Gold Coast June 2018

The month in review: Gold Coast

By Herron Todd White
June 2018

After a dull period of market activity during the Commonwealth Games, most agents have reported that buyer enquiry across the central areas of the Gold Coast has now generally improved to a steady level. Despite the volume of sales activity dropping over the past twelve months in most areas, it has been reported that some suburbs are still performing quite well, particularly within the Varsity Lakes and Mermaid Waters areas. They have attributed the positive levels of buyer enquiry in these suburbs to a shortage of good quality stock in central areas and asking prices being more affordable in comparison to neighbouring suburbs.

Agents who specialise in the Surfers Paradise and Broadbeach areas have noted that they are still receiving steady levels of enquiry for listed stock, particularly up to $500,000. A good slice of their enquiries are buyers from south of the border (New South Wales and Victoria) which demonstrates that interstate investors still see good value for money opportunities in this market segment.

However, it is becoming more apparent that agents are finding it tougher to get a quick sale for unit stock priced between $500,000 and $1.5 million. If the apartment is not reasonably priced from the get-go, feedback has indicated that it will likely sit on the market for an extended period. There are many new medium to high rise developments under construction between Mermaid Beach and Surfers Paradise at the moment. It will be interesting to see if this will create a huge oversupply in the near future.

We have received mixed feedback in relation to how the waterfront home market has performed in the past month. Broadbeach Waters, which has been one of the more sought after suburbs in recent years, still appears to be one of the better performing locations. Entry level waterfront property (priced between $800,000 and $1.1 million) is still moving rather quickly.

Selling waterfront properties priced above $1.5 million is becoming far more challenging for some agents. More recently we have noticed a significant decrease in sales volumes and market activity, particularly in Clear Island Waters and Benowa in this segment of the market.

With what has occurred so far this year in the Gold Coast property market, we expect the second half of 2018 to remain stable. Whilst we don’t expect sales volumes to increase any time soon, steady levels of demand and a lack of listed stock will likely continue in most central suburbs. An unexpected rate rise in the next six months however would definitely make things very interesting.

Southern Gold Coast and Northern NSW

Overall, the market within the southern areas of the Gold Coast has slowed and there is an obvious decrease in listings and longer selling periods in the northern New South Wales areas. The southern Gold Coast is still achieving good prices with similar selling periods to post Commonwealth Games. Owner-occupiers have realised that there was no Commonwealth Games bubble and prices have not increased substantially.

The established housing market is still selling well as long as vendors are realistic in their expectations. This is evident across the southern Gold Coast and northern New South Wales localities. There is a price differential with premiums paid for properties within close proximity to the beach and transport hubs, with a noticeable decline in sale prices achieved the further the property is from these services.

The unit market in this locality remains very strong as investors are still active and rental returns are good. It is anticipated that this demand will continue to remain steady for the remainder of 2018 as long as vendors continue to be realistic and willing to negotiate to achieve a sale.

Northern Gold Coast and Southern Logan

Generally, the northern Gold Coast/southern Logan market remains steady with no significant increase or decrease in value for the first months of 2018. Sellers with high expectations within this locality remain on the market for extended periods of time and typically require a price adjustment to effect a sale.

In Yarrabilba, there is currently a significant gap between resale and new products. Generally, resale property is selling at a discount compared to recently completed and new stock due to the level of competition within the estate. The rental market in Yarrabilba is also very competitive and it is common to see a property with a reduction of rent from $390 to $350 per week in order to secure a long-term tenant. Brookhaven is located closer to Beenleigh and is considered to be a direct competitor to Yarrabilba. The other master-planned community of Flagstone remains quiet with the developer aiming more at the owner-occupier market. The prediction is that the second half of 2018 will see the established market remain stable, however the developing estates will require more attention to price point as a number of developers may be in a situation where growth outweighs demand which will put downward pressure on the underlying land component which in turn would reduce the gap between new and second hand stock.

Central Western Gold Coast and Hinterland

Prices have remained relatively steady for the first half of 2018. Agents continue to advise of a shortage of stock for dwellings within the $450,000 to $650,000 market in areas such as Nerang, Highland Park, Maudsland and Pacific Pines. Recent feedback from agents suggests the higher priced dwelling market ($750,000 plus) has slowed, with longer selling periods. The $300,000 to $450,000 townhouse, villa and duplex market remains strong, being affordable options for first home owners and investors. The western rural residential markets such as Beaudesert continue to experience relatively stable sale rates, although prices have not increased significantly.

Agents have advised that the recent Commonwealth Games did not have a major influence on the market in the western area of the Gold Coast. Rather, factors such as the generally low interest rate environment, affordability (Sydney and Melbourne buyers continue to see value in our market) and first home owner scheme have helped the market’s performance. The Queensland Government extended the $20,000 first home owners grant in late 2017. The grant is set to end on 30 June 2018. This has somewhat contributed to the strong performance of the affordable new dwelling, townhouse, duplex and unit markets.

The next half of the year looks to remain stable, with interest rates not expected to rise dramatically and demand from interstate and overseas investors expected to remain steady. We will see whether the Queensland Government will extend or end the $20,000 first home owner grant come 30 June and what impact that might have.

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