Mention of the Gold Coast residential market rarely raises an eyebrow these days, unless there’s a story about a megamillion-dollar sale, or word of more bad karma in the market.
In looking at this market, it is helpful to understand its housing cycle, which is pronounced, and which usually has a six-year frequency.
The region experienced market peaks in 1988, 1992, 2002 and 2008; and downturns in 1982, 1990, 1995, 2000 and 2012.
After almost 30 years in this business, you see patterns emerge. And history usually repeats. Based on past performance, the Coast looks set to have a market peak in 2014-2015, 2020 and 2026; and likely will experience downturns in 2017-2018 and in 2023.
Note the Commonwealth Games due for 2018 will, I believe, have little to no impact on the property cycle.
The seven signs
Data aside, there are tell-tale signs the Gold Coast market, like its Brisbane counterpart, is about to turn a corner. Some of these include:
- Well-priced properties starting to sell soon after listing
- Multiple offers occurring on well-priced properties
- Some properties are now selling above reserve
- Vacancy rates are on the decline and rents are rising
- Fewer well-priced properties for sale – there is a shortage of saleable stock for sale across many parts of the Coast
- Time on the market, as a result, is dropping and, in some cases, sharply
- Intra-state and interstate interest is on the increase
It is apparent the Goldie market has just about bottomed and we are likely to see values grow during 2013 – probably in the vicinity of 5%. But those values might sit there for some time.
An undersupplied housing market
While the Gold Coast’s population could rise by 135,000 over the next 10 years – which suggests the need for 50,000 to 55,000 new dwellings – indicators are the largest growth segments will be first-home buyers and those in their late 60s to early 80s.
Both groups are expected to take up a 25% market share of population growth, and both will be financially constrained.
Although the emerging shape of the Coast suggests the need for more detached housing, there is not enough alternative and more affordable housing types being supplied. These include townhouses, terrace homes, “plexes” and, in some cases, suburban-based, walk-up apartment product.
The irony is the Gold Coast is one of the most undersupplied housing markets in Australia. What is supplied has little demand, and too much of it is focused around lifestyle and discretionary spend rather than on real life. Trends also suggest a need to expand its urban area to accommodate projected population growth.
The region will benefit from an increase in the supply of affordable new housing in locations where permanent residents can afford to buy or rent.
– This article has been supplied courtesy of Property Observer, authored by Michael Matusik.