The month in review: Gold Coast
By Herron Todd White
The coastal north section of the Gold Coast, which includes the CBD suburb of Southport, has continued to strengthen, however we are seeing fewer interstate purchasers on the contracts of sale when we look at data outside of new developments, which are primarily driven by interstate purchasers and overseas investors. People are still hyped up by the impending Commonwealth Games and what these might do for the Gold Coast and property prices. The Rapid Transit line has proven its worth among locals and certainly in Parkwood, near the new Gold Coast University Hospital and Commonwealth Games village and we know that the locals of Helensvale are getting excited about the tram to connect them to the coast and what this may do for values there.
Feedback we are receiving from agents is that the low interest rate environment has been encouraging more people to enter the market and extend their property portfolios. Land is hard to come by and in Southport we are beginning to see a new era of development with the local council recently approving a circa 620 square metre site for six micro-terrace houses which are freehold. There are still back-up contracts on houses, houses going under contract several times before the right buyer can gain finance and multiple offers being received however I believe now is the time it starts to really matter who you market your property with. The local agents, while all so vastly different, all say the same thing… “if only I had 20 of these to sell”. Houses and duplexes are definitely still the most sought after however we have noticed a stabilisation of duplex values and consider that a large portion of the growth has already occurred.
Northern Growth Corridor
Suburbs in the northern growth corridor such as Pimpama, Coomera, Ormeau and Ormeau Hills have experienced varying degrees of price growth over the past 18 months with detached dwellings and duplex units being the predominant type of housing in these areas. Resales for vacant allotments have strengthened during 2016 with known increases from previous sales. The primary market drivers at present are interstate and overseas buyers purchasing off the plan and new vacant land allotments or house and land packages. The northern growth corridor is supported by surrounding developments and infrastructure increasing amenities, proximity to transport, shopping centres and the Pacific Highway. Owner occupiers are also present with predominant buyers being first home buyers taking advantage of the construction grant incentives offered for new housing.
Local agents who actively market duplex units in the northern growth corridor advise of good market conditions currently prevailing for new and modern duplex units priced below $400,000. Importantly, the firming in the established housing market has had the effect of increasing demand for duplex units, particularly for first home buyers who are being increasingly priced out of the detached housing market. Low interest rates have also increased investor activity with local agents reporting strong demand for rental properties in the northern growth corridor also contributing to driving the market upwards. Rentals for detached housing in the above mentioned suburbs generally range between $410 and $550 per week depending on size and condition. Properties that have been recently completed, updated or have swimming pools generally achieve the upper end of market rent. Duplex units weekly rent generally range between $320 and $400 and are predominantly in Pimpama. Dwellings typically comprise of 3- to 4-bedrooms, 2-bathrooms and double lock up garage and duplex units typically comprise of 3-bedrooms, 2-bathrooms and single or double lock up garage.
Southern Gold Coast/Northern New South Wales
The overall property market on the southern Gold Coast and Tweed Coast is presently strong in particular in beachside suburbs such as Miami, Burleigh Heads, Palm Beach, Kingscliff and Casuarina.
An example of the improving market is 10 Cylinders Drive, Kingscliff. A vacant 650 square metre allotment situated in the Seaside estate. The allotment sold in February 2016 for $825,000. The allotment previously sold in 2007 for $690,000.
Another example of an established property is 8 Amboina Avenue, Palm Beach. A renovated, single level, older style, timber, 4-bedroom, 2-bathroom, dwelling with metal roof and 2-car attached carport with a land area of 506 square metres. The property sold in April 2016 for $700,000. The property previously sold in 2013 for $575,000.
The primary demand drivers at present are local owner-occupiers and interstate investors. We also note a strengthening local economy, low interest rates and a population influx into the above mentioned areas are driving the property market upwards.
Right now, you can lock in the cheapest money you have ever been able to borrow.
Central Western Gold Coast
The property market west of the M1 highway starts at Nerang/Carrara and extends through to the southern Logan and Scenic Rim council regional areas such as Beaudesert and Jimboomba. Two primary demand drivers within the M1 West region are affordability and planned infrastructure. The current record low interest rates available and low vacancy rates provide an attractive environment for first home owners, owner occupiers and investors. The overheated property markets in Sydney and Melbourne are providing demand for Gold Coast property from these interstate investors which see good value in suburbs such as Nerang, Carrara and Highland Park. An example is the Paradise Waters town house complex at 102 Alexander Drive, Highland Park. In February two townhouse units were purchased by separate New South Wales investors. The townhouses each comprise a circa 1995, part two level, 3-bedroom, 2-bathroom unit with 1-car garage, including approximately 110 square metres of living area. Unit 46 was purchased in February for $264,000 and unit 2 was also purchased in February for $272,000.
The current market rent is approximately $350 to $360 per week which provides a potential gross yield of 7.1% for unit 46 and 6.9% for unit 2. Agents who are active within the suburbs of Nerang, Highland Park and Carrara advise of short marketing periods and a shortage of stock for affordably priced properties including established housing, duplexes, townhouses and villas.
New infrastructure projects can boost the local economy by creating new jobs and attracting more people to a precinct. An example is the Bromelton interstate rail freight terminal, located just outside Beaudesert township and within the Bromelton State Development Area. This $30 million interstate rail freight centre will provide industries with access to interstate markets via the Sydney to Brisbane rail corridor and is set to commence in January 2017. This project is estimated to create 125 jobs in construction and 1,000 jobs to the area once the project is complete. Another planned infrastructure project is the recently approved $27.5 million Beaudesert Bypass, estimated to create 18,000 jobs. These planned infrastructure projects have attracted residential development with a number of developments in the pipeline to the region. An example is the 339 hectare master planned community known as Oakland Estate. This development will include a mix of residential, retail, commercial, education and lifestyle amenities. Earthworks on the $1 billion project has started and lots are expected to be ready to sell at the end of the year. These planned infrastructure projects within Beaudesert are expected to have a positive effect on demand in the long term for the region. The 2018 Commonwealth Games has included a number of infrastructure projects. Carrara will benefit from the $122 million Carrara Sports Precinct redevelopment, currently in the process of construction, which will host the opening and closing ceremonies for the games. Although it is hard to see the immediate effect of these planned infrastructure projects associated with the Commonwealth Games to the local property market, they are expected to have a positive effect on demand in the long term as we move closer to 2018.