Revered for its stunning stretches of vast, sunny beaches and desirable lifestyle, the Gold Coast is an attractive real estate destination for investors and migrants.
However, the Gold Coast’s housing market, like the rest of the country’s, has seen a chronic shortage of new property stock.
Simply Gold Coast buyers agent, Tony Coughran, exclusively revealed to The Property Tribune the staggering extent of the Gold Coast’s property stock undersupply.
“You could not build enough over the next five years to satisfy the demand we have for houses and duplexes.”
Tony Coughran, Simply Gold Coast
Although apartment sales have recently been stellar on the Gold Coast, limited supply has also plagued the precincts of the North Shore, Coastal Fringe, and Southern Beaches.
Undersupply, combined with strong population growth, have been just a couple of the factors fuelling the Gold Coast’s property price increases.
According to SQM Research figures, Gold Coast property prices recorded an annual increase of 6.5%.
Gold Coast’s weekly property prices
CoreLogic research director, Tim Lawless, also revealed to the Property Tribune that the median house value in the Gold Coast is now a little over a million dollars at $1,100,288, and the median unit value is $721,417.
The Property Tribune reached out to a range of experts for their takes on the Gold Coast’s 2024 housing market including Coughran; Lawless; Propell Property director, Michael Pell; Knight Frank director of residential project sales, Alison Hedger; REIQ zone chair for the Gold Coast, Andrew Henderson; Christie & Co. Property Group CEO, Michael Christie; and Juwai IQI co-founder and group managing director, Daniel Ho.
Optimism for 2024
Coughran expects that the sub-one million dollar market will be ‘red hot’ in 2024 and that freestanding houses will see a four per cent to eight per cent price increase over 2024.
Knight Frank’s research backs up Coughran’s prediction, estimating a growth of four per cent in 2024 and six per cent in 2025.
“Once you hit the 1.5 to 3.5 million, it’ll slow down a tad, and there could be some isolated buyer opportunity in that range due to some financial pressures,” said Coughran.
“Over and above the $3.5 million league, the prestige end is going to perform strong, especially with well-located properties.”
Tony Coughran, Simply Gold Coast
REIQ zone chair for the Gold Coast, Andrew Henderson, said the Gold Coast real estate market is also primed to benefit from strong migration numbers from southern capital cities, continuing the mid- and high-rise unit development along the length of the coastline.
Knight Frank director of residential project sales, Alison Hedger, also offered a bright outlook for 2024.
“As we head into the new year, weekly rents remain on an upward trajectory, vacancy remains chronically low, and established residential prices continue to surge as more people make the Gold Coast home,” she said.
“New residential construction was interrupted by a shortage of builders impacting the delivery of new homes, but this pressure is likely to ease throughout 2024.
“There is a significant number of cash buyers in the market coming from interstate who are seeking to downsize and make their low maintenance, high amenity living a reality.”
Alison Hedger, Knight Frank
Christie & Co. Property Group CEO, Michael Christie, added that established homeowners are poised to benefit from consistent capital and rental growth, a direct consequence of limited availability of stock.
“This trend is likely to sustain the high demand for centrally located housing while prices remain within reach,” he said.
Continued international interest
It is not just interstate migrants showing interest in the Gold Coast.
Juwai IQI co-founder and group managing director, Daniel Ho, said Asian buyers are showing considerable interest in the Gold Coast.
“Chinese buyer enquiries were up 138% in the third quarter of 2023, compared to a year earlier when China’s borders were still closed and the country was still in lockdown.”
Daniel Ho, Juwai IQI
However, Ho predicted in 2024, there will be fewer Asian buyers of investment properties and vacation homes and more buyers of primary residences.
“Most of what people consider to be foreign buying today is actually buying by new Australians who have moved to the country, intend to stay long term, and need a place to live,” he said.
“There are more than 18,000 students in Queensland, significantly more than any other country.”
Ho added that with Queensland’s tight rental market, the students who intend to stay and work after they finish their studies will likely opt to purchase.
Gold Coast total property listings
Cloudy days ahead for first home buyers and renters
These rosy prospects aren’t across the board, with Coughran noting that first home buyers may need to adjust their buying decisions for the conditions ahead.
“If your borrowing capacity has been reduced over the last few rises, just lower your expectations at getting into the market at an entry level comfort zone you are happy with.”
Tony Coughran, Simply Gold Coast
“I wouldn’t keep expectations where they used to be; adjust your expectations and price point to enter the market, otherwise you’re going to be left behind.
“There will be a divide between the haves and have nots.”
Gold Coast vacancy rate
Renters are going to have to slog it out, too. Propell Property director, Michael Pell, said supply has always been an issue in the Gold Coast, and it is not an issue that is going to abate any time soon.
“Over the last few years since Covid, we’ve had a huge influx of population growth from the southern states, Victoria and New South Wales,” he said.
“Which has put a huge amount of pressure on housing, rental availability and stock listings.
Gold Coast stock on market for rent
“There’s still 20 to 30 people rocking up to rentals going for 900 to a 1000 per week.
“The supply and demand issues are a greater factor than the cost of interest rates.”
Gold Coast asking rents
However, it is not all doom and gloom for first homebuyers, according to Christie.
“First home owners in Queensland are fortunate with the doubling of the First Home Owner grant,” he said.
“Although most of the central Gold Coast may surpass the $750,000 grant threshold, promising opportunities await in southern and northern coastal suburbs such as Pimpama, Coomera, and Upper Coomera, offering the potential for significant growth.”
Gold Coast’s solid fundamentals
Lawless said although housing values are still rising, the pace of growth has slowed over recent months.
“Dwelling values were up 2.8% over the three months ending November, with the rolling quarterly growth rate easing back from a recent peak of 3.9% in May,” he said.
“It’s likely the rate of growth will continue to ease through 2024 due to a combination of interest rates remaining higher for longer, worsening affordability pressures and the potential for advertised stock levels to rise from levels that are currently close to record lows.”
Tim Lawless, CoreLogic
Although a slower rate of growth seems likely, Lawless added that other factors should continue to support a modest level of appreciation in housing values, including migration from interstate as well as overseas, persistently low supply, and a relative affordability advantage compared with Sydney.
The direction of interest rates, which currently sits at 4.35%, will also be one of the key factors in the Gold Coast’s 2024 market performance, according to Lawless.
“Any move towards lower interest rates would be a positive driver for housing demand,” he said.
“On the flip side, we can’t completely rule out further rate hikes. Another lift in the cash rate would present a clear downside risk for housing demand and housing market conditions.”
Christie predicted that additional considerations influencing property prices on the coast include the revival of a struggling construction industry.
“The coast has witnessed project cancellations due to a lack of construction capability and material sourcing, contributing to the ongoing demand surge and scarcity of new housing options until these challenges are addressed in a more stable economic climate,” he said.
“Anticipate the culmination of central Gold Coast unit projects in quarter three to quarter four, triggering settlements and heralding a new wave of constructions; this period is poised to witness a surge in both new constructions entering the market and heightened investment activity.”
Article source: thepropertytribune.com.au