By Peter Gilmour, chief foreign correspondent
According to the CoreLogic Home Value Index for October 2016, the Gold Coast and Brisbane were outshining the big league residential areas of Sydney and Melbourne in property values. Here’s why.
The Gold Coast is an exciting residential area situated on the east coast of Australia, 40 miles south of Brisbane, the capital of Queensland. After the establishment of the well-known Surfer’s Paradise in the late 1920’s, the area has boomed to become a major tourist destination with a sunny, subtropical climate, 40 miles of beautiful beaches, theme parks, scenic landscapes, canals and waterway systems, vibrant cultural scene and a high-rise dominated skyline.
Tourism Driving Growth
The Gold Coast is home to over 500 000 people with many living on the beautiful Nerang River and nearby canals and some of the tallest residential towers in Australia commanding panoramic views of the beaches. CoreLogic, the local analytics and intelligence company, shows that Gold Coast’s property market has been improving over the past couple of years and links these increases to the region’s tourism which has been on the rise. In addition, the area is setting its sights on the excitement and infrastructure spend that will come from hosting the 2018 Commonwealth Games.
Home Values High
According to the CoreLogic Home Value Index for October 2016, the Gold Coast and Brisbane were outshining the big league residential areas of Sydney and Melbourne in property values. Data shows that the median value in Brisbane and the Gold Coast have outperformed Syndey and Melbourne by 5.3 percent for houses and 4.1 percent for apartments in rental yields.
Capital gains remained positive in most of Australia’s housing markets, but the pace of growth has been slowing when compared with the last 12 months. The Gold Coast has plenty to entice those interested in a solid property investment with its population growth making it the sixth largest city in Australia. The Gold Coast City Reputation Strategic Plan also outlines the potential for the city to provide an additional 60,000 jobs in the next five years, due to economic growth in industries such as education, health and advanced manufacturing.
In a recent media release, the Deputy Premier and Minister for Infrastructure and Planning, Jackie Trad, said that in the South East Queensland area each year there will be an influx of 80,000 residents needing more than 30,000 homes in the foreseeable future. He sees an increase in smaller households due to more young people entering the market, more single-person households and older people downsizing. This will create the need for more diversity in homes and affordable living.
Rents Offering Excellent Returns
Investors are happy with inflated rents giving excellent returns, reports the Gold Coast Bulletin. REIQ Gold Coast Chairman, John Newlands was reported to say that the market has been healthy for 18 months or more and currently, it is possible for an investor to buy a house for $USD 375,000 and receive $USD 425 in rent per week. Rental stock in November 2016 was at a record low of less than 1 percent. Much of the demand is fueled by tradesmen moving to the coast to work in the construction industry. Both infrastructure projects and construction are increasing ahead of the Commonwealth Games, and there are more jobs and more prospective tenants every month.
Homes in Sydney and Melbourne have reached a point where they are more expensive than those in Gold Coast, yet their rental yields have not caught up.
In the next 12 months, the outlook for the Gold Coast remains positive with good capital value growth and high rental returns being key drivers for investors to consider the Gold Coast for their next investment.