The month in review: Gold Coast
By Herron Todd White
Central Gold Coast
Looking at the year ahead, we believe that we should see solid growth throughout all property types on the central Gold Coast. This is driven by the limited stock and the migration of interstate buyers moving here to buy our ‘cheap’ property. There have been a large amount buyers from Sydney and Melbourne moving up after selling their property for a premium, they see the Gold Coast as cheap compared to their hometown e.g. the ability to buy a waterfront home for under $1 million in suburbs like Carrara and Mermaid Waters.
The properties worth watching are the ones surrounding new developments like the Pacific Fair Shopping Centre, Jupiters Casino, Benowa/Royal Pines Shopping Centre. The properties around these locations are set to see growth. Like the Isle of Capri local shopping centre increasing values of the houses around the development.
Properties that seem comparatively affordable are houses in the western central area (Nerang, Carrara and Highland Park). These suburbs are still considered affordable compared to other houses on the Gold Coast, the main problem now is finding the stock to fill the demand. It is quite common for properties to sell within one week of being listed after receiving multiple offers.
New developer stock has been selling quickly with a lot of international demand; the area that has been the hottest is Robina with most of the developers almost sold out of their current stock. New developer unit stock should be treated with caution as they are often sold at pumped up investor price levels; these sale prices are often not sustainable on resale.
We believe the strong performance in the residential sectors will be sustainable over the coming year as the demand is extremely strong on the Gold Coast.
Also the increase in tourist numbers to the Gold Coast with the Australian dollar at a low point. The investment units along the coastline should see increased returns for the year.
More buildings are coming out of the ground than we have seen in years between Southport and Hope Island. These areas are proving popular with overseas buyers as there are many options to purchase properties through the FIRB but there is also a lot of local purchaser and interstate action about.
Local selling agents are still to this day reporting very short marketing periods with multiple offers and offers above asking prices for a portion of properties, more-so in the established central localities of Ashmore and Southport. Vacant land values have continued to rise with resales occurring (some within 12 to 18 months of purchase from the developer) at higher sale prices.
We are also seeing the ease of the sale of developer stock in medium to highrise units in areas such as Southport and Biggera Waters (near Harbour Town) where the sale price meets market, likely due to feasibility studies and planning having been done in weaker market conditions. Unit values for older stock that are not well located or do not have much of an outlook have not seen the value increase that the rest of the market has enjoyed and with more units set to rise, it is not likely to help the matter any time soon.
We are still seeing more and more first home buyers and investors purchasing duplex units as these seem to be the solution to unaffordable housing for people who would still like to be centrally located, however, not be subjected to costly body corporate levies.
There has been evidence to prove values have increased in areas such as Parkwood where the G:Link trams run, and with talk of plans to extend that to Helensvale train station we consider Helensvale to be an area to look out for.
Northern Gold Coast and southern Logan
Generally, the prediction for 2016 within the northern Gold Coast and southern Logan residential property market is a return to stability from previous years. In late 2014 through to 2015 the northern Gold Coast and southern Logan residential market witnessed the return of the investor, increasing demand for new and existing product while decreasing the market supply. Prior to late 2014 the overall feel of the northern Gold Coast and southern Logan residential market was slow with an uncertainty lurking from the past. The return of the investor put this uncertainty to bed fuelling demand and in turn allowing developers to increase supply.
As the northern Gold Coast and southern Logan residential market represents a large area, we will firstly focus on the northern Gold Coast residential market. The main driver of this area is the growth corridor spanning from Oxenford to Ormeau. In 2016 this area is one to watch, the area is continuing to see supply of vacant allotments within new estates and existing estates that have begun expanding. To meet the expansion of the growth corridor new services and amenities are under construction in Coomera following the upgrade of infrastructure. The main driver of this area is the investor; we note that a high percentage of demand is from local, interstate and international investors, relying on a strong rental market to ensure a good return on investment. If the rental market maintains stable growth we should see a prolonged stability for the area excluding external economic factors that could reduce investment.
The southern Logan residential market has seen a revival since late 2014. A contributor to this is the planned redevelopment of the Beenleigh CBD and a new Planning Scheme in place to encourage growth. Yarrabilba has continued to be the leading residential estate for the area enticing investment from locals, interstate and international parties. The area is expecting the finalisation of a local shopping centre and a local tavern in 2016. In 2015 Yarrabilba saw the opening of a childcare centre and petrol station, although not the most exciting developments, the focus should be on the future of this estate and things to come in the near future.
It won’t be all sunshine and rainbows for the northern Gold Coast and southern Logan residential property market in 2016 with the potential of an oversupply of townhouse and unit developer stock in the region. The Beenleigh CBD and associated planning scheme has made it easier for the developer to develop medium density residential developments that are generally at the upper or above market parameters in comparison to resales of units in Beenleigh and surrounding suburbs. Pimpama and Coomera have also seen an increase in the townhouse and unit developer stock that are also considered at the upper end or above market parameters in comparison with resales. This is considered a risk for the northern Gold Coast and southern Logan residential property market and should be approached with caution.
Southern Gold Coast and Tweed Coast
We believe the stage is set for a reasonable 2016 for a majority of property types on the southern Gold Coast and within the Tweed Shire. However, the world economy has shown signs of global volatility.
The suburbs to watch this year would include suburbs within proximity to the beach and new infrastructure such as Palm Beach, Elanora, Kingscliff, Casuarina etc. The suburbs listed above should perform on the back of new infrastructure such as $136 million residential development of the caravan park at Palm Beach by Sunland and the construction of the $25 million Coles Casuarina retail hub.
The areas that seem comparatively affordable would be Currumbin Waters, Tugun, Varsity Lakes, Tweed Heads South and Tweed Heads West. The product to be treated with caution would be new developer stock which is often sold to interstate or internal buyers above market value. However, this product can often represent good value upon resale should the vendor be quitting the property.