The month in review: Gold Coast
By Herron Todd White
The general feeling on the Gold Coast is that the residential market will steadily build momentum throughout 2015 after a fairly strong 2014. In 2014 we saw a significant increase in market activity as well as an increase in value levels in most market segments. We can only hope that interest rates do not increase significantly this year.
Looking at the southern Gold Coast, the strongest performing properties are houses in well located suburbs such as Burleigh, Palm Beach and Miami in the under $700,000 price range as well as duplex units (with no body corporate fees) priced under $500,000. These properties are expected to perform above average throughout 2015. Detached houses in the under $500,000 price bracket in other suburbs such as Tugun, Bilinga and Elanora should also perform well in 2015.
In the Tweed, Casuarina is a suburb worth following in 2015. The area has seen a significant increase in construction over the past 12 months, with many more houses to be built this year. Land values have improved considerably over the past 12 months and it will be interesting to see how the values of houses fare once the majority of land has been sold and built on. Construction on the Casuarina Town Centre is due to commence any day now and we believe this will be a major draw card for the area.
Units with high body corporate fees are the main area of concern on the southern Gold Coast.
The suburbs to watch in the central areas of the Gold Coast include Broadbeach Waters, Mermaid Beach, Mermaid Waters and Robina. We have seen circa 15% growth in some of these areas in 2014, especially
entry level waterfront houses in Broadbeach Waters. This growth has been fuelled by new infrastructure such as the light rail system, extensive renovations to the Pacific Fair Shopping Centre and the buzzing café and bar precinct under the Oracle building in Broadbeach. In Robina the schools, university, train line, stadium and shopping centre are attracting young families. We believe that detached houses in the $500,000 to $800,000 price bracket will perform well in 2015 as many buyers will be looking to upgrade from their previous houses.
The main area of concern is the new development (off the plan) unit market. This market is typically sold to investors from out of town and often does not retain its value on re-sale.
With the flood of new developments on the Gold Coast, there could be an oversupply in the near future.
Looking to the northern parts of the Gold Coast, Biggera Waters and Runaway Bay through to Hollywell are the hot spot growth areas for 2015.
These areas are well located and developers are now looking for in fill options in these established areas where land values will soar over time. The main draw card is the proximity to the Broadwater. This area provides a good standard of amenities including schools, recreation facilities and substantial retail precincts, and is within relatively easy proximity of the Southport CBD, Gold Coast Hospital and access to the north and south bound M1 motorway and electric rail. The suburbs cover a large geographical area with mainly dry, semi-modern single unit dwellings constructed between 1980 and 2000.
These properties are complemented by being situated amongst some of the best canal estates and canal housing of the Gold Coast. The streets are generally wide and leafy with level topography and very easy traffic flow. Allotments typically range between 500 and 800 square metres providing ideal young middle class family environments. These areas are mainly detached dwelling suburbs with some duplex units and even fewer unit developments. We see the best advantage in detached dwellings for lifestyle and predict better capital growth in this market segment.
We would be cautious about some of the lesser quality, developing estates in Coomera and Pimpama.
These areas are seeing large volumes of cheaper stock being sold to investors, many of whom come from interstate and appear to be paying a premium for new product. We are also seeing very small lot sizes in these areas, some as small as 250 square metres. This product is relatively untested with little to no re-sales to edify how this style of product will be viewed by the local market.
Out to the west, the newly released stages in the suburbs of Yarrabilba and Flagstone (Jimboomba) are priced under $400,000 for a house and land package, and represent good value for all sectors of the market. As the estates of Flagstone and Yarrabilba age, purchasers have the choice of buying land and building or purchasing a one to four year old home that is fully established for similar price points. Both estates have options for less than $400,000 total outlay. Alternatively, the entry price for a 4,000 square metre property with an older house is a similar cost within the established areas of Jimboomba. This property type offers good value for money and the opportunity to add value.
Investment properties are always an area of caution and while the majority of suburbs within the Scenic Rim are not investment driven, there are a number of investment sales within the new estates. With a decrease in lot size and sale prices remaining the same, these sectors of the market are untested and in the short term should be treated with caution.