renovation works. The houses are being bought from retirees and downsizers who then generally purchase new unit stock along the coastline. This puts pressure on first home buyers as prices have increased and it is very hard to enter the market in the majority of suburbs except for one-bedroom units, or two- and three-bedroom units and townhouses. Areas such as Varsity Lakes have been de-commissioned which has seen the purchase of ex-commission housing for renovation and on-sale for good profit which makes the Mattocks and Varsity Lakes area a more sought-after location. Palm Beach and Elanora have also seen a massive re-gentrification over the past ten years. These suburbs were once not sought after at all and are now highly sought after.
The southern Gold Coast and northern New South Wales localities generally attract traditional families, retirees or young couples. Hardly any of the properties within the locality are co-owned between friends or comprise multi-generational living. House design is becoming more modern however the layout of homes is remaining pretty much the same as it has over the past five years. The tram is expected to go to the airport over the next ten years will be the biggest factor in this area, however, no other facilities or services have been established purely on societal gentrification.
Speak with a Gold Coast Mortgage Broker today.