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This month I've noticed a massive increase in the number of properties coming across my desk due to a divorce or relationship break-up.
Who’s the first person the agents call when sellers want a no-fuss sale? You guessed it, Us….
-We network well and have formed good quality working relationships with the agents and mortgage brokers over the years
- Our buyers have finance pre-approval in place and ready to go
The tally would be at 7 or 8 of these such sales that we are aware of just throughout June and July thus far, that haven't openly made it to the market - and that's just in the suburbs we’re currently actively searching in for clients.
These distressed sales obviously can result in great buying for our buyers - one such property we secured for a client over $15k less than a back up contract, just because we could act quickly and decisively.
Based on past experience, the agents know that by dealing with us, the sale has the highest chance of completion through to settlement and with the least amount of hassle so that works to our advantage. When in a multiple offer situation, an agent will encourage a seller to take our offer, even if it is lower than another, because they know we can rationally work through any issues that may arise.
Even if issues are found after an unfavourable building and pest inspection for example, we have the experience to work through them, often with a price renegotiation, or we have a network of the right tradies in place so work can be easily arranged, and at a good price.
A question I can’t answer though, is why so many off-market ‘divorce’ sales all at once? Is it just that sellers now have some good equity in their properties and can leave the relationship with some cash in their pockets to start over again?
Fortunes are made and lost everyday in real estate - and it’s no truer than in the Gold Coast Property Market today.
I'm finding it’s difficult to see good value in some suburbs on the Gold Coast at the moment, particularly in some of the more prestigious beachfront and beachside suburbs, but that’s from a locals perspective. For buyers from Sydney and Melbourne, who have a different ‘sphere of reference’ our market still presents great value (as a comparison to their overvalued markets at home) and they have no hesitation in paying at or above full asking price, just to get in the market. The FOMO (Fear of Missing Out) phenomenon is still very much at large in the market - so that also helps to drive prices upwards.
One of my secrets to buying well is to understand the motivations of the seller. Understanding the vendor’s reasons for selling and what’s really important to them, can often be your point of difference to get your offer accepted over the others.
WOW! What an ENORMOUS start to 2017 (that’s why you’re getting Januarys newsletter in April - we just haven’t had 5 mins to put pen to paper over the last few months!).
After a relatively quiet period this year between Christmas and New Year - which traditionally has been one of our busiest times - I thought to myself “Great, I’ll just cruise into the New Year and wait for the market to get back to normal’ - well, I must have jinxed myself because my phone has not stopped ringing since the 2nd of January with new buyer enquiries, agents with new listings and a lot of off market opportunities coming through. The Gold Coast property market is well and truly cranking!
Being entrenched in the property industry for over 10 years now, I’ve watched and worked through the seasonal cycles first hand many times on the Gold Coast.
Unless you watch the market and analyse it on a daily basis, you wouldn’t realise things like the time of year, school holidays and public holidays have an effect on the property market BUT it does, and more so than you realise.
Let me run you through a typical year…..
January (our busiest time with a massive influx of new enquiries ) - People take a lot of time to take stock of the last year and have reassessed their goals for the New Year. Maybe a plan to upgrade and upsize their existing family home, a job transfer which means they need to buy a new family home in an unfamiliar market, or investors deciding THIS is the year to finally start investing in property.
Lots of sellers at this time of year too, especially units in the beachside suburbs trying to cash in on the uneducated interstate tourists who decide they’d love a little chunk of the Gold Coast for themselves (yes this does happen! Often!) And not uncommon in Surfers Paradise or Broadbeach, these properties often come back up for sale a year or two later at the same time of year. New owners realise the reality of holiday rental return figures not being as great as they thought and sky high body corp fees taking their toll.
February things really start to heat up The hangover of Christmas and New Year is long forgotten (at least until the credit card bill arrives…..ekkk!) and it’s pretty much life as normal.
Everyone is back from holidays, kids are back to school, the building industry is back to business.
There is an influx of new properties hitting the market, usually seen from the last week in January and well into February - inline with the kids going back to school. Don’t know why? Those of you with children would appreciate what a fruitless battle it would be to try and keep the house clean and tidy for open homes and inspections with kids at home rampaging! These sellers have also taken the time over Christmas, New Year and Australia Day to prepare their properties for sale and get their presentation 100% to maximise their sale price.
March/April - The market is running at full steam by now - with a bit of a hiatus in the middle for Easter! We’re noticing this year, that the number of ‘off market’ sales coming across our desks have increased substantially. Agents simply do not have time to get the listings online and market them correctly, so see us as a quick and easy sale if it’s a quality property at the right price. Read more about this in our December newsletter
May to July- Traditionally winter is renowned to be a quieter time in the property market. The buyers around at this time of year are very serious about buying and the sellers are serious about selling - usually for tax reasons and they usually do it in a hurry as they need everything wrapped up and sorted by end of financial year.
Based on my past experience, the market almost comes to a standstill between the Federal Budget (usually the beginning of May) through until the end of financial year at 30 June. (And just saying, if you can’t find me during this time of year, I’ll be working on my tan for a few weeks in Singapore and Thailand!).
For us, the phone stops ringing from buyers and agents alike and it’s an ideal time to take a breather, catch up on everything in house, get our filing in order and get ready for Spring!
July/August - Come the first of July, the old financial year is behind us and the phone starts ringing again! Buyers are ready to go again, and it’s our 2nd busiest time of year with buyer enquiry. Buyers ring us as they’ve had their tax done by their accountant and they’ve got a tax problem they need to fix for the new tax year - and decided they need some professional help as they don’t know where to start.
Lots of beachside holiday rental high rise units up for sale at this time of year when there is almost zero rental return.
September/October - There’s a commonly held belief in the real estate industry that spring is the best time of the year for selling a home so there are lots of new listings coming through. The flowers are blooming, the grass is green and all the sellers are keen to make a move into their new houses and be settled in and unpacked by Christmas.
November - A seller can put almost any price on their property in November and it will sell! There is always frantic buying in November - buyers have realised they need to BUY NOW to be in their new house by Christmas - so it’s just carnage in the market at this time of year. Buyers overpay, just to be in the market and sellers reap the rewards. At this time of year, you really need to watch the market like a hawk to ensure you either don’t pay too much for a property or don’t miss out altogether, as in my opinion owner occupier buyer activity is at one of its highest for the year and often properties sell within 24 hours of being listed.
December - Sellers in the market at this time of year are usually really keen to sell. Possibly the contract on their property from November fell over due to finance or there is an imminent job transfer and they are in the ‘must sell’ situation. If you’re a buyer, it’s often possible at this time of year to pick up a bit of a bargain if you’re pre-approved for finance and ready to go - but don’t get frustrated by the lack of choice on the market after the November action. Just take a break and revisit it all towards the end of January.
Most solicitors and some banks take a break of 2 to 3 weeks over this time so the real estate industry is forced into a slow down. (Make sure you research this before you enter into a contract as you may need to use extended time frames for your contract conditions to be met).
Phew, what a year! After a quick breather we’re ready to do it all again……!
So in short, while every location and suburb goes through its cycles, so too does the Gold Coast Property Market as a whole throughout the year - and this can be key to understanding exactly what’s happening when you are trying to enter the market.
On a side note, this month Eureka Property Buyers Agents celebrates it’s 8th birthday and my 11th year as a Gold Coast Buyers Agent. What an experience!
To all my past and current clients I wanted to THANK YOU for your business - it really is greatly appreciated. I’ve loved every minute (almost.. LOL!) of working with you all and no denying there were some stressful times along the way when things didn’t go our way for one reason or another - but I just wanted to say ‘Thank you’.
I truly am grateful to the many of you now coming back for your 2nd and 3rd purchases after the massive upswings you’ve had on your values of late on the Gold Coast. Clearly, I got it right the first time and I’m really looking forward to what the Gold Coast Property Market has in store for us all in the coming years.
Until next month, the hunt continues!
Gold Coast Property Market Update - December 2016
Opinion by Nicole Marsh - Buyers Agent and Business Owner - Eureka Property Buyers Agents
21st December 2016
Only 4 more sleeps ‘til Santa comes!!! … With a little person in our household who this year has worked out what santa is all about, Christmas is going to be a lot of fun this year. He no longer runs away from Santa but makes a B-line straight to him at lightning speed when ever we happen upon santa when we're out and about. What a difference a few years makes…..
He asked me last night “Mum how does santa know I like lego so much?” “Hmmmm I wonder…..santa’s pretty smart you know.”
Another question I get asked all the time, but particularly this time of year is ‘when is the best time to buy?’ Should I buy now or hold out to next year?”
The best time to buy in my opinion is when YOU are ready. The perfect property for you could already be on the market or might hit the market tomorrow…..or next week - and I find a lot of buyers over analyse things. Just get yourself sorted and in the best position to buy.
Believe me, after 10 years as a buyer's agent, great buys come up nearly everyday - but you need to be poised and ready to take action.
How I see it is if you've got your finance pre-approval in place, if you've researched your areas and have a targeted approach to what you want to buy, for investors if you know what attributes in a property are going to give you the best rental returns and you know the recent sales data of comparable sales up to the minute - not 30 to 60 days old like some of the data readily available and know it like the back of your hand - you’re already in a stronger position than about 98 percent of the other buyers out there and have set yourself up for sure success before you even inspect your first property.
>>There is nothing like the confidence of having finance pre-approval in place when making an offer on a property - and don't be afraid to give the agent a copy. It might just be the one thing that gets your offer across the line ahead of the five others multiple offers all vying for the same property like we’re currently seeing in some parts of the Gold Coast property market, and often for less money than the competition with sellers choosing the surety of a buyer thats ready to go.
In short, Yes there is less new stock hitting the market this time of year as sellers are more preoccupied with Christmas parties and festivities and are holding off to list their properties for sale til the new year - but it also means less buyers and less competition - so I believe it's a great time to be a buyer.
In my opinion, any sellers on the market now are keen to sell - maybe it's a job transfer, or they have a new business venture they are keen to get into in 2017- or maybe their property went to contract in the usual November flurry when the buyers go on a buying spree driving prices up as everyone wants to be in their new house by Xmas - and the deal fell over. Whatever the reason, it can be a good opportunity to pick up a great buy.
So I say don’t wait - get all of your ducks in a row, your solicitor and pest and building inspectors on speed dial and be ready to go.
As Christmas draws closer and 2017 is fast approaching, it's such a hectic but fun time of the year when we all try to take a moment out of our busy lives to spend quality time with family, friends and colleagues and re-evaluate our lives in readiness for a brand new year.
I must say I am grateful to be closing out 2016 on a high! It's been a massive year and not without its ups and downs, but a great year nonetheless. Thank you to all my lovely clients, both current and past, for your support - I really enjoy what I do, made even better by working with great clients. I put my heart and soul into what I do and, after 10 years as a buyer's agent and coming up 8 years in business, it's still a real buzz creating ‘Eureka' moments for my clients. Many of whom become great friends - and yes, lots of invites to house-warming parties.
As we reflect on the year that was, I'm looking forward to a bit of time out and much needed R & R and time with my family over the coming weeks - recharging the batteries in readiness of a productive start to 2017. … I've got some big plans for 2017 already with business expansion, the addition of some new support staff and possibly some new cash flow positive products for our investor clients (And for those of you who know me really well, you know I’ll have it all done by Easter! hahah). Watch this space….
No new year hangover for me this year. I am already fielding lots of enquiry from interstaters on the move North and looking for a new home in the early part of the new year…..and with lots of infrastructure projects and development on the Gold Coast in the lead up to the Commonwealth Games in 2018, the Gold Coast is still a great place to invest - you just have to know where - so 2017 is shaping up to be a big year already.
Hope you all have a wonderful, crazy week in the lead up to a well-earned Christmas/New Year break … wishing you and yours the very best of the Season and your best year yet ahead in 2017!
Nicole and the Eureka team
Gold Coast Property Market Update - November 2016
Opinion by Nicole Marsh - Buyers Agent and Business Owner - Eureka Property Buyers Agents
28th November 2016
This month I’ve noted that the number of ‘Silent Sales’ or off-market listings coming across my desk has increased. The agents are just so busy that they don't even have time to arrange to have the professional photos taken and to get the properties listed on the net, but it takes them 5 minutes to give us a call and know really quickly if we have a pre-qualified buyer ready to go.
>>This type of thing happens daily - but one such example this month is the Lloyd family who have just settled and moved into their perfect family home we found for them on the southern Gold Coast.
They were local, had bought and sold a number of properties previously and knew the area they wanted to purchase in well but came to us after a bad experience they had with an agent and the whole left them a little bit battered. Being very time poor, working full time and with a young family, they thought I might be able to make the whole process just that bit easier for them by doing the leg work and running around, and providing them with a short list of the most suitable properties.
Within a week, I’d compiled a list of the most suitable properties, and set about my networking with all the agent I knew in their chosen area. One agent Id dealt with in the past knew how we worked and was really keen to work with us again given our ‘No BS’ approach - he knew all of our buyers were pre-approved for finance and ready to go.
He didn't have anything at the time, but had an appraisal lined up later that day on a property he had sold to the current owners some 10 years earlier - “I’ll ring you” he said.
Before the ink had even dried on his listing agreement, he called - “Nicole - I’ve got the perfect property for your buyers! It matches everything you said they wanted. How soon can you get here?”
I did all of my normal due diligence and online research - flood maps, preliminary council searches, aerial maps, comparable sales, past photos etc - and everything stacked up.
I rang the buyers and made arrangements to inspect the property with them the next day - it was perfect! After months of looking themselves, they were very specific in their criteria and knew exactly what they wanted - the property met, if not exceeded, their criteria.
We put in an offer that afternoon and came to an agreement the following day. In the meantime, the sellers had put in a low ball offer on their perfect property they had found - which too got accepted - which meant they were prepared to accept our lower offer rather than trying to hold out for top dollar, let it drag out for weeks, and potentially miss out on their ideal home.
Based on comparable sales, I believe the Lloyd’s* purchased their property about $30,000 below market value if not more, as well as the time and money they saved by by having someone do all the hard work for them. With a few minor issues raised on the pest and building inspection, we even arranged a price re-negotiation to cover the expenses to repair.
And this is not a once off.
Another example we’ve purchased this month is for Daniel*, a local builder/small developer.
We came across quite a unique site ideal for a high end duplex pair. We had this under contract before the agent even had the professional photos done and before it even hit the net - and the agent tells us he could have sold it 10 times over he had that much interest in it - so no doubt we would have had to pay more to secure it - but with no competition, we were able to secure it with a 6 month settlement which worked perfectly for the seller - and gave Bill the opportunity to get all of his plans and council approvals for the development in place before he even owns the property and can begin construction the day after settlement.
About 30% of the properties we purchase are 'Silent Sales' and not formally advertised for sale - and it's getting more and more so in the current market as the agents just don't have enough hours in the day to get all of their listings online.
If you are looking to get into the Gold Coast Property Market, in my opinion, there is still ample opportunity in the market - and there's still good buying to be had - but you need to be able to recognise it when it comes up as there is no time to second guess yourself. It's all about being educated on the market, poised and at the ready for these opportunities - and being able to act on them immediately.
If you are already in the Gold Coast Property Market - depending upon when, what and where you purchased - likely you have had a really positive upswing in value on your property and should have some decent equity behind you. If you are curious and would like an opinion on the value of your property in today’s Gold Coast market, Contact Us for a free ‘Current Market Analysis’ - and I promise, no BS and no high pressure sales talk - that's not my style!
Onwards and upwards,
*Names changed to protect the buyers privacy
A combination of factors such as a shortage of stock, new infrastructure (such as the success of the light rail) and significant evidence of new residential projects under construction has firmed buyer confidence within the local property market on the central Gold Coast. It has been a fairly positive year in terms of price growth across all price brackets.
The strongest performing sections of the property market in the northern corridor between Brisbane and the Gold Coast in 2015 were house and land packages and duplex units. Suburbs such as Ormeau Hills in which the Ormeau Ridge estate is located, and Pimpama in which Gainsborough Greens in located, have seen arguably the best growth throughout the year. These estates are favoured by owner-occupiers and have seen increases in value between 5% and 10% during 2015. Duplex units have also performed strongly with prices paid for new 3-bedroom, 2-bathroom, attached style duplex units in Pimpama increasing from low $300,000s at the start of the year to mid $300,000s.
The continued low interest rates combined with a gradually strengthening economy can be seen as underpinning the positive growth in both values and demand in this area. The commencement of work on the Exit 54 upgrade and the proposed Coomera Town Centre Shopping Mall development have also furthered interest in the area.
At the start of the year we cautioned against lesser quality house and land packages being sold to interstate and overseas investors at inflated rates. This continues to be a problem in this area with construction commencing on numerous new estates throughout the year. If rental demand does not meet the upcoming available stock then we could see an oversupply of extremely similar dwellings coming on to the market.
The central north area has been performing quite strongly with many agents reporting stock shortages, particularly in areas around the Broadwater, Southport and Ashmore.
Established dwellings between $500,000 and $700,000 in these areas have seen increases of around 5% and 10% since the start of the year. Furthermore residential sites in Labrador, Southport, Biggera Waters and Paradise Point with re- development potential are in demand.
Land values in waterfront suburbs have also strengthened particularly Runaway Bay. Sale numbers between $1,000,000 and $1,500,000 have virtually mirrored 2014, while land values have increased by approximately 15% to 20% in this time. Quality, renovated houses are achieving premium prices close to the peak levels of 2007/2008.
The most positive news for the central north zone has been the announcement of the second stage of the light rail which will connect to the heavy rail at Helensvale. There is a buzz around Helensvale as to the positive flow on effects for property and businesses.
New medium rise unit development around Harbour Town at Biggera Waters including the East Quays development and Waterpoint Residences have sold strongly to owner-occupiers and investors at prices typically from $450,000 to $650,000 for 2- and 3-bedroom configurations. The first stage of Waterpoint Residences is nearing completion and is around 80% sold out (as at November 2015). The development will contain six stages with over 600 units on completion.
From early in 2015 the sustained growth has been expected and predicted. All indicators remain positive from many areas and there is no shortage of buyers in the low interest rate environment from overseas and locally.
Residential housing in Broadbeach Waters and Mermaid Waters has remained highly sought after and there have been no signs of this market cooling off. There is also a growing trend in these two suburbs where many old dwellings have been purchased and knocked down for new duplex developments. Local agents have reported fairly strong demand for these new duplex units which is generally a good indicator that local market conditions are very buoyant at the moment.
As predicted in our Month in Review article published in February this year, the detached housing market in the $500,000 to $800,000 price range within the central areas of the Gold Coast has continued to be a strong performer.
To give an example of how hot the market is within Mermaid Waters, we are aware that 16 Firmin Court, Mermaid Waters sold under the hammer in August 2015 for $650,000 to a local purchaser. The property comprises an original, single storey, face brick, 3-bedroom, 2-bathroom dwelling with detached double garage on a 614 square metre allotment. The property requires a full renovation. It sold well above the agent’s expectations.
Both detached housing and townhouse and villa units in Robina have been in high demand from owner- occupiers and investors.
There have been good levels of demand for waterfront housing particularly under $1,500,000. Along with Broadbeach Waters and Mermaid Waters, we have seen fairly strong price growth for canal front and river front properties in localities such as Isle of Capri, Sorrento and Benowa. While there has been increased sales activity for prestige homes ($2,000,000 plus), buyers in this bracket are still quite discerning with more stock to choose from.
We note that 9 La Scala Court, Isle of Capri sold in July 2015 for $1,950,000. The property comprised a fully rebuilt and renovated single storey, lightweight clad, 4-bedroom, 3-bathroom dwelling with a 2-car attached carport. The property has a south-westerly aspect to the canal with approximately 18 metres of canal frontage appreciating local, canal and river views. Ancillary improvements included timber decking, pebblecrete in ground pool with tiled surroundings and frameless glass pool fencing. The land Area is 779 square metres. It previously sold in April 2014 for $1,035,000 in original and dated condition.
The highrise market within Surfers Paradise, Broadbeach and Main Beach is starting to gain some momentum, apart from fully serviced apartments. There appears to have been steady price growth for second hand unit product over the past 12 months. Many new high rise towers are currently under construction which is quite a contrast to two years ago. It will be interesting to gauge the level of foreign investment in these new towers over the next 18 months and whether prices for this stock will move in a positive direction.
As predicted back in February, market conditions on the southern Gold Coast in established areas such as Palm Beach, Miami and Burleigh Heads continued to strengthen throughout the course of 2015 with the majority of buyers being from the local area. While there is very limited land available in these fully established areas, prices for knock downs and fully original dwellings with limited added value to the property as a whole have risen by as much as 10% to 15% since the beginning of 2015, which was predicted in our February Month in Review.
Casuarina on the Tweed Coast also performed according to our predictions with very limited land available and a continued increase in demand for land. A good example of this (and a trophy sale) was 34 Dianella Drive, Casuarina, which is located within the Miramar estate (considered to be one of the inferior new residential estates in the area). This property sold from the developers in February 2015 for $385,900 which was considered a strong sale price at that time. The property was since sold in September 2015 for $480,000 to a local buyer. This represents almost a 20% increase in value in the space of seven months. The property sold within the first month of being offered, a common occurrence for most properties in the sub $750,000 bracket on the Tweed Coast and Southern Gold Coast throughout the later half of 2015.
There were no weak performers in the southern Gold Coast, however high rise units and rural residential markets have not strengthened to the same extent as the standard residential housing and land markets, however the overall market in both sectors has also improved.
There are a number of new projects which have recently been released or are to be released in the near future including the redevelopment of the old Palm Beach caravan park by Sunland and soon to be completed Casuarina Town Centre.
There have been no major surprises which impacted the market, with interest rates remaining very competitive. There is much more positive activity occurring with reduced selling periods, a higher number of buyers and more competition for properties offered for sale.
Slow and steady is winning the race in the Scenic Rim locality in 2015. Most markets showed improvement in interest levels and sales rates across 2015, however price point remains of most importance for vendors. Most sectors performed well in comparison to the previous 12 month period and when priced in line with the market, agents are reporting sales within a few days.
Yarrabilba continued to be the star performer with all lot types showing up to 15% price growth for land values through the year. Lend Lease reported up to 50 sales per month and attribute the strong second half of the year to the announcement of the commencement of major infrastructure within the community. The announcement of a full service Coles supermarket, independent Catholic school, Caltex service station and tavern has spurred interest from the local market now that these services and facilities are becoming tangible.
Established housing has shown nominal growth within the regional centres of Jimboomba and Beaudesert, however there appears to be less stock relative to the start of the year and the time on the market is considerably less.
One of the star performers within the Jimboomba to Beaudesert growth corridor is Cedar Vale and the new release of land within the Jimboomba Woods estate. At the start of 2014, a 4-bedroom, 2-bathroom house on a 4,000 square metre allotment was selling for around $440,000. The latest sale of a similar house on a similar size lot is $475,000. This price growth has been underpinned by limited land stock within the area and the finalisation of upgrades to the Mount Lindesay Highway. Moving to the north-east, QM Properties released their new acreage estate known as Jimboomba Woods and have steadily increased prices from around $210,000 for a 4,000 square metre allotment at the start of the year to around $245,000 more recently.
The rural residential and rural lifestyle sectors remained stable through the year, with buyers placing emphasis on proximity to services, value for money, infrastructure and usable land. Non prime property remained static on price growth compared with the previous year. There are a number of larger rural holdings within close proximity of regional centres that still represent good value for money and good lifestyle options with sale prices still below replacement cost of improvements. Steady as it goes for this market.
Looking back over 2015, the predictions made at the start of the year have panned out within the marketplace and the markets highlighted for growth have materialised. On a whole, this year we would rate our predictions a nine or ten out of ten!
Southern Gold Coast/Tweed Shire
Investors are playing a key role in the property market on the southern Gold Coast and in the Tweed Shire. We note investors are very active in the sub million dollar market, in particular in beachside locations.
Investors in the market place are a mixture of both local and interstate, in particular from Sydney and Melbourne.
Typical investors are interested in properties with a steady or good rental return with low overheads.
The price points for localities such as Burleigh Heads, Burleigh Waters, Miami and Palm Beach is around $500,000 to $550,000 for established housing. Duplexes and units in these localities are around $365,000 and $400,000.
We believe that investor activity at its current level is not sustainable over the medium term in the property market.
If investor demand did start to drop, it would have negative implications for the market on the southern Gold Coast and in the Tweed Shire as investors are prevalent. The demand for property would slow and prices would likely fall due to more stock being available to purchase.
Investors in the costal north area are moderately to highly active, with the typical investor appearing to be mainly international using local builders and smaller project developers.
Investor activity in the central high density beachside locations has traditionally been driven by both local and non local investors. Lately we are seeing an increased amount of non local and particularly Asian investors, who are prevalent on new product.
New residential stock which fits criteria for Foreign Investment Review consideration and approval seems to be appealing overall to these investors on Hope Island, as this location is pre-approved for Foreign Investment Review.
General housing stock in and around the Southport CBD and spreading into Labrador and Ashmore are also appealing to these investors.
In central Surfers Paradise, investor activity is steady to strong with the a sub $500,000 price point seeing the most activity. However, high body corporate fees and property outgoings are deterring investors. For example Unit 26, The President, at 29 Northcliffe Terrace, Surfers Paradise sold in May 2015 for $358,000. This is a circa 1973, 2-bedroom, 1-bathroom unit of 86 square metres. It is an absolute beachfront development comprising 30 units on a parent site of 1,533 square metres. The agent reported that due to the high underlying land value, rates were circa $5,000 per annum plus the body corporate fees of approximately $150 per week made the unit unviable for many potential investors.
Investors are looking for larger dwellings on larger parcels with Residential Choice classification that can be split for higher density development such as duplex and triplex development.
The most intense demand however appears to be for residential estates close to the Southport CBD or highly regarded established precincts such as The Southport School (‘TSS’) location and areas with Broadwater proximity.
Investor activity away from the beach side locations is stronger than previously, with villas and townhouses in larger cluster unit developments in the more outlying suburbs having seen some increase in price levels from low to mid $200,000s up to high $200,000s.
Local owner occupier buyers are competing with local and interstate investors in these outlying suburbs for freestanding houses. Pacific Pines which was developed through the 1990s and 2000 has seen healthy increases in price levels over the past 18 months with entry level now circa $380,000. This locality is well serviced for schools, shopping and transport, appealing to both investors and owner occupiers alike.
General sales for duplex and triplex parcels reflect values of $190,000 to $240,000 per dwelling site in the Southport CBD area.
In more prestigious areas such as Paradise Point this range is running at $275,000 to $325,000 per dwelling site.
Interstate buyers are purchasing new units, however, typically at levels above local market price points.
Student accommodation has slowed with a recent and apparent slight drop in values. We have not seen any activity on flats, however these are perhaps more tightly held.
Despite recent rate rises signalled by Westpac which may affect the larger city markets, values on the Gold Coast are still comparatively low and appealing to interstate and foreign buyers. There is still room to improve as Gold Coast was hit very hard after the GFC.
Investors in this area are very active indeed and have been very predominant in this area for nearly a year. The majority of investors are Sydney buyers and to a lesser extent Melbourne buyers for established housing. The new housing is targeted by a mix of interstate buyers from all over Australia and Chinese buyers.
Established housing investors are mostly active in Eagleby and Beenleigh areas with price points around $240,000 achieving circa $320 per week rent or 6.93% yield.
New housing investors are mostly active in Pimpama and Ormeau where the price point for a typical 4-bedroom, 2-bathroom, 2-car house on a 400 square metre lot is between $460,000 and $480,000 achieving circa $420 per week or 4.55% yield.
Investors in the upper north area are far less active in the townhouse and duplex unit market, accounting for only a very small percentage of sales. We are of the opinion that investors prefer housing due to historically stronger capital growth compared to units.
We believe that the investor activity is sustainable in the medium term with interest rates currently at record lows. Sydney investors can’t stay away in particular with the median house price in Sydney over $1 million. This shows that these investors can buy four houses for the price of one Sydney house.
Whenever banks tighten lending policy it will have an impact on the market, but how much impact is a case of let’s wait and see.
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.
"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"
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.
The market for attached townhouse/villa and apartment product on the Gold Coast has steadily improved over the past two to three years. While initially, this improvement was focused on established, resale stock as these market segments improved, we have also seen improved demand shown for new unit product, particularly for new townhouses and apartments priced below $500,000.
Furthermore, while new home unit product on the Gold Coast continues to be mostly purchased by investors at price levels which are considered to be high based on local comparable market resale evidence, the firming in the established markets, has to some degree, started to bridge the gap between new and second hand dwellings. This has had a resultant positive impact on the settlement risk for ‘off the plan’ sales, with most project marketing agents reporting of reduced ‘fall over’ rate for pre-sale contracts over the 2014 and first half of 2015 period.
Local real estate agents confirm that prevailing conditions in most market segments on the Gold Coast are buoyant, reflecting improved levels of demand, increased sale volumes, shorter selling periods, reduced stock availability and upward pressure on sale price levels.
As a reflection of the favorable market conditions, there are a number of new medium and highrise apartment projects currently being marketed on the coast, and most specialist marketing agents are reporting of good sale volumes for product priced below $500,000 and that there has been price growth in recent releases over the past six to 12 months. The concern now lies as to the number of projects which are proposed and as to whether the demand will continue to sustain the potential future supply of new product.
In the established market segments, potential opportunities still appear for resale residential apartments in central beachside locations between Burleigh Heads and Main Beach, particularly for highrise stock in large yield buildings. The reality being that the sheer volume of resale stock that can be on the market at any one time in these high density suburbs, or in a particular building, can keep a ceiling on price levels, despite the surging detached housing market in the same areas.
These areas all benefit from excellent location attributes and amenity and typically provide resale units with good size floor areas and at a lower price point (both quantum and on a rate per square meter), when compared to the price levels for smaller new apartments in buildings currently being marketed for sale ‘off the plan’.
Over the past two to three years, there has been a large focus on medium rise apartment buildings n the Southport CBD following the release of the streamlined Southport PDA approval process. This has led to a larger volume of approvals being issued for Southport, some of which are for very large yield highrise buildings. While development to date has focused on smaller projects, where demand appears to be adequately absorbing supply, there is a degree of concern to the overall volume of approved stock that potentially could be brought to the market if a number of the approvals were acted on. Hence, future supply levels and sale volumes for new apartments in Southport could be an area to keep an eye on.
We note, however, that there are a large number of 100 plus apartment highrise projects approved within the Southport PDA area and that a proportion of these have been obtained by ‘speculators’, with the intent to on sell the approved site, likely to overseas interests. To date, we have seen only limited local developers or lending institutions show an appetite for these larger scale developments in Southport, and the reality is that while a larger potential supply of apartments is approved for Southport, a number of the proposals, may in fact, not be acted on in the current development cycle.
In the improved market, there has been a noticeable increase in the number of proposed fringe residential apartment projects in areas which are traditionally regarded as more suburban low density housing locations. These projects are predominantly
being developed in multiple low and medium rise apartment buildings where construction can be staged in 12 month construction phases, and produce new units at lower prices. These projects have generally met with good sale results, particularly for the central periphery areas of Varsity Lakes, Robina, Bundall and Harbour Quays, which benefit from significant existing amenities, shopping facilities and transport infrastructure.
We comment that a large portion of new apartment projects on the Gold Coast are progressively providing smaller apartment product when compared to historical standards, in an effort to suit changing market preferences with a greater focus on lower price points.
Interestingly, while we have seen a significant recent increase in the emergence of new apartment projects released on the Gold Coast over the past 12 months, there has been limited new medium density projects appear in the market. However, the absence of new released townhouse/villa development is not considered to be an indication of a slowing market. Rather, the market for new medium density dwellings has been strong over the past few years, however the now very limited supply of townhouse development sites, coupled with the increased appetite for new apartment product in established residential areas, has resulted in a limited pipeline of new projects.
Of those projects which have been released in the market, most are situated in Robina, Carrara and Hope Island and provides new units priced greater than $450,000 and mostly, in excess of $500,000. In the very low interest rate environment, this product appeals to both investors attracted to the good rental returns and also, to owner-occupiers who have been increasingly priced out of the detached housing market. Furthermore, a number of new releases within these projects have sold out ‘off the plan’, prior to construction being completed.
The majority of new construction on the Gold Coast is within the growth region from Hope Island north to Beenleigh and west to the Scenic Rim.
Generic project housing varies in price firstly as a result of who the client is and then by the quality of inclusions. Traditional project home companies generally provide better value than house and land investor packages, but not always. Valuation of off the plan housing can be a minefield as rates for very similar products can range from $1,100 per square metre to over $1,600 per square metre. At the end, the valuation assessment (including the land) relies on sales evidence of similar nearby houses, with an allowance made for age and condition.
Looking back to the costs discussed in the 2009 Month in Review, building costs do appear to have increased at the lower end of the scale, but perhaps not a great deal for the prestige and higher quality market.
In Helensvale, estates such as River Links and The Peninsula have been established over the past ten years and most of the vacant sites remaining will be developed in the next few years.
These estates have building covenants which attract architecturally designed and quality project packages that range on a rate per square metre basis from $1,100 to $1,700 for living area. These dwellings will mostly feature attractive mixed cladding, stone benchtops throughout, ducted air-conditioning and often leave landscaping and pool packages outside the building contract.
These estates have smaller lot sizes ranging from roughly 300 square metres to 600 square metres and therefore attract investors, project builders and turnkey packages.
These building contracts are typically $200,000 to $275,000. Floor plans are usually compact 3-bedroom plus study or 4-bedroom, with bathroom, en suite, double garage and small covered patio. Ground improvement inclusions are basic fencing, aggregate driveway, turfed lawn and water tank. The rates per square metre of living are generally $1,000 to $1,200 which has crept up from our previous review in 2009. Builders and developers have reported that the cost is generally higher due to raw materials costs and green compliance.
Far Northern M1 Corridor
There are numerous new estates in the far northern corridor between the Gold Coast and Brisbane with vast quantities of new dwellings under construction. The suburbs where most of this construction is underway include Ormeau, Ormeau Hills, Pimpama, Coomera and Holmview.
Most dwellings in these suburbs fall into two categories, being either investor stock or owner occupier properties. Investor properties typically comprise a 4-bedroom, 2-bathroom onground dwelling with a double lock up garage and usually have a more average standard of fitout, ie laminate benchtops and cupboards and brick exterior. Building rates per square metre vary widely with some builders taking advantage of unsuspecting investors purchasing properties sight unseen. Costs can range from between $1,000 per square metre to $1,300 per square metre of living area for very similar constructions. Trends worth noting in this investor section of the market are that specifications are starting to upgrade with stone benchtops and render to the street front aspect of the dwelling becoming more commonplace. Additionally dwellings and lot sizes are becoming smaller with the smallest known allotment available being a 213 square metre block in Holmview.
Owner occupier properties, as expected, tend to have a higher level standard of finish with property owners opting for features such as ducted air conditioning, stone benchtops, high ceilings and good quality light fittings. Building rates per square metre are more alike for dwellings built for owner occupation which may point to property owners shopping around and comparing prices from more than one builder. Most dwellings constructed by owner occupiers have analysed building rates of between $1,100 to $1,250 per square metre.
There is limited prestige residential locations in the far northern corridor between the Gold Coast and Brisbane other than the estates offering allotments with canal frontage in Jacobs Well and Coomera Waters. The standard of finish increases in these estates with rates per square metre reflecting this and generally falling between $1,300 and $1,400 per square metre.
Building costs have definitely increased since our 2009 edition on the same topic. This edition quotes rates of between $900 and $1,000 per square metre.
North Western M1 Corridor
This area is seeing a number of existing estates releasing new stages and the emergence of new estates. Existing estates with new stages include Riverstone Crossing (Maudsland), Highland Reserve and Coomera Springs. These estates are showing consistent land value increases, particularly Riverstone Crossing. Park Central at Oxenford is a new estate on Kopps Road which has reportedly nearly sold out, predominantly to investors.
New dwellings are being purchased by owner- occupiers and investors alike. For owner occupiers build rates tend to show $1,000 to $1,250 per square metre for a turn key product. Build rates for the larger building firms who offer inclusions such as stone benchtops and air-conditioning remain competitive and within market parameters. Higher levels of inclusions tend to be at the higher end of the scale sometimes even reaching $1,300 per square metre depending on where or in which estate the proposed dwelling is situated. Features such as ducted air conditioning become the norm at this level.
Build rates for investor stock tend to vary greatly between builders. Asking rates tend to range between $1,000 and $1,500 per square metre, some of which are well beyond market parameters. There are often significant differentials between levels of finishes and standards of inclusions which is often attributed to the product being sold to investors. Generally rates adopted for brick and tile entry level dwellings as a turn key product are valued at circa $1,000 to $1,200 per square metre depending on size. An as if complete duplex pair was recently valued at circa $1,050 per square metre of living area which is very competitive. In this area, there is very limited upper end product hence build rates would rarely be expected to top $1,300 unless in exceptional circumstances.
Build costs have increased since 2009 at a fairly consistent rate. It was generally accepted that during the GFC it was land values, rather than build rates which declined. There is still evidence suggesting that people are purchasing existing product below replacement cost.
Southern Gold Coast and Tweed Coast
There are a number of new and developing residential estates on the Tweed Coast at present, and a very small number on the southern Gold Coast. The majority of new construction is in the Casuarina and Kingscliff/Salt precinct in which the majority of properties are to be owner occupied or holiday lock up style homes. Land prices are very strong and in some cases, prices have almost doubled in value since 2012.
For a basic, single level, brick and timber dwelling with metal or tiled roof construction you are looking at a cost of approximately $1,100 to $1,300 per square metre on a gross floor area basis, with project home builders such as GJ Gardner, Perry Homes etc. This cost obviously increases with a higher quality of finish. For $1,100 to $1,300 per square metre, you
are looking at laminate cabinetry, stone benchtops to kitchen, laminate benchtops to bathrooms, split system air-conditioning and other basic modern fixtures.
Builders constructing a higher end product are charging much higher rates, in the vicinity of $1,600 to $2,000 per square metre on a gross floor area basis. This may be for an architecturally designed dwelling with voids over living areas, high raked ceilings, ducted air-conditioning and high quality inclusions.
New luxury housing construction is on the rise. This is occurring as demolition and rebuild in the central waterfront suburbs of Paradise Waters, Isle of Capri, Broadbeach Waters, Palm Beach, or the beachside at Mermaid Beach.
These attract owner occupiers who, with leading architects, design and construct luxury homes ranging in size up to 1,100 square metres. Many of the houses are full concrete construction with basement carparks. Breakdown of building contracts analyse from a low of $1,600 to $4,000 per square metre for the living areas. Generally, construction rates per square metre have not increased markedly over the past five years due to less demand.
With two satellite cities in the area, Yarrabilba and Flagstone, and the release of the new master planned community of Oakdale Estate at Beaudesert, the Scenic Rim and Lower Logan area is going through a construction boom at the moment. These types
of estates give rise to the standard project builder, however over recent years, the stereotype of a basic, run of the mill house at a fixed rate has changed dramatically.
There are two distinct levels of project builders in these estates. The first is the investment product builder who offers a standard level of finishes typically being basic stone benchtops, stainless steel appliances, ceilings fans, two split system air conditioners and a full turn key product including landscaping, fencing and driveway. Rates per square metre for this style of dwelling typically range from around $1,000 to $1,250 for living area depending on the size of the dwelling and site issues (such as small lots where materials need to be walked in by the trades).
The second project builder is now moving more in to the custom range type of construction. While still offering good rates per square metre and a base series of plans to choose from, the end product is definitely determined by individual taste and budget. Buyers have the option to finish the house themselves with their choice of carpet, main floor area tiling, landscaping and driveways or have the builder complete a turn key product. These dwellings are typically larger than the investment product with more features such as high ceilings, stacking or bi- folding doors to external areas and better quality of finish. The economy of scale kicks in here, with these builders being able to offer a customised product at not much more than a project builder due to the larger living area sizes and the benefit of bulk buying power and negotiation with suppliers. Builders that fit into this category typically have a good presence in the display villages.
Moving on to the more established areas, there tends to be the emergence of the custom builder for second, third and above home buyers who know exactly what they want in their home and want the ability to deal directly with the builder through each step of the process. These homes are typically larger and well appointed with good quality fittings and more creature comforts such as fireplaces, polished timber floors, high ceilings with architectural features, top of the range appliances and an individual look and feel. Rates per square metre vary significantly in this category as some of the project builders are beginning to offer a more customised home for around $1,500 per square metre, but can be in excess of $2,000 per square metre depending on the features and inclusions.
For example, a custom built, midset, Hardiplank and Colorbond, Colonial reproduction 3-bedroom, 2-bathroom home of 188 square metres of living, 38 square metres of outdoor and deck and a 40 square metre garage was contracted at $444,760 and included water tanks and sewerage system. This equates to a rate of around $2,000 per square metre. For a project style, two level, brick and Colorbond home with 4-bedrooms, 2-bathrooms and 271 square metres of living, 33 square metres of outdoor area and a 37 square metre double garage was $385,117 and excluded floor coverings, water tank and sewerage system. This contract equates to a rate of $1,250 per square metre of living area - a lot more home but without the inclusions of the custom builder.
Across the southern Gold Coast and in northern New South Wales there are opportunities for investors and owner occupiers to purchase property in the $500,000 price range. The areas with the greatest demand are Burleigh Waters, Miami, Palm Beach, Elanora, Salt and Casuarina. These suburbs are well located close to amenities and the beach. The areas should offer reasonable growth if held for the long term. An example of short term growth is a property located at 7 Kelburn Close, Banora Point which sold in March 2014 for $527,000 in below average condition. The dwelling has been partly renovated since sale date (new bathroom and general tidy up works completed) and is currently under contract for $665,000 as at May 2015.
Perhaps you’re looking for return on your investment like so many interstate investors of late. In the southern Logan market around Beenleigh and Eagleby, for a lazy $500,000 you can buy yourself not one but two investment properties. Here are a couple of very recent examples:
43 Temma Street, Eagleby is under contract as at June 2015 for $240,000 in fair condition. Property comprises a basic, on ground, circa 1984, brick and metal roof dwelling with 3-bedrooms, 1-bathroom and 1-car carport with a tenant currently paying $310 per week.
25 Chapman Drive, Beenleigh sold in May 2015 at auction for $250,000 in fair condition. Property comprises a basic, on ground, circa 1984, brick and metal roof dwelling with 3-bedrooms, 1-bathroom and 1-car carport. Agent advises tenant will happily pay $320 per week. For a total purchase price of $490,000 you get a gross yield of 6.68%. Not bad!
Recent market activity has seen some suburbs which may have previously been overlooked for some owner occupiers, increase in value to figures above 2007/2008 price levels. For example 61 Macquarie Avenue, Molendinar was purchased for $550,000
in November 2008 and has recently gone under contract for $610,000 in largely the same condition. Other similar suburbs that have recently seen a jump in entry level prices include Coombabah and Helensvale, with first home buyers (in most cases) having been pushed further out, away from more central and coastal suburbs.
Another example of market movement can be seen in the recent sale (under contract) of 8110 Magnolia Gardens Court, Hope Island, being an attached townhouse with golf course frontage, for $478,000 having last sold in September 2013 for $425,000 with only some light refurbishment in between.
Local agents are consistently reporting having more potential purchasers than properties to sell, which poses the question... Where to next for first home buyers? Eagleby perhaps.
Labrador offers good opportunity for investors with some 2-bedroom, 1-bathroom walk-up style units selling in the early to mid $200,000 range and being let for over $300 per week, often in original condition and within walking distance of the Broadwater.
There has been considerable improvement in property values for residential property in the more central areas of the Gold Coast over the past 12 months. With this firming in the market, the opportunities to buy a freestanding dwelling on 500 square metres of land for around $500,000 or less within well-located suburbs such as Benowa, Mermaid Waters and Robina are now becoming extremely limited. Local real estate agents are still reporting strong levels of demand for this type of residential property and stock levels are very low which has inevitably put upward pressure on property prices. Investing in entry level detached housing in this price range in the central suburbs of the Gold Coast has always been a solid option.
Examples of detached housing which have sold for $500,000 or less in the past couple of months include:
1 Chadstone Place, Robina sold in March for $500,000. Comprises a single storey, circa 1990, brick 3-bedroom, 2-bathroom dwelling with 2-car garage. Updated bathroom and pool. Land area of 482 square metres. Previously sold in September 2012 for $425,000;
10 Piccabeen Close, Robina sold in March 2015 for $490,000. Comprises a single storey, circa 2001, rendered brick 3-bedroom, 2-bathroom dwelling with double lock-up garage. Land area of 517 square metres. Previously sold in January 2013 for $415,500.
135 Bamboo Avenue, Benowa sold in May 2015 for $425,000. Comprises a small, single storey, circa 1980, brick 3-bedroom, 1-bathroom dwelling with 1-car carport. Original kitchen and bathroom. Land area of 598 square metres.
With increasingly limited reasonably priced opportunities available for detached housing in the central areas, buyers will be required to negotiate quickly or will be forced to look into a different property type such as a townhouse or villa.
Townhouse units or villas in the central parts of the Gold Coast are still considered to be good options provided that the associated body corporate costs are relatively low. Local agents advise that these properties are also in good demand and stick levels are relatively low, but buyers will likely find it much easier to find an opportunity at less than $500,000, which still offers good capital growth potential and a sound rental return.
Examples of townhouses or villas which have sold for $500,000 or less in the past couple of months include:
23/103 Salerno Street, Surfers Paradise sold in February 2015 for $407,000. Subject property comprises a two level, circa 2000, 3-bedroom, 2-bathroom townhouse and 1-car garage and 1-car carport. This is a gated complex with various facilities. Previously sold in June 2009 for $420,000.
56/7 Elliott Street, Surfers Paradise sold in January 2015 for $435,000. Comprises a two level, circa 2001 4-bedroom, 3-bathroom townhouse with 1-car garage. This is a gated complex with various facilities. Previously sold in December 2012 for $395,000.
28/34 Albicore Street, Mermaid Waters sold in February 2015 for $490,000. Comprises a single storey, circa 2000, 3-bedroom, 2-bathroom villa with 2-car garage. This is a gated complex with common swimming pool.
Overall it is quite clear that market confidence has picked up again and with interest rates still predicted to remain low, property investment on the Gold Coast should provide a solid option for those owner occupiers or investors willing to spend a lazy half million.
The Gold Coast was one of the hardest hit regions of Australia following the GFC, with mortgagee in possession sale rates running above 6%. With the world financial situation, banks tightening their lending and LVR parameters, the Australian dollar soaring in value, the commodity boom and tourism being particularly hard hit, the perfect storm was unleashed.
However, that all seems to be well behind us now as the property market has recovered and turned upwards. Prices are well off the bottom across all residential property categories. Land values on the Gold Coast are reported to have increased by 10.7% over the past year according to the Queensland Valuer General’s 2015 annual report dated 5 March 2015.
Very positive economic changes have been driving the property market on the Gold Coast including:
• Increasing population. Current Gold Coast population is now at 535,000 (source: Gold Coast City Council web site) with projections of a population of circa 680,000 by 2021 (source: Queensland Office of Economy and Statistical Research Population Prediction Report dated 2011).
• Tourism is back stimulated by the lower Australian dollar and strengthened by new international flights direct to China and other parts of Asia.
• Increase in building development and infrastructure projects.
• Increase in number of new homes being built and apparent increase in number of substantial renovations of dwellings.
• Increased international investors including the very influential and growing Chinese investment market and cashed up Auckland based Kiwis.
• Increased interstate buyers with many cashed up investors from the very buoyant Melbourne and Sydney markets.
• Predictions of improving employment in the tourism sector and also boosted by the impending 2018 Commonwealth Games.
The increase in volume of transactions is particularly evident since the September 2013 federal election. According to our data, purchasers still favour the sub $500,000 price bracket which accounts for 71.5% of transactions, compared to 23.5% for $500,000 to $1 million and 5% over $1 million. While the prestige residential market proportionately accounts for a small part of the market in terms of number of transactions, the prices are on the rise on the back of overseas investors, locals and interstate buyers taking a shine to mostly waterfront houses and a limited number of luxury high rise units. Examples of sales in 2015 include:
123 Albatross Ave, Mermaid Beach $4,100,000
93 Hedges Ave, Mermaid Beach $5,600,000
25 Hedges Ave, Mermaid Beach $5,000,000
13 Oceanview Easement, Mermaid Beach $3,560,000
1 Surf St, Mermaid Beach $8,420,000
129 Jefferson Lane, Palm Beach $3,750,000
201 Monaco Street, Broadbeach Waters $5,800,000
247 Monaco Street, Broadbeach Waters $3,000,000
102 Amalfi Dr, Isle of Capri $3,300,000
36 Southern Cross Dr, Cronin Island $3,350,000
98 Admiralty Dr, Paradise Waters $3,200,000
25 Buccaneer Ct, Paradise Waters $3,600,000
117 Commodore Dr, Paradise Waters $6,600,000
37 Norsemann Court, Paradise Waters $3,000,000
31 Hampton Court, Sovereign Islands $4,000,000
64 The Sovereign Mile, Sovereign Islands $3,400,000
46 Shearwater Esp, Runaway Bay $3,490,000
100 Regatta Pde, Southport $3,100,000
Nirvana by the Sea Penthouse, Coolangatta $3,755,000
Liberty Pacific Penthouse, Main Beach $3,300,000
Soul Penthouse, Surfers Paradise $7,000,000
CENTRAL GOLD COAST
Growth has been solid throughout 2015 in the central areas of the Gold Coast as a result of increased demand across all property types within the area. The main reasons for this increased demand include the reduction of interest rates, improvements in rental returns and increased overseas investments in new developments.
Broadbeach Waters, Mermaid Beach and Mermaid Waters have seen strong growth (25% to 35% increase in land values). An example of this is 145 Allambi Avenue, Broadbeach Waters which sold for $760,000 in August 2013 and was recently resold for $1,015,000 with no improvements to the property.
The unit market in Broadbeach and Surfers Paradise has seen improvement in the lower price points in smaller developments. Most of these sales were to local and interstate investors as the rental returns were covering mortgage and body corporate costs. The larger high rise developments are still seeing limited growth due to the high body corporate rates restricting the overall investment appeal. We should see increased growth in holiday units as building managers are reporting a decrease in vacancy rates as more tourists come to the Gold Coast.
Robina, typically a popular location for young families, has also seen strong growth as it is within close proximity of amenities such as schools, shopping centres and transport. In recent months demand for rental properties has increased and vacancy rates have dropped as more construction jobs are available on the Gold Coast due to new developments. For example the average townhouse rental rate has increased $20 to $30 per week across all developments.
The majority of new developments across the central areas are showing high sale rates with developments like Sunland’s Concourse Villas/Marina Residences and Robina Land Corp’s City Village and Riverlilly selling out within a few months. The majority of buyers have been overseas investors, although we are seeing an increase in owner occupiers looking to downsize from the family home and first home buyers.
NORTHERN COASTAL (SOUTHPORT TO HOPE ISLAND)
This year the Northern Coastal area has performed very well to date. Sales agents continue to report a general lack of sales stock with improved buyer activity putting upward pressure on values. Notable changes have been a significant reduction of time to sell with many listed properties selling within just a few days. Some properties are selling sight unseen by interstate investors, something not seen since the 2007 boom period and we are also seeing multiple offers and properties selling prior to auction. The strongest performing property categories have been:
1. Vacant residential allotments;
2. $800,000 to $1,500,000 market range; and
3. Lightly improved sites with development potential.
In one Hope Island residential estate, 500 square metre allotments that were selling for circa $250,000 are now selling for circa $290,000. Vacant allotments have jumped circa $100,000 in some of the more in demand canal estates. The traditionally more popular suburbs, generally those close to the Broadwater and Canal Estates, have been the best performers with increases estimated to be as much as 15% to 20%. The $400,000 to $600,000 range for the more typical family suburban style home has performed well. Two and three bedroom duplex units have also been in good demand. The unit market between circa $180,000 to $450,000 range appears to have improved, however, not as well as other sub market categories as stock levels remain high in some buildings. The unit market above $500,000 in the Broadwater precincts has lifted strongly with some complexes showing recovery of as much as $100,000 per unit. We note that property managers are reporting that they are now increasing rentals on properties as vacancy rates fall and demand increases. In some cases we have had reports of as many as 50 rental applications for a single property. Some of this demand has been within the more popular school zones.
We further note that the mainly established Northern Coastal property market will continue to strengthen due to the scarcity of land and influences of higher density town planning. The short term outlook is very positive.
M1 NORTH-WEST TO MOUNT TAMBORINE
Throughout the first half of 2015 the property market in the north-western Gold Coast, also known as the growth corridor continued to strengthen with agents generally reporting a shortage of stock and strong buyer activity.
Modern dwellings close to infrastructure such as schools and shopping centres appear to be the best performing. Notable estates include Highland Reserve, Riverstone Crossing and Coomera Springs. These estates all comprise predominantly modern dwellings of above average quality with good surrounding infrastructure. Prices in these estates range from $450,000 to $600,000 with an average increase in value over the past 24 months of approximately 10% to 15%.
Vacant land also appears to have strengthened throughout Upper Coomera and Maudsland with land becoming scarce. The more popular estates include Riverstone Crossing, Stone Creek, Coomera Retreat and Highland Reserve.
A notable sale is 16 Murray Circuit, Upper Coomera. This is a vacant 604 square metre allotment which sold mortgagee in possession on 27 August 2012 (arguably the bottom of the market) and is currently under contract for $202,000. This is a reflection of the increasing demand for vacant allotments.
Mount Tamborine appears to have stabilized with an increase in the volume of sales, however there has been no notable increase in values. These types of regional areas generally appear to have a bit of lag in market segment conditions compared to the local markets.
House and land packages remain the most concerning segment. Inferior quality estates in Upper Coomera and Pimpama continue to see large volumes of interstate investors paying a premium for new product. We are also seeing very small lot sizes in these areas (as small as 250 square metres). This product is relatively untested with little to no re-sales to gauge how this style of product will be viewed by the local market.
UPPER NORTHERN CORRIDOR
The first six months of 2015 was generally considered a positive period for the upper northern corridor. Investors have continued to increase their appetites for house and land packages within recently established residential estates. To fulfil this appetite, developers have decreased lot sizes as evidenced in the new stages of The Meadows at Pimpama and Yarrabilba at Yarrabilba, with some lot sizes below 250 square metres. On the other side of the spectrum residential estates such as Gainsborough Greens at Pimpama and Ormeau Ridge at Ormeau Hills have retained lot sizes or only marginally reduced sizes due to these estate attracting a higher percentage of owner occupiers.
Recent sales include:
• 6 Leland Street, Yarrabilba: 250 square metre allotment that sold for $110,500 in January 2015.
• 38 Leland Street, Yarrabilba: 250 square metre allotment that sold for $110,500 in January 2015.
• 13 Matas Drive, Pimpama: 300 square metre allotment that sold for $188,500 in January 2015.
Although there have been no settled sales within Pimpama of allotments below 250 square metres it is present within the new stages.
Values of rural residential properties in the upper northern corridor have remained stable within the first six months of 2015. A number of real estate agents in the area have complained about lack of stock on the market or set to go to the market.
Owners of rural residential properties in the area are optimistic about changes to upcoming or recently implemented planning schemes; there is optimism that some areas within the historically rural residential only areas could see a reduction in the required lot size per dwelling, therefore increasing the potential to subdivide or construct an additional dwelling on the lot.
Rental amounts in the area remain steady as infrastructure is being approved, on the drawing board or is currently under construction. An example of this is in the Yarrabilba Estate, with the planned kindergarten currently under construction and the recent sale of the school site and shopping centre site. The development of amenities such as these should increase rental amounts in the direct vicinity.
If the first six months are anything to go by, the upper northern corridor will continue to grow in terms of number of dwellings, however there is potential that a trend to decrease allotment sizes will continue and in turn increase the developer’s gain.
Established residential suburbs in the upper northern corridor including Eagleby, Edens Lands and Mount Warren Park have continued to attract owner occupiers. Real estate agents in these areas are noticing reduced time on the market if the property is reasonably priced. Beenleigh is considered the central business district of the upper northern corridor and has historically remained a sleeping giant for the area. The Beenleigh Town Centre has continued to attract foreign and interstate investment with high purchase prices being noted and purchases of multiple neighbouring properties.
SOUTHERN GOLD COAST AND TWEED COAST
In 2015 there has been a continued improvement in the residential property market across most but not all sectors.
Vacant land has perhaps been strongest with the majority of estates having been sold out or close to selling out. There is reportedly no developer stock available at Casuarina and very strong resales.
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 approximately $395,000. There has been an improvement in prices for vacant land at 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 at 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. In many cases sales evidence is not directly supporting new sales, particularly on the Tweed Coast.
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 or villa units in small complexes. There is currently a new duplex unit under contract at Palm Beach for $800,000, with very limited sales evidence to support this sale price.
Sales activity and market demand for low rise units in the under $400,000 price bracket is average. There has recently been some strong sales activity for low rise units along The Esplanade at Burleigh Heads. There have also been some gains in well located high- rise units. There is a 2-bedroom, 2-bathroom unit in the rear Ambience building at Burleigh Heads under contract for $730,000, which previously sold in June 2011 for $625,000.
Caution remains for low rise and high rise units in larger, older buildings in secondary locations where high body corporate fees may apply. Local agents are reporting limited levels of demand for these properties.
There are a number of positive factors currently influencing the property market on the Southern Gold Coast and Tweed Coast including historically low interest rates, population growth and improvement in the local economy.
Overall, the prestige market on the Gold Coast is tracking along okay. Market conditions improved considerably throughout 2014 with a number of high profile properties selling. We have also seen an increase in sale prices compared with the sales occurring in 2012 at the bottom of the market.
Prestige on the Gold Coast varies from suburb to suburb in terms of dollar value. What is considered prestige in the northern corridor would be considered only good quality in the central areas.
We have broken the Gold Coast down into three areas which can be summarised as follows:
The prestige sector in the northern corridor between the Gold Coast and Brisbane is limited to two estates, the already established Coomera Waters in Coomera and the developing Calypso Bay in Jacobs Well. Both estates feature prestige dwellings on canal front allotments with an entry point of approximately $1 million. Presently there is no market for prestige units in the northern corridor.
The prestige housing sector is starting to gain momentum after a long period of quiet activity. Agents are reporting a considerable increase in demand from buyers with house prices starting to reflect accordingly. An example of this is 59 Westward Way, Coomera, a large, high quality, two storey, 5-bedroom, 4-bathroom dwelling situated on a 1,054 square metre allotment with a southerly canal aspect that sold for $1,450,000 on 6 January 2015. The last recorded sale for this property was $1.25 million in August 2013.
There has been considerably less sales activity in Jacobs Well, however the highest recent recorded sale of a prestige dwelling was in the Calypso Bay estate with 93 Marina Parade, Jacobs Well achieving $1.69 million on 13 June 2014.
The current record low interest rates in conjunction with an increase in market conditions in the low to mid range of the market can be seen as contributing factors in the increase in value and activity in the prestige sector in the northern corridor.
If market conditions remain as they currently are, it can be predicted that the prestige housing sector of the northern corridor will continue to see an increase in sales volumes and value. As developed estates such as Coomera Waters run out of vacant land, buyers are starting to construct more dwellings in the Calypso Bay estate.
To sum up, the not too distant future is looking good for both of these estates.
Central Gold Coast
The prestige market on the central Gold Coast has continued to strengthen from the bottom of the market in 2012. Properties that are receiving the most attention are modern dwellings built to a high standard in areas such as Surfers Paradise, Broadbeach Waters and Mermaid Beach. Sales activity over the past 12 months for these central suburbs has seen prestige dwellings selling from around the $2 million mark up to $7 million.
A notable recent sale is 117 Commodore Drive, Surfers Paradise, which went under contract in March this year for $6.6 million.
The types of property demanding these high prices are ones that are located either on the Nerang River, have a wide canal frontage with a favourable aspect or have beach frontage, such as properties located along Hedges Avenue in Mermaid Beach.
The prestige unit market on the central Gold Coast has also seen an increase in market activity after the market bottomed in 2012. Prestige units can commonly be found in Surfers Paradise, Main Beach and Broadbeach. Although the unit market is seeing increased activity we do notice the property still needs to be priced competitively to achieve a sale. The type of unit you would typically expect to buy in the prestige market would be a penthouse or sub-penthouse, a unit located in a development with beach frontage or units that occupy a whole floor. Selling prices achieved during 2014 and into 2015 for prestige units have been around the $1 million to $3 million mark.
Two notable recent sales include:
4701/1 Oracle Boulevard,Broadbeach.This unit is one of the sub-penthouses in the modern development known as The Oracle at Broadbeach. The property sold in November 2014 for $3 million. This property was originally sold by the developer for $4,390,000 in October 2010.
The Soul penthouse in Surfers Paradise recently sold for $7 million. The unit was stripped back to a shell so the purchaser could fit it out to their specification. The unit was initially under contract for $16.85 million in 2006 however this sale fell through.
You may ask yourself who is buying all this nice property? We are generally seeing a mix of overseas, interstate and local buyers. For new construction overseas buyers (especially Chinese) are still prominent and the interstate and local buyers are generally looking for property that fundamentally shows good value.
Looking ahead for the prestige market, the movement of interest rates and the level of supply will play a critical role in the overall performance. Interest rates are currently low, supply levels are decreasing and buyer demand is on the up, so as
a result we are seeing the top end of the market move more strongly into the recovery phase of the property cycle.
Southern Gold Coast/Northern New South Wales
The prestige market on the southern end of the Coast is showing positive signs of recovery after a tough few years. We saw value levels and market conditions fall sharply through 2011 and 2012 and appeared to bottom out at the end of 2012.
Typically the prestige houses are located on the beachfrontinthesepartsandincludePalmBeach, Currumbin, Tugun and Bilinga where $2 million plus would be classed as prestige. A notable sale was 14 James Street, Currumbin which recently sold for $5.1 million after being listed for sale for over 12 months. The property last sold for $8.2 million in February 2010.
Prestige units are also found on the beachfront however also include Kirra, Coolangatta and Tweed Heads (Rainbow Bay) where $1.5 million will buy you a large 3- or 4-bedroom unit of circa 200 square metres. A notable unit sale was by a Mr Robert Slater or more commonly known as Kelly Slater who recently purchased a beachfront unit in Palm Beach for $2.15 million. For privacy reasons, we will keep the address a secret.
We have seen a lot more positivity in the prestige market with a lot more buyer confidence. As you can see from some of the sales, we are still quite a way off value levels which were being achieved between 2007 and 2010 however things are looking up. If interest rates stay where they currently are throughout the year then there is no reason why 2015 should not be a better year than 2014.
There are a number of current residential land estates available for buyers in this area including Miramar and Seaside estates at Casuarina/Kingscliff, Seabreeze and Black Rocks at Pottsville, Palm Beach Heights at Elanora and The Observatory, Kingsmore and Varsity Heights estates at Reedy Creek.
Each estate offers a different style of product and prices have strengthened in each of the estates over the past 18 months. Agents who market properties in the estates now have a shortage of supply and increased demand for the land.
For example, there were a number of sales of vacant allotments (non beachfront) in Casuarina in 2012 and 2013 in the early to mid $200,000s, however the reduced stock available (significant construction at present) and increased demand have seen prices rise towards the $400,000 mark (some selling above).
A sale of note is 35 Daybreak Boulevard at Casuarina which is a beachfront parcel of 945 square metres. It was sold from the developers (Villa World) in January 2014 for $625,000 and re-sold in November 2014 for $775,000, a price hike of $150,000 in 11 months (24% increase within a year)!
On the southern Gold Coast, there is a new developing residential estate at Tallebudgera known as Hidden Valley which is relatively small (only 25 lots of 600 square metres), however, this is the first A type subdivision in many years as the majority of surrounding properties are on allotments greater than 2,000 square metres. Lots are selling quickly in the estate and the majority of buyers are from the local area. In regard to infill land markets in the southern Gold Coast patch, there is a limited number of opportunities remaining and the only option is to head west.
Most of the central and western areas of the Gold Coast are established areas with very few sites available. The biggest new estate in this area is the Gilston Green estate. Prices there two years ago were stable at around $200,000 up to $230,000 for local buyers. Non-local investors were paying $245,000 plus for the land portion of a house and land package.
Since late last year the market has strengthened with locals competing with non-local investors and prices now start at around $255,000. A new residential precinct within the Royal Pines Golf Course Estate at Benowa has recently commenced marketing, offering single residential and duplex sites. Our office has so far valued only one duplex site of 588 square metres under contract to a Chinese buyer for $540,000 which was not supported. This site backs onto a new supermarket currently in the initial stages of construction with the earthworks started. Previously duplex block sales were achieving around $520,000 for 800 square metres in a superior position within the estate.
Up in Pacific Pines we are seeing new estates selling house and land packages to mainly foreign investors. The land is selling for between $225,000 and $235,000 which is at local market levels. We note that construction costs for the improvements have been analysed out after making allowances for garaging, patios and ground improvements to over $1,600 per square metre of living area for a single level brick dwelling which is excessive and should be around $1,100 per square metre.
Heading further north to Pimpama and two of the major estates are Meadows and Gainsborough Greens. Sales activity has skyrocketed over the past six months in these estates as market conditions continue to improve and as infrastructure in the area is also improved.
Mid last year land in these estates was selling at around the $200,000 mark for a 450 square metre allotment however we have seen an increase in prices of between 5% and 10% over the past 12 months.
Buyers in the area are a mixture of investors and owner occupiers however we are seeing mainly owner occupiers buying up in the Gainsborough Greens estate.
Residential land on the Gold Coast is one of the better performing sectors of our market. Sales activity has improved and value levels have also risen. Record low interest rates and the return of southern migration has only helped this market segment and hopefully it continues just as strongly through 2015.
% of sale volume
0 - $300,000
$300,001 - $500,000
$500,001 - $750,000
$750,001 - $1,000,000
$1,000,001 - $1,500,000
% increse of sale volume 2014 vs 2013
0 - $300,000
$300,001 - $500,000
$500,001 - $750,000
$750,001 - $1,000,000
$1,000,001 - $1,500,000