The month in review: Gold Coast
By Herron Todd White
Central Gold Coast
The central Gold Coast suburbs have largely performed as expected during 2016.
Established housing under $1 million has remained in strong demand from both owner-occupiers and investors. Most areas gained in value throughout the year however the improvement in value levels weakened slightly toward the end of the year.
Most central Gold Coast suburbs have produced average to good gains, however a lack of stock in some suburbs may be pushing buyers into paying a premium that may prove problematic in the event of a correction in the market. Buyers are being pressured into paying top dollar for properties which would normally be overlooked or rated poorly or considered to be of secondary quality.
Recent examples of this include: McDivitt Court, Worongary. Sold for $455,000 which was $15,000 above list price as a result of very strong buyer interest. Issue: This property is impacted by major high voltage electricity transmission lines.
Rio Vista Boulevard, Broadbeach Waters. Sold for $795,000 and had previously sold two years ago for $685,000. A very modest sized rental property on a canal. This could be considered an entry level price now for canal front property in this area. Issue: The property is located on a busy local road and would be a costly renovation project.
The lesson to be learned from these examples is that buyers in this current market need to keep their heads and not be persuaded to purchase poorer quality property out of desperation. Good quality property will sell well in most markets whilst poor quality property will be punished in a falling market.
The unit market has not performed as well as the market for detached housing. There have been some gains however the dominance of investment property in the unit market has meant that the supply constraints that have underpinned the market for detached houses have not been felt as keenly in the unit market.
There have been no nasty surprises for buyers or sellers in the central Gold Coast suburbs. The federal election came and went without causing too much concern and interest rates have stayed agreeably low in line with the expectations of most economists and the broader market.
Overall in 2016, central-western Gold Coast suburbs are in a stable market and continue to perform well. Suburbs which would be considered generally central such as Nerang and Carrara are still seeing increased sale prices, primarily as a result of the low interest rates which have continued throughout the year and the increasingly common occurrence of low required deposits (i.e. less than 5%). RP Data shows an increase of 16.2% and 8.9% in median house pricing from January to November for Nerang and Carrara respectively. The volume of sales has decreased however which is due to a lack of stock. Most agents who consistently work these areas are all reporting low stock, with properties appropriately priced selling within 14 days of being listed on the market.
Pacific Pines is also seeing continued sale price increases. The unit market, primarily townhouse and villas, within the affordable price range has been highly sought after with agents also reporting low stock and short selling periods. A trophy sale for the suburb would be 12 Barrington Street which comprises a 5-bedroom, 3-bathroom two storey dwelling on an elevated 725 square metre north-west facing allotment with wide ranging district views to the east. The dwelling has high quality fixtures, fittings and features and sold for $900,000 after 27 days on the market.
Land is still strongly sought after which is being reflected in the increased prices for vacant allotments. Riverstone Crossing located in Maudsland continues to perform well with its latest stage of vacant allotments ranging from 460 to 690 square metres and selling for $258,000 to $298,000. A recent nine lot subdivision of a 3.65 hectare property in Nerang with allotments ranging from 4,350 to 10,050 square metres has had three settled sales and another three under contract with prices ranging from $494,990 to $720,000. Further west, the new land development Canungra Rise at Canungra has also been highly sought after with 800 square metre vacant allotments selling for $200,000 to $240,000 to local (Gold Coast) buyers.
Premiums are still being paid for new stock and to a lesser extent renovated properties that present well or like new.
The increase in development activity within Pacific Pines, Maudsland, Oxenford and Upper Coomera has also seen a slight increase in construction costs, however this increase seems to be in line with the market and purchasers are willing to pay these premiums.
As per our predictions in early 2016, Nerang, Carrara and Highland Park have continued to perform for the same reasons – being appropriately priced and lack of stock. Our prediction of the strong performance in the residential sectors being sustainable has come to fruition as prices continue to increase following the high demand.
Northern Gold Coast
During 2016, the northern Gold Coast and southern Logan markets were generally stable. The southern Logan residential market has seen a revival since late 2014. More projects were released in 2016, such as Brookhaven by Fraser Properties, Tallagandra Heights by Choice Homes and Tilbury Residences. This showed that developers regained their confidence in the northern Gold Coast and southern Logan markets.
However in Yarrabilba, we have seen a large number of properties available for rent. This is due to the heavy construction of dwellings for the investment housing market. Some property managers are offering rent free periods and other forms of incentives to attract tenants.
Upper Coomera has also seen an increase in townhouse product (such as Reserve Court and Tilbury Residences) that are also considered at the upper end or above market parameters in comparison with resales.
As per our prediction in early 2016, the Ormeau Hills market has been strong so far due to the growth corridor. Land prices in Ormeau Ridge are currently considered at the upper end or above market parameters, for example lot 778 Beaufort Crescent, a 448 square metre block, is under contract for $268,900. There is no similar sized block sold at this price point.
Overall, in 2016 there are no surprises that would impact the market in northern Gold Coast and southern Logan. Everything is basically within our predictions of early this year.
Southern Gold Coast and Tweed Coast
There has been a continued improvement in this property market throughout 2016. Some suburbs and types of property have seen strong levels of improvement, whilst other suburbs and less desirable property have only seen minor to moderate levels of improvement.
Without the benefit of statistical data, the strongest performers in terms of suburbs have been Burleigh Heads, Burleigh Waters, Palm Beach, Tugun, Kingscliff and Casuarina. In these suburbs, the strongest performers have been housing in the under $850,000 price bracket close to the beach or on the waterfront.
Generally speaking, there have been no weak performers throughout 2016, including outer lying suburbs where sales have traditionally been at slower rates. All the suburbs from Pottsville to Miami and Reedy Creek to Murwillumbah and all types of property from 1-bedroom units to prestige dwellings and units have seen improvement.
The main factors that appear to be driving the market include low interest rates and an overall strong local economy with high levels of construction as we head towards the Commonwealth Games.
Looking back on our predictions from early 2016, we were very close to the mark. It was a good time to buy in early 2016 compared to late 2016. Demand remains strong with limited stock.
Some examples of recent sales include:
• 48 Skyline Terrace, Burleigh Heads has just sold for $850,000 (GCS323873), previously valued in March 2013 at $690,000.
• 2/27 24th Avenue, Palm Beach is under contract for $525000, previously sold December 2012 for $359,000.
• 4/17 Teemangum Street, Tugun just valued for $410,000, previously sold September 2013 for $345,000 with some renovations completed.
• 15 Boambee Court, Reedy Creek just sold for $805,000, previously sold January 2014 for $730,000.
Find out more information and to chat with a local Gold Coast Mortgage Broker.