What’s is going to happen in the Real Estate market? That’s the golden question that everyone is asking right now… well one thing I can say, is that I don’t have a crystal ball and I can’t forecast the future, no one can.
As we all know though, past performance isn’t an indicator of future performance. You’ll often hear people saying that the Gold Coast ALWAYS follows Sydney in this ‘property cycle’. Well actually, we haven’t always followed Sydney. As a matter of fact, the Gold Coast is a very different City to what it was during the last ‘cycle’.
We’ve got a new Mayor, we’re a big City with a tram, we are now one of the fastest growing regions in Australia and instead of a market being overtaken by overseas investors, we have an epidemic of downsizers driving the owner occupier market. The Gold Coast is a fully self-sustaining market that doesn’t just rely on tourism anymore. We now have world leading health care, world leading education institutions, head office bases for some of the largest companies in Australia and our unemployment rate is one of the lowest it’s ever been.
We can however, look at research on things such as current and past trends. It’s always important to make sure that the information you are viewing is from a credible resource too… just because it’s on Google, doesn’t mean it’s correct.
Some reliable sources of this valuable information are; local and experienced project sales and marketing consultants such as our company Marketing Projects SEQ, Urbis, Census, the Australian Baureau of Statistics, Realestate.com.au and SQM research (a lot of the Property Magazines use SQM research), Cordells and RPData. More often than not, you’ll need to pay for access to this information.
Project Sales and Marketing agencies such as ours, are on the front line seeing a dramatic shift in the market. Foreign buyers are few and far between as they deal with hurdles resulting from policies put in place from the Australian Prudential Regulation Authority (APRA), stopping most Australian Banks from lending to overseas buyers and forcing reductions to investment portfolios. Then there’s the Chinese Government almost completely stopping outbound capital to keep as much money in their country in an attempt to regain their previous GDP. Foreigners have also only been able to purchase new properties, subject to the relevant approvals from the Foreign Investment Review Board (FIRB).
For many years, the supply of new developments on the Gold Coast (and in the Australian market in general) catered to the overseas market, which was the main market driving new developments/construction jobs/housing for the rental population. Apartments were smaller so they could be delivered at sharp prices with higher rental yields for the investor. A lot of developments, up until a couple of years ago, used this ‘rack em and stack em’ type building model.
We all know of the international developers that have more recently delivered major developments to the market that tailor to yesterday’s foreigner targeted market. Now they can’t sell them and they’re scratching their heads, asking why this has happened… if only they’d consulted with local and experienced project sales and marketing individuals from the start who could have given them the research and advice on what product to deliver.
The owner occupiers are now driving the market, with the Gold Coast’s down-sizing baby-boomers leading the way. Many of them have large homes that they can no longer maintain and the previous ‘rack em and stack em’ type of product, doesn’t suit this target market. These buyers insist that their new homes are true to the following (and so much more):
- Built by a quality builder with a lot of local awareness (good publicity, obviously) and developed by a reputable developer (Buyers of this ‘vintage’ don’t trust developers and builders they don’t know).
- Being in a good location close to schools, shops and public transport;
- Having 2 car parks;
- Having a comfortable sized apartment (minimum 100m2 plus balcony for the 2 bedrooms and 130m2 plus for the 3 bedroom apartments);
- Quality apartment finishes, particularly the kitchen and bathroom
The buyers need to see a track record of always completing what they start, such as local Gold Coast Builder and Developer, Rawcorp.
There are two developments that are delivering suitable product to this target market and achieving huge success. Bellevue The Glades in Robina is being built and developed by Rawcorp. The apartments, which are being sold by our office, are now 60% sold. Vantage in the Royal Pines Precinct by the Rayjon Group, are being sold by Knight Frank Gold Coast with the first three buildings 100% sold and settled. Both of these developments tick all of the boxes mentioned above.
Markets where these downsizers are gravitating towards (in droves), are Robina, Benowa, Palm Beach and Burleigh Heads. These locations are close to medical, shops, beaches, transport, recreation and dining.
All in all, there’s no one size fits all, there are good parts of the current market and bad parts. There are little property hot spots all over the Gold Coast. Then there are black spots that should be avoided right now (for example, if the big banks won’t lend to buyers in a particular suburb, if it’s next to housing commission or if the supply far outstrips the demand). There are so many factors to consider.
Most importantly do your research, speak to as many people as possible and don’t solely rely on history to guide you in your decision-making process. Times have changed, the Gold Coast has evolved as a city and its property market will continue to do so.
If you have a new development planned and would like to have a confidential discussion on how we can assist you, feel free to call me on 0413 602 321 or email firstname.lastname@example.org
Managing Director/Project Sales & Marketing Manager
Marketing Projects SEQ