July Market Outlook
CoreLogic National housing Update July 2017
7 Factors That Influence a Home Buyer’s Decision by CoreLogic
Stamp duty and first home owner grant changes in effect across Australia
The difference between owner-occupier and investment interest rates
Adelaide July 2017
Brisbane July 2017
Cairns July 2017
Canberra July 2017
Darwin July 2017
Gold Coast July 2017
Melbourne July 2017
Newcastle July 2017
Perth July 2017
Regional NSW July 2017
Regional NT July 2017
Regional QLD July 2017
Regional VIC July 2017
South West WA July 2017
Sydney July 2017
Tasmania July 2017
Wollongong July 2017
CoreLogic QLD housing Update July 2017
CoreLogic SA housing Update July 2017
CoreLogic VIC housing Update July 2017
CoreLogic WA housing Update July 2017
Should you rent out your home on Airbnb?
How to calculate the cost of buying a home in Australia
Mortgage myth buster: things you need to know about mortgages
Gold Coast July 2017
The month in review: Gold Coast
By Herron Todd White
North-western Gold Coast/southern Logan region
Whilst coastal suburbs such as Runaway Bay, Broadbeach, Palm Beach and Bilinga are performing increasingly well in the current climate and are the more desired locations, at the half a million price point, investors and specifically first home buyers are having to move into the more affordable, secondary locations of the northern corridor out to the western suburbs of Holmview, Yarrabilba and Jimboomba.
Evidence suggests that the resale market generally under performs in comparison to off the plan transactions, which is why if given $500,000 to invest in real estate, the advice would be to purchase an established dwelling or duplex in Upper Coomera. There have been some very strong duplex sales over the past four to six months with high rental figures being achieved and it is still on the Gold Coast (albeit at the very northern end).
However, in saying that, if a brand new dwelling is desired, then the off the plan house and land packages being offered in Jimboomba’s Flagstone Estate are particularly affordable at present making for a savvy investment choice. This estate is being targeted predominantly towards owner occupiers, with an array of community facilities as well as significant infrastructure being built over the next 10 to 15 years, thereby directly increasing property values in this estate.
Northern corridor east of the M1
Similar to the north-western Gold Coast / southern Logan region, the resale market for new investment house and land packages as well as townhouse units historically has not performed well in the investment sector due to the over inflated prices. Construction of these investor heavy estates continues with the danger of an oversupply in rental properties on the market becoming a possibility if rental demand does not increase in line with supply. Rents for a typical 4-bedroom, 2-bathroom dwelling have remained stagnant at circa $420 per week on an unfurnished basis.
The estates with a high ratio of owner-occupiers to investors have performed well over the past year. Gainsborough Greens in Pimpama for example has seen strong demand for both land and completed dwellings continue to push up prices gradually. For $500,000 a purchaser could buy 400 square metres of land and build a basic 4-bedroom, 2-bathroom DLUG dwelling. With construction of the Coomera Town Centre Shopping Centre underway in addition to infrastructure expenditure on schools and road upgrades, these superior estates in Coomera and Pimpama could see increases in value.
As per last year’s advice, if looking to invest, definitely look at the more central Gold Coast areas in close proximity to the beach.
Gold Coast west
With $500,000 to spend, the suburbs of Carrara, Nerang and Oxenford are well worth consideration. At circa $500,000 one can purchase a 3- or 4-bedroom, 1- or 2-bathroom dwelling with covered car accommodation on a 500 to 800 square metre residential allotment. Most homes in this price point will be circa 15 years old and in reasonably close proximity to amenities, public transport and the M1 which further underpins their value. Canungra and Beaudesert each have new estates generally comprising lots of 600 to 800 square metres at a sub $225,000 price point therefore leaving a reasonable amount for the dwelling and ancillaries. These estates are proving popular with first and second home buyers given their proximity to amenities and the Gold Coast and Brisbane.
Rental returns for properties in Carrara, Nerang and Oxenford continue to attract investors as local agents continue to report a tight rental market. Although lending to investors has contracted, these areas continue to be in demand. Values in these areas are expected to increase over the long term although not acutely. Whilst last year local agents were reporting a shortage of listings, this does not currently appear to be the case.
It is expected that under current market conditions, the above property types will continue to hold their values. If or when interest rates rise, property values may weaken potentially reducing price point entry by 5% to 10%.
Last year’s predictions performed per expectation with investor numbers further softening. With the Commonwealth Games due in 2018 and sentiment high, it is reasonable to expect some easing post the games.
Gold Coast South/Tweed Shire
There has been continued growth this year in the southern Gold Coast and Tweed Shire areas, from the lower end of the market to the upper end. There has been a solid level of capital growth for most but not all properties in most locations. Accordingly, it is getting more difficult to purchase an investment property in the under $500,000 price bracket, particularly houses.
Therefore the best strategy for investing $500,000 would be a duplex style unit (with minimal body corporate fees) in areas such as Miami, Burleigh Waters, Palm Beach or Varsity Lakes. The rental vacancy rate in these areas remains very low. It seems that rental prices are still rising reinforcing the argument that it is not too late to invest in this type of property.
Further south in areas such as Currumbin Waters, Elanora, Tugun, Coolangatta and Tweed Heads, there are still some limited opportunities to purchase housing in the under $500,000 price bracket. However, the type of property available in this price range would likely be in a secondary location, be of a substantial age or in need of repairs, which would negatively impact on rental price achievable and the bottom line.
Note: With regard to the Property Clocks, these are general and vary between locations and property types.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.