Gold Coast September 2017

The month in review: Gold Coast

By Herron Todd White
September 2017

North-Western Gold Coast and Lower Logan

The northern (Gold Coast/Southern Logan) corridor provides affordable options for home owners, being cheaper than its central and southern Gold Coast counterparts, especially since the improvement of the Gold Coast market over the past few years.

First home owners are active in this area. They can purchase house and land packages from the high $300,000 mark to $500,000 in a number of suburbs such as Ormeau, Ormeau Hills, Pimpama, Holmview, Bahrs Scrub, Yarrabilba and Flagstone. The Queensland first home owner’s grant and low interest rate environment have also contributed to this market. First home owners also purchase affordable older or semi-modern detached dwellings and attached duplex and townhouses or units within the $280,000 to $400,000 range, especially in suburbs where the detached house may just be out of reach.

Families are active in detached home ownership around the $400,000 plus mark in suburbs such as Upper Coomera situated near schools, transport, shopping and infrastructure. Families upgrading and looking for space and lifestyle have also been purchasing rural acreage detached housing in areas such as Kingsholme and Jimboomba. An example is Montego Hills estate in Kingsholme (approximately 30 kilometres north of Surfers Paradise and 45 kilometres south of Brisbane CBD). This estate offers vacant rural residential allotments between one and two acres ranging in price from $370,000 to $480,000. These blocks are being purchased by families and upgraders wanting the lifestyle block and space.

Empty nesters typically purchase attached duplex/villa/unit type accommodation starting from $280,000 plus with low maintenance and affordability in mind.

Home owners tend to look for accommodation to cater for their needs. For example families will purchase homes that include larger or multiple living areas and yard space, whereas investors will purchase housing that will maximise yield return, opting for more bedrooms and less living areas and yard space.

The next generation have not given up on the idea of home ownership within the northern Gold Coast corridor due to the affordable options provided, especially when prices within the central and southern Gold Coast precincts start at the $550,000 to $600,000 mark.

Northern Gold Coast

The northern Gold Coast typically represents an established market with first home buyers not a large or very active market segment. Agents are reporting that a lot of the first home buyers that they do see are now struggling to get mortgage approval with some sale contracts failing to transact.

First home buyers in this locality typically favour semi-modern circa 1980 to 1990s, 2- and 3-bedroom duplex and townhouse style units. This product is priced from around $330,000 to $380,000 and is located in the central areas of Southport, Arundel and Labrador.

Affordability is the main driver for the first home market in this area and there has more recently been a strong and obvious trend towards attached style housing. Preferences with regard to proximity to schools, public transport, the CBD, hospital or university and proximity to Broadwater are front of mind for this product type, with the more bedrooms the better and then buyers will look at the condition of the improvements.

The market on the northern Gold Coast is driven by two main sectors being local upgraders and people migrating to the coast from interstate or Brisbane. Buyers in each of these sectors are looking at improving their life styles. The Gold Coast is a desirable location and upgraders are motivated by improving on their quality of home and location, i.e. canal, golf course and Broadwater locations.

Potential first home buyers are now looking at lifestyle more and more and seem to be renting in a more desirable location, however this comes with the potential of being caught in a rental trap. Rents have strengthened over recent years and would be impacting on the ability of many to save a deposit for first home investing.

Central Gold Coast

Home owners have been very active in the central areas of the Gold Coast over the past twelve months, however it has become evident in the past few weeks that there is now a lack of urgency to move. In most cases, buying property in this particular patch is seen as a lifestyle decision for owner-occupiers. Beachside or waterfront property are typically the most sought after. The market for residential property that offers beachside living or boating access has been quite strong over the past two years. Mermaid Beach property has been very popular for those wanting to live by the beach. This suburb offers a variety of housing choices from small walk-up units to duplexes to large beach front homes and property here is always seen as an attractive investment because it offers something for home buyers of all budgets. Broadbeach Waters has been arguably the best performing suburb in terms of price growth in the past five years and housing in this suburb is primarily dominated by canal front dwellings. Entry level for waterfront housing would be around the $800,000 level.

It appears local home owners are becoming aware that prices have shifted upwards significantly over this period. There is a sense that home owners realise that the market may be close to overheating. Whilst most home owners would be confident of achieving a good result if they had their property listed on the market, many would also be concerned of having to pay an over the top price to re-enter the market if they wanted to upgrade in the same suburb or shift to a neighbouring locale. There is a real lack of stock for most property types in the central suburbs, except for highrise apartments in Surfers Paradise, which is more of an investor-driven market.

A typical first home buyer in the central areas of the Gold Coast would most certainly desire to invest in detached housing in a central locale, however in the current market it would be quite difficult to find this opportunity. A buyer would be expected to pay more than $600,000 for an entry level 4-bedroom detached house in Robina, a suburb which is a few kilometres away from the beach. There are still some affordable detached housing opportunities in suburbs such as Carrara and Mudgeeraba in the $475,000 to $550,000 price range but agents report that demand for these type of properties is far outstripping supply.

We are seeing a trend where many first home buyers in this area are willing to sacrifice the dream of having a detached house in a central spot and target something smaller in living size (e.g. a townhouse) but it must have modern finishes. Home owners who consider townhouse living as an option are also looking at properties which can offer suitable car accommodation and at least have proximity to amenities such as shops and schools. Even with the low interest rate environment, we have not seen a huge amount of sales activity that has originated from first home buyers over the past few months. Properties in this area are generally in the higher price bracket, being out of reach for the large majority of first home buyers. Some developers who have built townhouse or low to medium rise projects in Robina and Merrimac have had reasonable success in selling new product to first home buyers and owner occupiers this year.

With the Gold Coast residential property market appearing to show signs of overheating in most coastal suburbs, it’s probably not the best time for first home buyers to enter the market right now. Those home owners who have been mulling over selling or even down sizing should possibly look at renting as an option in order to avoid re-entering a hot housing market. The Gold Coast property market can be volatile at times and should interest rates spike or economic conditions soften over the upcoming months, the thought of owning a home will be less gratifying.

Central West Gold Coast And Lower Logan

In the central west Gold Coast and Lower Logan areas it appears a lot of purchasers are home owners and less are investors due to the locality and lower price compared to central localities. The cheaper prices are attracting home owners who were previously renting and want the my home feeling. Deposits for the contracts appear to be less than 5% in a lot of instances.

In the central west and western areas, home owners appear to be young couples getting their foot in the door as prices appear to be cheaper than the central coastal areas. They are typically purchasing new products, particularly throughout the new Maudsland estates, as well as small villas and townhouses within complexes.

Out west, it appears established families are upgrading to larger properties in superior localities such as Tamborine and Cedar Vale.

Central western localities offer good value for money with prices for dwellings such as an older style, 3-bedroom in Nerang being circa $400,000 and a semi-modern, established dwelling in Carrara being circa $550,000 to $650,000.

New stock in Maudsland is priced between circa $500,000 and $650,000 depending on the size and quality, etc. This still offers good value for money being within close proximity of the M1 and major shopping centres.

Out west, prices vary significantly depending on the property type, from $300,000 in Beaudesert for an original dwelling within the township to $600,000 plus for larger acreage properties.

First home buyers are leaning towards any affordable product in suburban areas (attached or detached) and out west, home owners (minimal first home buyers) appear to be attracted to larger land areas with good quality ancillary improvements.

It appears home buyers are attracted to the price, age and accommodation. Accommodation is typically seen in 2-bedroom duplexes throughout Oxenford, where garage conversion to a bedroom is becoming more typical. Home owners’ attraction to new products is seen throughout central western areas amongst townhouse villa projects such as Hilltop Villas in Carrara and new townhouse projects west of the M1. We are occasionally pulling back prices within these complexes.

Throughout central west and western localities, there appears to be a mixture of first home buyers, upgraders and sideways movers with an evident attraction to central localities for first home owners and larger, older properties for upgraders.

There appears to be minimal retirees throughout the central west localities, however we have come across a few instances of retirees selling in order to relocate to a retirement home.

We believe the next generation has not given up on home ownership and are strongly attracted to owning their home. The current prices and competition in the market appear to make it more unrealistic within central west and western localities, however it is very circumstantial to the state of the market and economy when the time comes.

We have seen a strong mixture of home owners and investment properties throughout central western areas as there is no appealing lifestyle in western suburban areas, however it appears larger properties in the western areas are definitely favoured for lifestyle, however these are typically owner occupied.

Southern Gold Coast & Tweed Coast

Home owners/buyers are very active in the majority of areas on the southern Gold Coast with the majority of sales being to families relocating to a coastal suburb. In the higher price brackets, we are seeing a number of interstate buyers migrating north, however the majority of agents believe that properties being purchased by interstate buyers are for the owners to occupy in the near future rather then investment purposes.

The market and property values have improved considerably over the past few years and areas such as Burleigh Waters, Elanora and Currumbin Waters have been popular with families as they are within close proximity of the higher priced suburbs and beach side areas of Burleigh Heads, Miami, Palm Beach and Currumbin.

Entry level housing in Burleigh Waters, Elanora and Currumbin Waters is typically around the $600,000 mark for a detached dwelling and depending on the position/location and quality/size of improvements, this can vary up to as much as $1,200,000.

There has been a substantial amount of older homes demolished in our coastal areas with new attached housing and duplex units being constructed. These modern duplex units are also very popular in the market place and are attracting record sale prices for modern, low maintenance and easy lifestyle properties.

With duplex units, home owners prefer to have a double car garage and additional living rooms whereas investors are after more bedroom and bathroom accommodation with living areas and car accommodation not appearing to be as important.

One sector of the market which has improved considerably over the past few years is the older style, attached duplex units with yard space. As the entry level price for detached housing has risen, first home buyers have been priced out of buying a freestanding house and rather then buying a unit within a complex with body corporate fees, the older single level attached duplex units have become very popular in the marketplace with buyers wanting an outdoor living space and yard area for kids and pets.

The next generation of buyers appears to still be active, however the higher the price the thinner the market.

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