Looking for the best areas to invest on the Gold Coast property market?
The ‘Goldie’ has a lot going for it - not least an agreeable climate and a diversifying economy that has seen it host major international events that has boosted investor confidence and demand for housing in the region.
But can it buck the national trend that has been characterised by tighter availability of credit, specifically the cap on interest only loans implemented by the Australian Prudential Regulation Authority (APRA) and weakening foreign investor activity?
Only time will tell, but bear in mind that the Gold Coast is a distinct market with different conditions to the major capitals. The region’s tourism-driven industry is being helped by a lower Australian dollar - which makes it a cost competitive holiday destination for foreign tourists. Interstate migration to the area - particularly from Sydney and Melbourne, is also driving growth in Gold Coast property prices.
Read on to find out what leading property analysts, forecasters and local real estate agents think is going to happen in the year ahead. But first let’s take a look at what 2018 looked like for the Gold Coast housing market.
What did the property market in the Gold Coast look like in 2018?
According to Louis Christopher's Housing Boom and Bust report Gold Coast dwelling values grew a modest 3 per cent in 2018.
According to McGrath Palm Beach area specialist Andy Hogarth, the Gold Coast property market was a mixed bag in 2018, with pockets of growth and an overall stabilisation in prices. He noticed that macroeconomic factors - specifically tighter lending criteria and the cap on investor lending - has dampened activity in the market.
This has resulted in lower auction clearance rates on the Gold Coast - a trend played out across many other urban centres including Sydney and Melbourne. Despite that, he still recorded good sales over the year and didn’t see any drops in property prices in his area.
"According to Louis Christopher's Housing Boom and Bust report Gold Coast dwelling values grew a modest 3 per cent in 2018."
How are Gold Coast property prices expected to change in 2019?
Property analysts SQM Research do not expect a general housing price crash to occur in Australia in 2019, though like CoreLogic's head of research Tim Lawless, all believe that property values will trend lower next year.
This may apply to the major capitals, but the Gold Coast may well buck the trend, with BIS Oxford Economics forecasting growth of 9.4 per cent over the four years 2017-2020, with just 1 per cent growth predicted for 2019. Low 2018 building approval rates suggest looming undersupply, which will be reflected in lower vacancy rates in the year ahead.
QBE’s Australian Housing Outlook 2018-2021 forecasts overall price growth of 1.6 per cent for the Gold Coast, with projected vacancy rates of 2.0 per cent and forecast growth of 6.1 per cent in house prices. They predict the median house price to be $690,000 by June 2021. This is in contrast with unit prices, which due to a stronger increase in unit completions, are forecasted to be down by 0.8 per cent per annum, with a median price of $425,000 at June 2021.
Tim Zampech, sales consultant at Harcourts Coastal - Paradise Point, believes 2019 will see property prices stabilize on the Gold Coast, “Values will remain stable, but I don’t see a massive sharp rise in property prices happening any time soon. We still have a lot of interest from Sydneysiders and Melbournites looking to move north, looking for a more relaxed lifestyle and affordable property prices - and this will continue to be a factor for our local market in 2019”.
"BIS Oxford Economics forecast growth of 9.4 per cent for the Gold Coast over the four years 2017-2020"
Gold Coast growth suburbs to invest in 2019
If you're looking for Gold Coast growth suburbs to invest in 2019, then there are definite areas to focus your research on.
The Real Estate Institute of Queensland (REIQ) identified close to 70 Queensland suburbs that delivered double digit growth over 12 months to June 2018. Standout performers on the Gold Coast include the suburbs of Hamilton (+32.9 per cent), Hollywell (+30.5 per cent) and Hope Island (+15.7 per cent) - with all figures representing 1 year capital growth.
McGrath’s Andy Hogarth likes his southern end of the Gold Coast where he believes there is lots of activity, solid growth and affordable properties on the market. His top picks are suburbs like Palm Beach, Currumbin Waters and Elanora.
In terms of the big picture, he believes the Gold Coast has diversified economically, “...the Gold Coast has become a stable city. We’re no longer dependent on the tourism industry. We’ve got people moving here interstate for the lifestyle and the new job opportunities being offered. There is also new infrastructure being developed, like the $550 million Gold Coast Health and Knowledge Precinct and M1 upgrade”.
"Standout performers on the Gold Coast include the suburbs of Hamilton (+32.9 per cent), Hollywell (+30.5 per cent) and Hope Island (+15.7 per cent)"
What about the Gold Coast apartment market?
The Gold Coast has almost always experienced an oversupply of units, though currently, this is not the case. Analysts Louis Christopher believes, “...there is no evidence of an imminent oversupply in the (Gold Coast) market...with vacancy rates data steady and listings level.”
In contrast, most capital cities are suffering from localised unit oversupply, with an excess of 315,000 units approved for construction across Australia over the next two years. This has prompted various banks, such as NAB and Macquarie Bank, to issue a ‘blacklist’ of postcodes to be wary of.
In Queensland these are currently limited to Brisbane City, South Brisbane and Fortitude Valley.
Lifestyle factors will continue to make the Gold Coast an attractive holiday hotspot and retirement option, which together with improved health and educational facilities and a diversifying economy, could just see it be a solid investment option for property over the medium term.