By Herron Todd White
It seems to be a mixed market at the halfway score within the Gold Coast, northern New South Wales, Scenic Rim and Southern Logan regions. The feedback from agents and volume of sales paints different pictures depending on the locality and looking at the various regions, it is evident that each locality offers something different. Overall, the underlying theme is that the market was cooling its heels in the lead up to the election and will more than likely continue to do so in the coming months.
Central Gold Coast Property Updates
Most agents are reporting a softening in buyer enquiry and demand across the board throughout this locality, with all reporting some softening in value levels and longer sale periods often required to achieve a sale. It is definitely a buyer’s market and they are more discerning with their choices and in no rush to sign up to buy.
One leading agent has just this week reported a general drop of circa 10% for Bundall and Sorrento from the generally accepted top of the market in late 2017. This was evidenced in a top end sale where the purchasers had submitted an offer at $4.5 million less than eight months ago and have just gone to contract at $4.1 million on the same property.
The local market is well aware of the downward trend in the southern cousins of Melbourne and Sydney, however, there appears to be a general consensus that local value levels here didn’t skyrocket like our southern counterparts and as such, any market correction here is likely to be much more gradual and gentle in nature.
The unit investment market in the beachside suburbs of Surfers, Broadbeach, Mermaid Beach and, to a lesser extent, Main Beach was negatively impacted by tighter bank lending restrictions, including the reduction of interest only loans and the banks’ requirements to convert to a principal and interest loan upon expiry of the interest only loan term. This resulted in serviceability issues for a number of investors and we saw this translate to vendors accepting contracts below previous sales within the building. The foreign investor market slowed as Chinese investors now seem to have disappeared from the market.
The prestige residential market up to circa $2 million was still ticking over albeit at a slower pace compared to standard residential housing within the central precincts.
Dry block or non-waterfront houses transacted steadily with some softening in price levels. This market sector was mainly driven by local buyers.
Moving slightly out of the central locality, a recent sale of a proposed vacant lot in Tallai (to be subdivided off an existing larger site) and comprising 4,238 square metres of near level vacant rural residential land sold to a local buyer for the asking price of $600,000. The agent reported the buyer had been looking for circa 12 months and this fitted their needs. Other vacant sites available for sale all had issues either with sloping contour, flood or in close proximity to high voltage power lines. This sale indicates that the market for good quality, well located vacant land is generating good buyer enquiry and strong prices. This sale is one of many occurring on the Gold Coast where local purchasers are seeking specific properties and are willing to pay more for a property that satisfies their requirements.
Southern Gold Coast and Tweed Coast Property Updates
The southern Gold Coast and Tweed Coast localities held up quite well in the easing or falling market.
As with the central Gold Coast, there is a lack of urgency from buyers and properties must be competitively priced in the current market. Selling agents are reporting that there are a number of unrealistic vendors and that they are considering not taking on listings for these properties. Properties located close to the coastline and priced under $1.5 million have been less impacted by the current easing market along with duplex units and townhouse and villa units with low body corporate fees.
Properties priced above $1.5 million generated significantly less activity with agents who reported decreased interest and less sales compared to 12 months ago. On the opposite side of the coin, there was very limited demand from investors in the market, predominantly due to uncertainty around the election. Accordingly, units in complexes where buyers are mainly investors were difficult to sell and there has been a significant drop in value levels.
There was a recent sale of a 1-bedroom unit at Varsity Lakes for $252,000. Comparable sales in the previous six months generally ranged between $260,000 and $280,000 and the selling agent advised that there was very limited enquiry. This unit previously sold in June 2015 for $255,000 and the original developer sale was in March 2007 for $349,500.
Gold Coast West Property Updates
Recent months have seen some uncertainty creep into the market for residential property in the western suburbs of the Gold Coast such as Nerang, Oxenford, Pacific Pines and Gilston. While talk of the market downturn in the southern capitals increased anxiety amongst some buyers and sellers, it was somewhat surprising that value levels and selling periods, whilst softening in these areas, were relatively resilient in spite of the media hype.
The market in these outer urbanized areas is somewhat split between investors and owner-occupiers. In line with the broader market, investor activity has slowed in some of the townhouse and unit developments which has opened the door for first home buyers, however high body corporate costs are a restricting factor for some buyers.
Property values for detached housing across most price points remained stable in the first half of the year. Some vendors’ price expectations appear a little unrealistic leading to lengthy selling periods, however, a vendor with a reasonable asking price and a properly presented house should be assured of good interest and quick sale. Research is the key and this sentiment is echoed amongst all regions.
Gold Coast Hinterland and Scenic Rim Property Updates
New house and land packages on suburban lots in developing estates around Beaudesert have been dominated by investors in recent years and this sector of the market on the Scenic Rim has slowed in contrast to the owner-occupier market. Resales of houses in these estates are lower than the cost of the new house and land package indicating a price difference between new and second hand in these localities and a difference between what investors and owner-occupiers are prepared to pay for the same product.
In contrast, locations in the Scenic Rim and Gold Coast hinterland that are dominated by owner-occupiers are proving very resilient in the face of negative media reports about the property market. Rural residential housing and housing in some village locations such as Canungra and Tamborine Mountain remain in good demand from buyers. Selling periods are relatively short and many properties are still selling at or around asking price. Some of these areas are commuting distance from Brisbane and Gold Coast and buyers get more bang for their buck in these areas compared to their city neighbours as well as offering certain lifestyle features.
Overall, buyers, sellers and agents appear to be keeping a cool head and while now is not the time to panic, it would be prudent to fully research the market in these localities prior to committing to a property. Unlike the heated market of previous years, there are no time pressures about making a decision to buy, no fear of missing out eating away at people’s thoughts, so as we move toward a buyer’s market, purchasers are able to take the time to thoroughly inspect properties, do the research and shop around.
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DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.