The month in review: Gold Coast
By Herron Todd White
Taking a step back and overviewing the results of the month has revealed that there is a continuance in demand for property within the M1 Upper North, continued local, interstate and foreign investment has fuelled supply within the major estates. The main property type for the M1 Upper North area is the investment stock situated within developing suburbs scattered around the M1 Motorway.
Coomera is situated on the eastern side of the M1 Motorway comprising major developing estates such as Genesis and Big Sky. The past month has seen continued growth within these suburbs with new stages being released. Genesis has reached a stage of decreased allotment sizes while new stages are being cleared. The new stage hosts lots from 200 square metres to 400 square metres, to fulfil the appetite of investment within the area. Big Sky estate has found it’s footing within the suburb supplying allotments larger than the typical for the area, this has encouraged first home buyers, young families and retirees to occupy and build their dream home on an allotment that could range from 300 square metres to 700 square metres. Overall Coomera has shown continued growth for investment stock and middle entry level stock, while the upper market has remained stable.
Pimpama is situated north of Coomera with estates developed and developing on both the western and eastern sides of the M1 Motorway. Leda developments has begun to release allotments within Pimpama Village, a new estate situated northeast of the old Strawberry Farm on the eastern side of the M1 Motorway. The development is to be mostly marketed and sold by Choice Homes, as house and land packages. This estate is offering allotments from 300 square metres to 750 square metres. Pimpama estates are targeting both local owner-occupiers and investors.
Ormeau and Ormeau Hills are the next suburbs north within the M1 Upper North area. Ormeau comprises a diverse range of properties; from large rural allotments to new standard investment stock. The majority of growth within this area is from Ormeau Ridge a Stockland estate within Ormeau Hills. Stages are continuing to be released at prices within market parameters and toward to upper end of market parameters.
Further north is the southern Logan area, stretching from Yarrabilba to the west to Eagleby to the east. The central business district of this area is Beenleigh, which has seen continued investment not only within the residential sector but also the retail, office space and industrial sectors with new planning instruments encouraging development. The flow on affects has encouraged subdivision of larger lots and new residential low to medium rises within the Beenleigh centre and surrounding suburbs. Yarrabilba, Logan Village, Buccan and Holmview continue to grow with new estates being proposed in Logan Village and the release of new stages in Holmview, Buccan and Yarrabilba.
The M1 Upper North area has continued to flaunt a safe and secure investment opportunity for local, interstate and foreign investment as demand increases from potential tenants with increasing employment opportunities. A caution for this area is that if the employment opportunities were to decrease the area would suffer more than any other area within the Gold Coast region.
The northern coastal region of the Gold Coast has continued to show strong levels of demand across land, houses and unit sectors. Houses are proving the strongest sellers as purchasers and potential purchasers are showing signs of panic as they continue to miss out on properties due to the high demand and reduced stock levels. In some cases purchasers are offering above the asking price in order to secure the sale as they have previously missed out on several other properties. This has been particularly prevalent in the more central suburbs, such as Ashmore. One example is 8 Kittani Crescent, Ashmore where the asking price was $569,000 and the purchaser, a first home buyer, submitted an offer of $575,000. We have seen price increases across the suburbs and as house prices continue to rise we are also noticing an increase in demand for duplex units, being a more affordable option. Resale prices of land are increasing in Hope Island’s newer estates however we have noticed that the purchasers are generally from interstate and some of the prices are above market levels with vendors keen to capitalise on the ‘mania’ in the market at present as well as the interstate buyers purchasing power and lack of local market knowledge. We have also noticed that some builders are capitalising on the mania and lack of local market knowledge with interstate to be erected dwellings with high rates per square metre for basic quality dwellings. Of particular concern are the low deposits offered by a large portion of purchasers as they appear to be trying to secure property at the low interest rates.
Looking at the current state of the market in the central areas of the Gold Coast, we have seen increases in values in all property types. The price sector that seems to be running the hottest is the $400,000 to $800,000, these properties are generally detached dwellings suitable for families who are owner-occupiers. We note that properties in this price range are now selling over previous peak prices of 2007. This has been fuelled by the limited supply and high demand. It is quite common for properties to sell within one week of being listed after receiving multiple offers. An example of a house price increasing in value is 7 Ulrike Way Benowa, it is currently under contract for $825,000, previously sold for $700,000 in March 2014. The property comprises a single level, circa 2000, modern style, rendered brick, 3-bedroom plus study, 3-bathroom, dwelling, with concrete tiled roof and 2-car garage with a pool. The land area is 673 square metres. The property sold within a few days of being on the market. The sale shows a capital gain of 17.8%.
The unit market has also picked up from Surfers Paradise to Pacific Pines, most of these buyers have been interstate buyers looking for a cheaper investment property compared to Sydney and Melbourne. An example of this increase can be seen in a typical 3-bedroom, 2-bathrooms and 1-car garage townhouse in Pacific Pines. The townhouses were selling for $240,000 to $260,000 earlier this year, now they are around the $290,000 mark.
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.
The only sector that hasn’t seen this rapid growth is the $1.5 million plus market. We believe there is good value in this sector as this price range still remains out of reach for the majority of the market. This sector will start to pick up as a flow on effect from the lower price range as they start to increase.
We believe the strong performance in the residential sectors will be sustainable over the coming year if the interest rates remain the same, once the rate starts increasing the market will start to ease off.
In 2015 there has been continued improvement in the residential property market across most sectors but not all sectors. The vacant land sector has perhaps been the strongest with the majority of estates having sold out or close to selling out. There is reportedly no developed stock available in Casuarina, with resales very strong. There has been a recent resale of a 500 square metre allotment in The Pocket for $520,000 which was originally purchased off the plan for $395,000. There has been an improvement in prices for vacant land in Terranora as demand is now stronger than supply.
The Hidden Valley estate at Tallebudgera is almost sold out. Sales have been strong at the observatory and Varsity Heights estates at Reedy Creek and also strong in Palm Beach Heights at Elanora.
From Miami to Pottsville the housing sector has continued to improve throughout 2015, being strongest in the under $750,000 price bracket. In most localities demand is outstripping supply.
As Valuer’s, in a lot of cases sales evidence is not directly supporting new sales. There has also been strong sales activity in the over $750,000 price bracket in waterfront localities such as Currumbin Waters, Palm Beach and Burleigh Waters.
Duplex units have been selling well across the board along with townhouse and villa units in small complexes. A significant percentage of sales of these properties are investment sales. A townhouse unit in a large complex at Burleigh Waters is currently under contract for $325,000 whereas the highest sale in the complex prior to this sale was approximately $300,000.
At Burleigh and Palm Beach there has been some recent building activity for good quality duplex type units, with developers confident of making sales over the $750,000 price bracket. Some recent sales include a new duplex unit at Palm Beach for $800,000 and another duplex sale at $980,000. There has recently been some strong sales activity for low-rise units along The Esplanade at Burleigh Heads. Sales activity and market demand for lowrise unit in the under $500,000 price bracket has also improved. There have also been some capital gains for well-located high-rise units. There has been a recent sale of 2-bedrooms, 2-bathroom unit in the rear Ambience building at Burleigh Heads for $730,000 which previously sold in June 2011 for $625,000.
Caution remains for low-rise and high-rise units in large, older buildings in secondary locations where high body corporate fees may apply. Local agents are reporting limited levels of demand for similar properties.