Gold Coast September 2018

The month in review: Gold Coast

By Herron Todd White
September 2018

Gold Coast

The Gold Coast is well known for its warm sunny winters, attracting tourists from southern areas as they attempt to escape colder conditions. Traditionally, Melbourne and Sydney buyers have the mentality that Spring is the best time to buy with many agents reporting it’s their best market. Although, the Gold Coast has not adopted this market mentality with the number of sales in Spring remaining consistent with those of the previous winter.

The Gold Coast market is very suburb and property specific with different markets behaving in different ways, although, all areas of the Gold Coast have experienced a reduction in interstate and international investment.

Gold Coast North

The Northern Gold Coast is continuing to expand in response to growing demand, further closing the gap between the Gold Coast and Brisbane. This has resulted in land developers changing their focus and marketing strategies towards owner occupiers/end users, which has resulted in a softening of monthly sales rates in most subdivisions. As Coomera and Pimpama continue to expand, land values within main estates such as Gainsborough Greens continue to strengthen. In Yarrabilba, sellers are continuing to see the gap between resale and new products. Due to the high amount of competition, many properties are suffering large discounts to achieve a sale.

The prestige market within Hope Island and Sanctuary Cove continues to remain stable while many buyers seek the prestige, canal and riverfront living. Although, sale prices for these properties can prove volatile if economic or general market conditions were to soften.

We have found recently many units within the Labrador and Runaway Bay area have been unable to achieve strong resale prices with agents reporting limited buyer enquiries and extended selling periods. As many investors are taking on losses within the newer buildings in an attempt to liquidate their portfolio, opportunities arise for those who have been traditionally unable to enter the market. Low interest rates coupled with these low resales provide traditional renters with the ability to own their own property or investment. However, we are aware the banks have cracked down and tightened their lending policies.

With the northern Gold Coast typically being driven by investors, this area will continue to soften until they return. If the banks and APRA were to review lending policy, this may allow others to enter the market and thus take advantage of this supply of these low resale properties.

Gold Coast Central

The prestige market is highly segmented and the level of improvement is dependent on property type and price range, rather than the season. We are finding that if the property is priced correctly and marketed by an experienced agent for that locale, property prices are strong with fewer days on the market.

The majority of interest for prestige property on the central Gold Coast has been within Surfers Paradise, more specifically Isle of Capri and Sorrento in Bundall with a number of higher sales including an older, part-renovated dwelling situated over a double block with 44 metres frontage to the Nerang River on Saint Tropez Terrace which sold in August 2018 for $3.25 million. This property sold within 5 days of being on the market, and is a prime example of how quick a property can sell should it be listed by an experience agent at an acceptable price point.

More recently, we have been advised by a number of specialist real estate agents who actively market prestige residential apartment product in the coastal suburbs on the Gold Coast and they confirm of steady/ cautious levels of demand and enquiry currently prevailing, with limited transactions. They further report that clearly stronger demand is evident for prestige housing and whilst market sentiment for apartments has improved over the past two years, new luxury units must be appropriately priced in order to generate interest and effect a sale transaction.

Local agents are reporting a higher level of demand for beachfront properties, especially in the areas between Mermaid Beach and Bilinga with a number of record prices being achieved and properties selling to local buyers prior to auction with some properties on the market for less than a month. A recent sale supporting this is a large, three level “Hampton” style residence providing five-bedroom, six-bathroom plus powder room accommodation with an eight car basement situated on a 809sqm double block at Hedges Avenue at Mermaid Beach. This property is currently under contract to a local buyer for $12 million and was marketed for less than 19 days which is very fast as properties at this price point generally experience an extended selling period of between 12 to 24 months. However, properties in this range are very taste specific, and in limited supply so it is no surprise that it has sold so quickly and also at a premium price to secure the residence.

Furthermore, we have seen a number of prestige houses sold prior to being listed on the market with a recent sale recorded in July 2018 at $4.48 million for a property on Admiralty Drive. This home had sold just over a year ago in January 2017 for $3.5 million which is an increase of circa 28%.

Gold Coast South

Collectively the sale prices achieved for the southern Gold Coast have risen with larger spikes east of the Gold Coast Highway and especially for absolute beachfront or esplanade front properties. Although the increase has been steady over the past year, more recently affluent owner occupiers and/or developers have ensured these prices have risen at a more dramatic rate, this can be seen especially along the beachfront at Palm Beach and along the esplanade of Bilinga.

The predominately “Medium Density” zoned locales east of the Gold Coast Highway have encouraged developers to seek even single lot development sites which is now evident within the suburb of Bilinga. As many of the properties at Palm Beach east of the Gold Coast Highway adjoin the beach they are more suited to an affluent buyer as opposed to a developer due to the now substantially high land content whilst the developers are trying to string together larger sites by amalgamating multiple parcels throughout the suburb.

Generally speaking properties for sale on the southern Gold Coast have a decreased time on market in comparison to other areas of the Gold Coast, however, vendor expectation is still high and although properties within close proximity to the beach are achieving high sale prices those properties west of the Gold Coast Highway are not selling as fast nor has there been the uplift in sale prices. Whilst sale prices have increased throughout the southern Gold Coast west of the Gold Coast Highway the most substantial increase has been at Palm Beach, which has been steadily increasing for around two years.

The suburbs west of the M1 have seen increases in sale prices, however, the significance is far smaller than that of the suburbs closer to the coast. The acreage properties west of the M1 are still remaining on the market for longer periods of time than those closer to the Gold Coast Highway, however, the time on market is very suburb specific, with long market times required further west of the coast.

At present the southern Gold Coast market is not operating on a climatic cycle nor any significant economic cycle, the market is being driven by demand which is linked to the lifestyle being different to the central or northern coastal areas of the Gold Coast.

Gold Coast West

Signs of a Gold Coast property market slowdown are showing throughout the city. The western Gold Coast market has experienced a relatively steady overall run over the past few months with demand clearly softening and agents reporting a shortage of stock for dwellings in particular within the $450,000 to $650,000 market in areas such as Nerang, Highland Park, Maudsland and Pacific Pines. The townhouse, villa and duplex market remains stronger, being the more affordable options for first home owners and investors between $300,000 and $450,000.

The rural residential markets and properties with acreage are generally experiencing lengthier times on the market with most buyers being driven by property specific types and lifestyle. Properties close to schools are still achieving stronger prices as demand is still solid in those market segments particularly in the highly sort-after estates throughout suburbs like Mudgeeraba and Tallai.

The Scenic Rim area including Beaudesert continues to experience relatively stable sale rates with prices not increasing significantly. Farming and grazing land values increased by a minor amount since 2016 however are now showing signs of levelling out. The government owned land formerly known as the proposed Glendower Dam project at Tabragalba of approximately 2600 hectares has been selling at auction over the past few months and achieving strong sales prices in particular for the larger land parcels along the Albert River with good access to water.

The remainder of the year looks to remain stable with interest rates remaining at a record low and not expected to rise dramatically. Demand from interstate and overseas investors is also expected to remain steady.

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