Gold Coast

The Smartline Report – June Edition

The month in review: Gold Coast

By Herron Todd White
June 2016

Activity across the Gold Coast is erratic depending on the property type, buyer profile and vendor circumstances.

Houses within the central and coastal suburbs (Paradise Point to Palm Beach and east of the M1) are still attracting strong buyer demand. The wheels are still turning also for house and land packages sold via the investment market.

However, the volume of valuations for both refinance and purchas has definitely dipped over the past two months. Whether this is a result of concerns about the capital city markets, opinion that some price brackets are over heated, a looming Federal Election or a combination of all, it is the topic of many conversations.

“Will the Commonwealth Games create a boom on the Gold Coast?” and “Will there be a Games hangover?” are questions that are being asked regularly. Our view is that a boom is unlikely given the current state of play, and bust is not expected provided prices do not continue to grow through to 2018.

One thing that has become apparent is that some sectors are slowing more than others. During a boom market the last sector to see gains has historically been acreage housing and old highrise units. It is also not unusual for these two sectors to be the first to stall as the market slows, which is the case according to our current experience.

The central Gold Coast housing market up to $1.35 million appears to be the strongest in terms of price growth and volume of sales. The market, however, over $3 million is very slow apart from four recent sales over $10 million of which three have been to international buyers.

Northern Suburbs
While the levels of market activity in the central north zone of the Gold Coast are generally stable, it does appear quieter than this time last year.

In saying that, there is a hive of activity around Southport in the Priority Development Area with a number of new mediumrise residential buildings either recently completed or under construction.

These buildings are offering compact style units which have mainly appealed to investors at attractive price points around $400,000. These units are renting out between $420 and $470 per week and have quite manageable Body Corporate fees of around $50 per week.

Agents have been reporting that older established units (duplex and townhouses) are spending more time on the market than six months ago and this could be attributed to the new affordable stock available in Southport and Biggera Waters.

The housing market is robust up to $700,000 in most areas. We are finding renovated dwellings through Ashmore, Southport, Biggera Waters and up around Paradise Point are achieving premium prices if the quality is there. Local selling agents are reporting that a lack of quality stock is keeping competition healthy.

In terms of affordability, around Coombabah for example, there are opportunities for first home buyers. A notable sale on Allinga Street, which is a quiet street near the river. It comprises a single level, circa 1960, older style, fibrous cement sheeting with 2-bedroom and 1-bathroom and has fibrous cement roof and a 2-car detached carport. The living area sizes is 99 square metres with an outdoor area of 60 square metres. The dwelling is located on a near level, regular shaped, inside lot situated at road level with a land area of 506 square metres. The property sold for $400,000. Most properties will need work around this price range however they have good opportunity for capital growth.

There have not been any surprises as such in the central north area of the Gold Coast, the interest rate drops have supplemented what seems to be a rare period of stability.

M1 Corridor
With new estates continuing to spring up throughout Coomera and Pimpama the majority of transactions within these suburbs are to the investor market. Interstate investors account for the bulk of sales, however investors with a Chinese origin are starting to increase in frequency. House and land packages still continue to be the most popular product with prices for both the vacant land component, and building contract varying wildly. It is not uncommon for build costs to range between $1,150 to $1,500 gross per square metre for a similar product. Likewise, there is also a wide range in purchase prices for vacant allotments with your typical 400 to 450 square metre allotments selling for between $230,000 to $260,000. In some of the smaller estates we have seen a single builder exercising ‘put and hold’ options on the entire estate which excludes the owner-occupier market.

Eagleby, an established southern Logan suburb, still continues to be popular with southern investors with investor demand outstripping that of the owneroccupier. Prices in this suburb have accordingly seen an upward momentum over the past 18 months.

Despite the domination of investors in the suburbs of Coomera and Pimpama owner-occupier demand has remained strong, albeit confined to estates such as Gainsborough Greens and Parkside for new product. An example of a house and land package that recently sold in Gainsborough Greens is 14 Girraween Street which was priced at $492,504 and comprised a 4-bedroom, 2-bathroom onground dwelling with a good quality fitout, 185 square metres of living situated on a 420 square metre regular shaped allotment. Established estates such as Coomera Waters and Genesis have also continued to be favourites with owner-occupiers due to the higher quality dwellings located within, and the higher ratio of owner-occupiers to investors.

Eagleby has seen a recent increase in owner-occupier activity as buyers are being priced out of suburbs closer to Brisbane, however, investor transactions still dominate this particular suburb.

Southern Gold Coast/Northern NSW
The market for the majority of residential property types continues to strengthen on the southern Gold Coast and northern New South Wales with reduced selling periods, stronger market demand and less stock available.

This is also evident in the rental market with property manager’s reporting strong levels of enquiry by prospective tenants within the first few days of a property being offered for lease. As a result, the rental prices being achieved have improved considerably over the past 12 months, as have the returns/yields to investors.

While there are a small number of investors buying units in the southern area, the market seems to be dominated by owner-occupiers looking to move to the beach side suburbs. A number of the properties are being sold to local buyers rather than interstate investors.

Scenic Rim
The north-west and western portion of the Gold Coast offer both good value for money and return on investment, especially with the current low interest rate environment. Investors and owner-occupiers alike are still active within all the new growth areas of Yarrabilba, Jimboomba Woods and Flagstone.

Land values are still rising steadily with the majority of estates reporting good enquiry with limited new stock available. Developers appear to be focused on both sectors of the market, with Lend Lease recently offering ‘completed’ land to target to the owneroccupied market. This eliminated the construction lead in time and waiting for the issue of titles before being able to settle and start building. Sales within the estate are now predominantly to the owneroccupier market with the average 450 square metre allotment selling for around $190,000 to $200,000.

Moving a bit further west, Flagstone has recently released their land to the west of the BrisbaneSydney Railway and are reporting good interest. This precinct will appeal to the lower end of the market, sub $400,000 and, in time, will include shopping and medical precincts as well as passenger rail to the Brisbane CBD. There is a release of land located directly opposite the Flagstone Primary and Secondary Schools which sold for around $145,000 for a 375 square metre lot.

Heading South, established housing in Beaudesert remains an owner-occupier market with the majority of sales occurring from $280,000 to $360,000. There are a number of estates being released within the area over the next six months or recently released including Oakland Estate, balance of Scenic Rise and Banksia Greens, and these will target both the owner-occupier and investor. The Bromelton State Development Area is due to start construction by the end of the financial year and this is expected to have a positive effect on demand within the immediate area.

 

 

 

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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 – 2016. Australian Credit Licence Number 385325

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