Is the Gold Coast set to boom?
Things are happening on the Gold Coast that are leading some pundits to predict it’s set for strong growth. But is it as strong as it looks?
Excitement is growing among sports enthusiasts in the Sunshine State. Some of the best athletes from around the world will be gathering there for the 2018 Gold Coast Commonwealth Games.
And they are by no means the only ones anticipating great things for this regional city.
Indeed, Andrew Wilson, senior economist at Domain, estimates there will be price growth on the Gold Coast of between 5% and 10% in the next 12 months, largely due to its strong local economy.
In fact, some well-located beachfront property on could triple in value over the next five years off the back of rising Chinese investment and tourism numbers, according to the independent financial services company Fat Prophets.
Furthermore, the population is increasing, the Australian dollar is decreasing, and there are two major five-star hotels being constructed on the beachfront.
And in April, the building of the $122m Carrara Sports Precinct officially got underway, which is generating 400 jobs during design and construction.
Overall, the $320m Commonwealth Games infrastructure program is set to create 1,000 jobs during the design and construction phase.
But despite all the money being poured into infrastructure spending, Hotspotting.com.au director Terry Ryder believes investors should exercise caution.
“We hesitate to recommend the Gold Coast because it lurches from one boom-bust scenario to the next,” says Ryder.
“Developers never seem to learn, as they are addicted to building skyscrapers with hundreds of apartments, each one of them the same as the others.”
This is a recipe for more oversupply and bad results for investors, he says – not to mention the fact that the area is too reliant on tourism.
“It’s not really evolving the way other regional cities in Queensland are,” Ryder says.
“If you look at the median price for units at Surfers Paradise
, it is lower now than it was five years ago.
“It’s all about high-rise apartments trying to be sold to Chinese investors, and it’s a recipe for the market to crash again.”
Even though Ryder acknowledges that there is a big increase in sales activity and lots of new infrastructure spending, he believes there are better and safer places in Queensland to invest in than the Gold Coast.
Keeping an eye on Brisbane’s north
Kedron and Wavell Heights are two suburbs in Brisbane’s north that are showing promising signs, says Zoran Solano, a buyer’s agent at Hot Property Specialists Buyers Agency.
Both are located less than 10km from the Brisbane CBD and boast quick access to the city.
The area also includes some of Brisbane’s best shopping centres within a short drive – including Westfield Chermside, which is the largest shopping centre in Queensland.
“There is also the proposed Coles redevelopment planned, which is set to reinvigorate the area and provide added convenience for locals,” says Solano.
“It also benefits from the airport link tunnel and northern busway.”
In Kedron, the median price of houses and units is $625,000 and $410,000 respectively, according to CoreLogic RP Data. Houses in Wavell Heights currently sit at $590,000 and units at $439,000.
Solano also sees value in the suburb of Zillmere, which is a bit further out than Kedron and Wavell Heights.
“It’s an underrated area within Brisbane that I think still offers buyers with budgets less than $500,000 an opportunity to be within 15km of the Brisbane CBD and purchase a house with good land content,” says Solano.
The other good thing about Zillmere is the healthy yields, with units at 6% and houses at 5%.
But it’s important to realise that the affordable prices and high yields in pockets of Brisbane are susceptible to change.
“Brisbane’s market has been moving for more than a year, and people are missing out,” he adds.
Solano’s advice for investors is to think outside the box, because in Brisbane’s moving market there are an increasing number of multiple offers occurring.
“Think creatively with your offer and negotiate not just on price but also on terms and conditions in order to put your offer at the top of the table,” Solano says.
SUBURB TO WATCH
Brighton: Shining brightly in Brisbane’s north
Located 19km north of the Brisbane CBD, Brighton is one of the city’s highly sought-after suburbs. One of its popular features, especially for exercise enthusiasts, is the Brighton Esplanade, which stretches along the coast between the Houghton Highway bridge and Sandgate.
The other key drawcard of this suburb is the beach, which helps attract families and retirees.
The suburb boasts excellent infrastructure, including the $315m Ted Smout Memorial Bridge that opened in 2010 and connects the Redcliffe suburb of Clontarf with Brighton. There are also a variety of quality schools, shops and parks in and around the suburb.
Houses there range from petite post-war cottages to large Queenslanders on big blocks of land. At the moment they are much cheaper than in neighbours Sandgate and Shorncliffe, where the median price is in excess of $550,000. And the sought-after Sandgate dining precinct is less than 10 minutes’ drive away.
Moreover, good public transport is nearby and residents can hop on the train at nearby Sandgate. Brighton also has easy access to the Gold Coast, Sunshine Coast and the airport.
Houses are currently in demand, as evident from the vacancy rate of just 1.17%, according to Real Estate Investar.
Three-bedroom houses on Cherry Street and O’Dare Street can be picked up for less than $500,000. These cul-de-sacs are close to schools, shops and transport, and are ideal for families.