Despite the fact that Gold Coast real estate still carries a number of risks, the tourist destination’s property market has received an endorsement from one real estate research firm.
Released yesterday, the SQM Research Gold Coast Market Snapshot report gives the Gold Coast an investment rating of 3.75 stars out 5, up from the 3 stars it has held since 2011.
Using the SQM Research scale, a score of 3.75 means a location has a favourable outlook and should be considered for investment.
SQM Research director Louis Christopher said the improved score for the Gold Coast was the result of improving economic conditions seen in the region over recent times.
The report predicts that dwelling prices on the Gold Coast will grow by 7-11% during 2016, with rents growing at around 8%.
According to the report, the region’s vacancy rate is below 2%, while rental yields are hovering around 6%.
The low Australian dollar is also expected to boost tourism numbers in the area and as a result improve employment opportunities, while the 2018 Commonwealth Games are stoking enthusiasm for the region.
“Back in 2010 the Gold Coast housing market suffered a perfect storm of events that created a major dwelling price crash,” Christopher said.
“A lot of those events have now dissipated and right now, there are many favourable economic factors which are helping to improve the region,” he said.
“So we believe Gold Coast property investors are likely to enjoy good returns, both in rents and capital growth for up to the next three years.”
While the region may be improving, some of the positives in the report could prove to be double-edged swords.
The report identifies that the region’s market does still have a level of volatility to it, while an economy reliant on tourism can be prone to boom and bust cycles.
There is also some concern the region may be hit by a post- Commonwealth Games slump in 2019.
There are signs that people may be thinking the pros outweigh the cons however, after it was revealed last week that apartment sales on the Gold Coast are booming
Rocket Property Group chief executive officer Ian Hosking Richards said it appears that the region is in the midst of a recovery of sorts.
“The Gold Coast has always been a bit volatile, when it’s booming it’s booming but when it slows down it can fall off a cliff,” Hosking Richards said.
“Since the last correction we had the Gold Coast has sort of just been sliding along and it’s about that time now where after four or five years you would expect to see things pick up,” he said.
“The other thing is that the major players who left the region are coming back in and they’re paying good prices for land to develop and as a result the price of apartments and houses are going to rise.”
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