Gold Coast

The Smartline Report – December Edition

The month in review: Gold Coast

By Herron Todd White
December 2015

A combination of factors such as a shortage of stock, new infrastructure (such as the success of the light rail) and significant evidence of new residential projects under construction has firmed buyer confidence within the local property market on the central Gold Coast. It has been a fairly positive year in terms of price growth across all price brackets.

The strongest performing sections of the property market in the northern corridor between Brisbane and the Gold Coast in 2015 were house and land packages and duplex units. Suburbs such as Ormeau Hills in which the Ormeau Ridge estate is located, and Pimpama in which Gainsborough Greens in located, have seen arguably the best growth throughout the year. These estates are favoured by owner-occupiers and have seen increases in value between 5% and 10% during 2015. Duplex units have also performed strongly with prices paid for new 3-bedroom, 2-bathroom, attached style duplex units in Pimpama increasing from low $300,000s at the start of the year to mid $300,000s.

Townhouse units continue to under perform single unit dwellings and duplex units with large discrepancies between developer sales and the subsequent resales of second hand property.

An example of this is Unit 21/20 Bedford Road, Pimpama which sold originally from the developer for $410,000 and resold for $340,000 on 22 January 2015.

The continued low interest rates combined with a gradually strengthening economy can be seen as underpinning the positive growth in both values and demand in this area.

The commencement of work on the Exit 54 upgrade and the proposed Coomera Town Centre Shopping Mall development have also furthered interest in the area. At the start of the year we cautioned against lesser quality house and land packages being sold to interstate and overseas investors at inflated rates. This continues to be a problem in this area with construction commencing on numerous new estates throughout the year. If rental demand does not meet the upcoming available stock then we could see an oversupply of extremely similar dwellings coming on to the market.

The central north area has been performing quite strongly with many agents reporting stock shortages, particularly in areas around the Broadwater, Southport and Ashmore.

Established dwellings between $500,000 and $700,000 in these areas have seen increases of around 5% and 10% since the start of the year. Furthermore residential sites in Labrador, Southport, Biggera Waters and Paradise Point with redevelopment potential are in demand.

Land values in waterfront suburbs have also strengthened particularly Runaway Bay. Sale numbers between $1,000,000 and $1,500,000 have virtually mirrored 2014, while land values have increased by approximately 15% to 20% in this time. Quality, renovated houses are achieving premium prices close to the peak levels of 2007/2008.

The most positive news for the central north zone has been the announcement of the second stage of the light rail which will connect to the heavy rail at Helensvale. There is a buzz around Helensvale as to the positive flow on effects for property and businesses.

New medium rise unit development around Harbour Town at Biggera Waters including the East Quays development and Waterpoint Residences have sold strongly to owner-occupiers and investors at prices typically from $450,000 to $650,000 for 2- and 3-bedroom configurations. The first stage of Waterpoint Residences is nearing completion and is around 80% sold out (as at November 2015). The development will contain six stages with over 600 units on completion.

From early in 2015 the sustained growth has been expected and predicted. All indicators remain positive from many areas and there is no shortage of buyers in the low interest rate environment from overseas and locally.

Residential housing in Broadbeach Waters and Mermaid Waters has remained highly sought after and there have been no signs of this market cooling off. There is also a growing trend in these two suburbs where many old dwellings have been purchased and knocked down for new duplex developments. Local agents have reported fairly strong demand for these new duplex units which is generally a good indicator that local market conditions are very buoyant at the moment.

As predicted in our Month in Review article published in February this year, the detached housing market in the $500,000 to $800,000 price range within the central areas of the Gold Coast has continued to be a strong performer.

To give an example of how hot the market is within Mermaid Waters, we are aware that 16 Firmin Court, Mermaid Waters sold under the hammer in August 2015 for $650,000 to a local purchaser. The property comprises an original, single storey, face brick, 3-bedroom, 2-bathroom dwelling with detached double garage on a 614 square metre allotment. The property requires a full renovation. It sold well above the agent’s expectations.

Both detached housing and townhouse and villa units in Robina have been in high demand from owneroccupiers and investors.

There have been good levels of demand for waterfront housing particularly under $1,500,000. Along with Broadbeach Waters and Mermaid Waters, we have seen fairly strong price growth for canal front and river front properties in localities such as Isle of Capri, Sorrento and Benowa. While there has been increased sales activity for prestige homes ($2,000,000 plus), buyers in this bracket are still quite discerning with more stock to choose from.

We note that 9 La Scala Court, Isle of Capri sold in July 2015 for $1,950,000. The property comprised a fully rebuilt and renovated single storey, lightweight clad, 4-bedroom, 3-bathroom dwelling with a 2-car attached carport. The property has a south-westerly aspect to the canal with approximately 18 metres of canal frontage appreciating local, canal and river views. Ancillary improvements included timber decking, pebblecrete in ground pool with tiled surroundings and frameless glass pool fencing. The land Area is 779 square metres. It previously sold in April 2014 for $1,035,000 in original and dated condition.

The highrise market within Surfers Paradise, Broadbeach and Main Beach is starting to gain some momentum, apart from fully serviced apartments. There appears to have been steady price growth for second hand unit product over the past 12 months. Many new high rise towers are currently under construction which is quite a contrast to two years ago. It will be interesting to gauge the level of foreign investment in these new towers over the next 18 months and whether prices for this stock will move in a positive direction.

As predicted back in February, market conditions on the southern Gold Coast in established areas such as Palm Beach, Miami and Burleigh Heads continued to strengthen throughout the course of 2015 with the majority of buyers being from the local area. While there is very limited land available in these fully established areas, prices for knock downs and fully original dwellings with limited added value to the property as a whole have risen by as much as 10% to 15% since the beginning of 2015, which was predicted in our February Month in Review.

Casuarina on the Tweed Coast also performed according to our predictions with very limited land available and a continued increase in demand for land. A good example of this (and a trophy sale) was 34 Dianella Drive, Casuarina, which is located within the Miramar estate (considered to be one of the inferior new residential estates in the area). This property sold from the developers in February 2015 for $385,900 which was considered a strong sale price at that time. The property was since sold in September 2015 for $480,000 to a local buyer. This represents almost a 20% increase in value in the space of seven months. The property sold within the first month of being offered, a common occurrence for most properties in the sub $750,000 bracket on the Tweed Coast and Southern Gold Coast throughout the later half of 2015.

There were no weak performers in the southern Gold Coast, however high rise units and rural residential markets have not strengthened to the same extent as the standard residential housing and land markets, however the overall market in both sectors has also improved.

There are a number of new projects which have recently been released or are to be released in the near future including the redevelopment of the old Palm Beach caravan park by Sunland and soon to be completed Casuarina Town Centre.

There have been no major surprises which impacted the market, with interest rates remaining very competitive. There is much more positive activity occurring with reduced selling periods, a higher number of buyers and more competition for properties offered for sale.

Slow and steady is winning the race in the Scenic Rim locality in 2015. Most markets showed improvement in interest levels and sales rates across 2015, however price point remains of most importance for vendors. Most sectors performed well in comparison to the previous 12 month period and when priced in line with the market, agents are reporting sales within a few days.

Yarrabilba continued to be the star performer with all lot types showing up to 15% price growth for land values through the year. Lend Lease reported up to 50 sales per month and attribute the strong second half of the year to the announcement of the commencement of major infrastructure within the community. The announcement of a full service Coles supermarket, independent Catholic school, Caltex service station and tavern has spurred interest from the local market now that these services and facilities are becoming tangible.

Established housing has shown nominal growth within the regional centres of Jimboomba and Beaudesert, however there appears to be less stock relative to the start of the year and the time on the market is considerably less.

One of the star performers within the Jimboomba to Beaudesert growth corridor is Cedar Vale and the new release of land within the Jimboomba Woods estate. At the start of 2014, a 4-bedroom, 2-bathroom house on a 4,000 square metre allotment was selling for around $440,000. The latest sale of a similar house on a similar size lot is $475,000. This price growth has been underpinned by limited land stock within the area and the finalisation of upgrades to the Mount Lindesay Highway. Moving to the north-east, QM Properties released their new acreage estate known as Jimboomba Woods and have steadily increased prices from around $210,000 for a 4,000 square metre allotment at the start of the year to around $245,000 more recently.

The rural residential and rural lifestyle sectors remained stable through the year, with buyers placing emphasis on proximity to services, value for money, infrastructure and usable land. Non prime property remained static on price growth compared with the previous year. There are a number of larger rural holdings within close proximity of regional centres that still represent good value for money and good lifestyle options with sale prices still below replacement cost of improvements. Steady as it goes for this market.

Looking back over 2015, the predictions made at the start of the year have panned out within the marketplace and the markets highlighted for growth have materialised. On a whole, this year we would rate our predictions a nine or ten out of ten!

www.smartline.com.au

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

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