Borders Realty

Boutique Real Estate Agency Gold Coast & Brisbane

  • About Us
  • Blog
  • Contact

Capital Gains Cool in April 2014

June 23, 2014 by Christopher Manning

This is according to the latest RP Data – Rismark Home Value Index Release.

After a surge in values over the first quarter of this year, April’s housing market results have shown a marked slowdown in capital gains with dwelling values only 0.3% higher over the month.

Dwelling values across Australia’s capital cities shifted down a gear in April, rising by just 0.3 per cent across the RP Data – Rismark combined capital city index. The slowdown in the rate of capital growth comes after a very strong 2.3 per cent month-on-month rise in March and 3.5 per cent increase over the first quarter of the year.

Highlights over the three months to April 2014:

• Best performing capital city: Darwin, 5.1 per cent
• Weakest performing capital city: Canberra, 0.2 per cent
• Highest rental yields: Darwin houses with gross rental yield of 5.8 per cent and Darwin units at 6.1 per cent
• Lowest rental yields: Melbourne houses with gross rental yield of 3.3 per cent and Melbourne units at 4.2 per cent
• Most expensive city: Sydney with a median dwelling price of $680,000
• Most affordable city: Hobart with a median dwelling price of $340,000

Filed Under: Blog

Gold Coast Rental Oversupply

September 30, 2011 by Christopher Manning

Coolangatta Rentals

As reported in the Gold Coast Bulletin, new figures have revealed the rental property vacancy rate on the Gold Coast is among the worst in Queensland due to high unemployment and downturns in the city’s key industries.

The situation is so bad, buyers who purchased investment properties are struggling to cover costs as many drastically reduce rental prices to attract tenants.

The annual report of the Residential Tenancies Authority, released yesterday, shows the vacancy rate on the Gold Coast is 5.5 per cent, significantly higher than the state average (3.8 per cent) and inner Brisbane (2.2 per cent).

Rainbow Bay Rentals

Unit Owners Association of Queensland vice-president Paul Cassels said a combination of factors had painted a grim picture for Gold Coast property owners.

“The issue down on the Gold Coast is there are a lot of units controlled by caretaker managers who prefer overnight stays rather than permanent rentals,” he said. “The other thing is the building and construction industries are dead.

“The cost associated with units on the Gold Coast makes the rents higher, especially with upkeep and body corporate fees. A lot of people can’t get the return they used to get and, as a result, there is a huge amount of oversupply.”

Filed Under: Blog

Gold Coast Property Market

September 8, 2011 by Christopher Manning

Gold Coast Property Overview

The Gold Coast is Australia’s seventh most populous major region with an estimated population of 527,828 persons as at June 2010. The population of the region has swelled markedly over the past decade as retirees and ‘sea changers’ have flocked to the region seeking a better lifestyle. A large part of the population growth is also due to new land releases and development as well as the improvement in infrastructure linking the Gold Coast to Brisbane and the industrial estates in between.

Since the Global Financial Crisis (GFC) the Gold Coast region has had its struggles. The flow of people moving to the region has slowed markedly, the unemployment rate has increased, property values have fallen and the tourism market has slowed. The impact on the Gold Coast has been severe however, this phenomenon is not unique to just the Gold Coast. Many Australian coastal markets have felt the brunt of the downturn as prospective residents have shunned these regions choosing to stay within capital cities where job prospects are stronger.

Across the region, median house prices are currently -5.4 percent below their historic peak and unit prices are -8.3 percent below their peak. Although the market is soft and prices have fallen it is important to highlight that the Gold Coast is comprised of a wide variety of sub-markets; certain regions have fared quite well while others have recorded dramatic price falls.

The higher priced luxury housing markets, particularly those located along the ‘glitter strip’ (Main Beach, Suffers Paradise, Broadbeach and Mermaid Beach) have recorded some of the largest price falls. Meanwhile, other regions (typically located away from the beachfront) have recorded much more modest declines in home prices. The underperformance of the luxury housing market is very much inline with broader housing trends which indicate values amongst premium suburbs are falling much more sharply than the broader market.
Another impact of the soft market conditions has been weakness in the rental market. With fewer new residents across the region and heightened vacancy rates, rental growth has been minimal for more than two years. Indicative gross rental yields have subsequently resulted in lower returns for investors and with poor capital growth, investor activity within the market has declined considerably.

In 2007, prior to the GFC, sales volumes were at levels well above average as vendors were trying to cash in on strong price growth. As the GFC swept through the property market, properties listed for sale remained at heightened levels however, buyers were reluctant to enter the market in its current state. Since this time, listings have continued to climb even further, meaning the fewer buyers have a lot of choice and the market is well and truly in the buyers favour.

Vendors across the region are having to discount their asking prices by approximately -9 percent and the level of discounting shows no signs of improvement. Across the national market, houses are taking an average of 55 days to sell while units are taking 51 days however, properties within the Gold Coast typically take longer to sell. The average time on market for houses and units across the region is currently more than three months. Both of these indicators show a considerable disconnect between vendor expectations and what buyers are prepared to pay.

With sales volumes tracking well below average levels and listings at their highest levels, price growth is expected to be minimal until the high volume of stock on the market can be absorbed.

Overall, the first quarter of 2011 has been characterised by a continuing decline in market conditions. Queensland’s tourism market remains subdued, while the Gold Coast’s employment rate is relatively weak putting further strain on the local economy. The prospects of capital gains returning to the market in the short-term do not look strong. Any recovery is likely to be encouraged through improving equities market, a global economic recovery and rebounding tourism numbers.

Gold Coast Property Market Overview

Property prices slump as market conditions worsen

• The median house price for the three months to March 2011 was $492,000, while units recorded a median price of $355,250 for the same period.
• House prices across the Gold Coast peaked during the March 2010 quarter at $520,000.
• Unit prices peaked earlier during the three months to January 2010, when the median price was recorded at $387,000.
• Post-GFC, house prices fell -11.4 percent between January 2008 and December 2008, when the median price recorded a low of $455,000 from its previous high of $513,750.
• Unit prices also fell by -11.4 percent however, it occurred between May 2008 and March 2009, when the median price fell from $386,000 to $342,000.
• House prices are currently -5.4 percent below their historic high, while unit prices are -8.3 percent below their highest historic price.
• Property prices have been falling during the last 12 months and there is no indication of a recovery as yet. Volumes fall to their lowest levels since 1989
• Sales volumes were the highest ever during September 2003 when almost 9,000 properties were sold during the preceding three months.
• Volumes peaked again more recently during May 2007 when more than 7,700 sales took place across the Gold Coast.
• The highest volumes have occurred as a result of significantly increased unit sales.
• During the 1990’s, units accounted for approximately 50 percent of sales across the Gold Coast however, over the last decade, the unit market has expanded and on average, has accounted for 55 percent of all sales.
• During the peak periods, units typically account for approximately 60 percent of all sales, further highlighting the large unit market across the Gold Coast.
•Over the last decade, combined sales volumes have averaged approximately 5,820 quarterly.
• Sales volumes have not been above average since December 2007.
• The current volumes sit at 2,439 for the three months to March 2011, which is almost -60 percent below average and is the lowest volumes recorded since July 1989. Premium market continues to weaken
• During the first quarter of 2011, 63.5 percent of dwelling sales were at prices below $500,000. In comparison, during the first quarter of 2007, 68.9 percent of all sales were at prices below $500,000 and during the first quarter of 2010 58.1 percent of sales were below $500,000.
• The proportion of sales under $300,000 has declined considerably since 2007, highlighting affordability issues, the affect of bracket creep and fewer first time buyers in the market.
• Dwellings priced between $300,000 and $500,000 have continued to increase in demand.
• Properties sold above $700,000 accounted for approximately 15 percent of sales during the first quarter of 2007, while the first quarter of 2010 saw this proportion increase to almost 19 percent. During the first quarter of 2011, property sales priced over $700,000 had fallen to 13.7 percent of all sales.
• The slowdown in the $1 million plus market reflects broader trends and also represents the marked slowdown in demand for housing in lifestyle markets such as the Gold Coast.

Vendor discounting shows a clear disconnect between vendors and buyers

• On a national basis, over the last year vendors have had to become more flexible in their price expectations.
• Across the capitals, vendor discounting is recorded at -6.0 percent for houses and -5.8 percent for units. At the same time last year, vendor discounting was recorded at -5.2 percent for houses and -4.9 percent for units, well below the current levels.
• Dwellings within the Gold Coast have generally recorded much higher levels of discounting than the capital averages.
• Houses across the Gold Coast are currently seeing average discounting of -8.9 percent, while vendors are having to discount their units slightly more at -9.2 percent to sell.
• Discounting peaked during April 2009 for houses, at that time vendors were having to discount by -9.5 percent, while unit discounting recently surpassed its previous peak of -9.1 percent which also occurred during April 2009.
• Discounting has continued to increase steadily over the last 12 months, suggesting there is a considerable disconnect between vendor expectations and what buyers are prepared to pay.
• Over the past five years the average vendor discount has been recorded at -7.2 percent for houses and units which indicates that currently discounting is well above average levels.

Time on market has continued to increase with properties taking more than three months to sell on average

• Across the capital cities houses are taking an average of 58 days to sell and 53 days is the average selling time for a unit during March 2011. During March 2010, it took an average of 45 days to sell a house and 39 days for units. The results show that the average time it takes to sell a property is increasing significantly.
• Dwellings across the Gold Coast are taking considerably longer to sell than the average across the capital cities.
• Houses within the Gold Coast are currently taking an average of 104 days to sell, while units take 113 days for March 2011.
• During March 2010, houses across the Gold Coast were taking, on average, 87 days to sell and units were taking 100 days to sell.
• On average, houses have taken 86 days and units 93 days to sell over the last five years, highlighting that both measures are currently at levels well above average. This also highlights that time on market is quite long suggesting buyers have more time on their hands to select a property, do their due diligence and negotiate on price.
• The average time on market has been steadily increasing over recent months, further highlighting the disconnect between vendor expectations and what buyers are prepared to pay.

Demographics

• Over the last 14 years, the Gold Coast has recorded relatively strong growth in population of 2.7 percent annually on average.
• In 1996 it was estimated that 363,943 persons lived within the region, by 2010 the population had increased to 527,828 persons, an increase of 163,885 persons.
•During the last year, the estimated residential population has increased by 12,943 persons, or 2.5 percent, which is slightly below the long-term average however, the growth rate is still relatively strong when compared to the rest of Australia where population growth has been 1.7 percent over the same period.
• The slowdown in population growth is reflective of the slower rate of interstate migration in to Queensland and a slowing in overseas migrant numbers.

Unemployment

• Gold Coat’s unemployment rate has been steadily increasing over the last three years, although there were signs of improvement during 2010.
• The unemployment rate peaked during February 2010 at 8.1 percent however, fell to 5.3 percent during October 2010.
• As the Global Financial Crisis started to unfold the tourism sector began to show signs of considerable stress, the unemployment rate has been trending upwards once more.
• Given the Gold Coast’s strong reliance on tourism, the unemployment rate has weakened considerably and now sits at 7.2 percent for April 2011.

Building Approvals

• Building approvals for the Gold Coast peaked during the 2007/08 financial year according to the ABS, when 7,625 approvals were reported.
• The graph clearly shows building approvals have been trending lower in recent years and are currently well below their highs from five years ago.
• This result suggests there is likely to be limited new housing stock entering the market over the coming year.
• Over time this will be good news (particularly for the unit market) as a large over-hang of stock remains. A slowdown in new unit construction would be ideal, allowing the market time to absorb the excess stock constructed in recent years.

Vacancy rates

• The quarterly estimates for vacancy rates for residential rental accommodation across the Gold Coast for all types of dwellings (note: survey was not conducted for September 2007 quarter).
• Over the last eight years, the vacancy rate has averaged 3.6 percent each quarter.
• Vacancy rates peaked at 5.5 percent during the June 2010 quarter.
• Since this time, vacancy rates have shown signs of improvement and were recorded at 4.2 percent for the March 2011 quarter.
• Despite the improvement it is unlikely a vacancy rate of 4.2 percent

Labour force shows little employment growth over the year

• Labour force data for the three months to May 2011 shows that total employment on the Gold Coast has increased by 0.8 percent during the last year.
• Full-time employment across the region has fallen by -0.7 percent during the last year.
• Meanwhile, there has been an uplift in part-time employment, with an increase of 3.9 percent during the year. This result is reflective of employers dropping workers back to part-time employment rather than shedding jobs completely.
• Across individual industries, job losses have been greatest within Agriculture, Forestry and Fishing, down -76.9 percent over the year.
• Other industries which have shed a significant number of jobs include: Electricity, Gas, Water and Waste Services (-26.5 percent), Health Care and Social Assistance (-23.5 percent), Retail Trade (-20.0 percent) and Information Media and Telecommunications (-20.0 percent).
• The greatest increase in employment over the year has been recorded in Mining which have climbed 72.7 percent.
•Other industries to have recorded a significant increase in employment during the year include: Construction (50.0 percent), Administrative and Support Services (49.6 percent), Other Services (24.0 percent) and Rental, Hiring and Real Estate Services (18.9 percent).

Retail and health care the largest employers in the region

• The Gold Coast’s largest sectors of employment during the three months to May 2011 were: Construction (15.5 percent), Retail Trade (11.2 percent), Health Care and Social Assistance (10.1 percent) and Accommodation and Food Services (9.4 percent)
• In a nut shell, the biggest employers in the region are either reliant on: population growth, the aging retirees that have been moving en masse to the Gold Coast in recent years or tourists that come to the region to spend money on retail items, food and activities.
• At the other end of the spectrum the smallest proportion of overall employment is in the following fields: Agriculture, Forestry and Fishing (0.1 percent), Mining (0.6 percent), Electricity, Gas, Water and Waste Services (0.8 percent) and Information Media and Telecommunications (1.1 percent).
• You will note that the two of the sectors which shed the greatest number of jobs over the past years are two sectors that employ the most people. On the other hand, the industries in which a greater number of jobs were created are sectors which employ comparatively fewer people (except for construction).
• Overall, the Gold Coast is heavily reliant on employment within the services sector with most of the major industries of employment sitting within that sector.
• The slowdown in tourism, population growth and retail sectors does not bode well for the employment outlook on the Gold Coast.

Conclusions

• The Gold Coast market’s performance is being weighed down by a number of factors namely:
• The strong appreciation in property values prior to the onset of the Global Financial Crisis (GFC).
• The continuing economic weakness both locally and worldwide resulting in fewer tourists coming to the region.
• A slowdown in the ‘sea change’ phenomenon as residents decide to stay where they are and pay down debt rather than more to coastal markets
• The high Australian dollar which is resulting in fewer international tourists and more Australian tourists heading overseas because it is relatively more affordable
• The oversupply of recently constructed units on the ‘glitter strip’ which includes: Main Beach, Surfers Paradise, Broadbeach and Mermaid Beach.
• Since the onset of the GFC, capital gains on the Gold Coast have been well below average in fact, since the end of 2007, median house prices across the market have fallen by a total of -3.5 percent and median unit prices are down -5.5 percent.
• Achieving property sales appears to be quite difficult within the current market with volumes at extremely low levels, vendors typically having to discount their prices significantly and properties taking a long length of time to sell.
• The vast majority of properties continue to sell at prices below $500,000. Developers should take heed of this trend and look to deliver more affordable stock where possible.
• Rental growth has been virtually non-existent in the region since late 2008. With property prices also falling, their appears to be little incentive, whether it be price growth or yield improvement, to attract significant investor activity in the market at this point in time. Rental vacancy rates remain at high levels, suggesting that there will continue to be limited scope for rental growth in the short-term.
• Property listings are at historic high levels, this further hampers prospects for capital gains in the market. The market needs time to remove the overhang of stock.
• Population growth into the region has been very strong in recent years however, it has slowed over the last couple of years. Population growth remains strong but the slowdown is having an impact on demand for housing.
• Building approvals have eased markedly in the years since the GFC however, the ongoing stock overhang in key markets, notably unit markets in Surfers Paradise and Broadbeach, still needs to be consumed before it would be advantageous for the overall market to see a ramping up in approvals. In saying this, if there are areas where more relatively affordable (sub $500,000) stock can be delivered in an area in which people want to live this would be of benefit for the market.
• The tourism market nationwide is slowing and the affects are acutely felt in markets such as the Gold Coast which is heavily reliant on national and international tourists coming to the region and spending money.
• The total number of employed persons in the region has increased by 0.8 percent during the 12 months to May 2011 with full-time employment falling by -0.7 percent and part-time employment increasing by 3.9 percent. As a result there has also been a spike in the unemployment rate, with the most recent data indicating that it sits at 7.2 percent in comparison to a 4.9 percent unemployment rate nationally.
• The Gold Coast is heavily reliant on the services sector with construction, retail, health care and accommodation and food services the largest employers across the region. With fewer tourists coming to the region and population growth slowing, service sector jobs are likely to come under the most pressure.
• Overall the Gold Coast market is underperforming however, once you delve deeper into the data you find that the lacklustre performance is largely the result of the unit market along the ‘glitter strip’ and the premium housing market.
• The more affordable housing markets have typically recorded growth in median sale prices over the past year. These suburbs tend to be located at the northern or southern end of the Coast or in locations away from the water. The median house price in these regions is typically below $750,000.
• It is a similar story across the unit market with suburbs at the southern or northern end of the region and those away from the waterfront being most likely to see some improvement in median selling prices over the year.

RP Data’s latest update on the Gold Coast Property Market. Visit them at http://rpdata.com

Filed Under: Blog

Housing Shortage Predicted For Gold Coast

September 8, 2011 by Christopher Manning

Gold Coast Housing Shortage

It has been estimated the Gold Coast will have one of Australia’s largest housing shortfalls by 2020, with a gap of 8159 homes.

The figures were included in a HIA Housing to 2020 report, released nationally this afternoon.

The Gold Coast was ranked third for future housing shortages, behind the top-ranked Brisbane (25,453).

Logan made it into fifth position with a gap of 7158 predicted.

Moreton Bay was also in the top 10, along with the Sunshine Coast.

It’s not the first time, nor the last time, we’ll see a Gold Coast housing shortage.

Filed Under: Blog

  • « Previous Page
  • 1
  • 2
  • Email
  • Facebook
  • Twitter

From the Blog

  • Growth tapers with housing affordability
  • Brisbane Best Capital City For Growth
  • SEQ Perfect Property For Chinese
  • Changing Gears Through The Market Peak
  • Property Prices Climb 10.1% 2014 Year

Contact Us

Get in contact to find out what makes us different from the usual real estate agency. Simply go to our contact page and drop us a line.

We are currently open:

6 days a week

Southern Queensland’s Boutique Real Estate Agency

Our emphasis is on quality, on being the most intelligent, honest and friendliest agency in Queensland.

Whilst we have sold properties as far afield as Gladstone on behalf of our clients, and manage properties from northern Brisbane to the southern Gold Coast, it really is our services we tailor around you in which we excel.

We Are Renowned As Specialists In The Following Areas:

Gold Coast

See Location

Bulimba

See Location

Murarrie

See Location

© 2009 - 2022 · Borders Realty · Gold Coast & Brisbane QLD