Gold Coast property market to remain strong in 2017
Residential home runs to continue
As we round out the year, data for 2016 to date shows the Gold Coast residential property market has continued to perform well, continuing last year’s momentum.
According to Andrew Bell, chief executive officer of The Ray White Surfers Paradise Group, the Gold Coast property market hasn’t been this strong since 2006, with most segments now well and truly recovered from the Global Financial Crisis.
“What is the most pleasing is our growth in prices has been mature. Steady but not as crazy as some of our inner state markets, and so, you hear no conversation about the Gold Coast property market being at risk of being in a bubble, as opposed to Sydney and Melbourne,” he said.
“Our surge in population growth has seen good, steady demand for housing reflecting in a vacancy rate under 2% and a firm demand for homes and apartments to buy. Supply has been limited with shortages of resale properties reported in most markets.”
“We are looking forward to a really strong and positive start to 2017.”
Herron Todd White director, Luke Nichols echos the sentiment and believes the record low interest rates, shortage of stock and high level of buyer urgency should see momentum in the local market maintained over the short term.
“In a number of the established coastal and suburban locations, sale prices in the lower and middle markets have exceeded the previous peak market values of 2006 and 2007.”
“It is also apparent that over the course of 2016, the increased pricing for established housing has also, in part, bridged the gap between new and near new dwelling pricing, and this has led to good demand for vacant land and/or new housing and medium density product, both from investors and also owner occupiers who have been priced out of the traditional housing market. ”
Luke also believes 2017 should maintain appeal to buyers thanks to large infrastructure works being completed.
“During 2017, the appeal of real estate on the Gold Coast is also expected to continue to benefit from the significant infrastructure works being completed, including Stage 2 of the Light Rail System, and the hype attached to the pending 2018 Commonwealth Games.”
As a master planned community, established in 1980, Robina is a relatively young residential market but one which has seen a steady median price increase over time. According to independent researchers Urbis, Robina recorded a median house price of $627,500 for the six months ending March 2016. This is well above the wider Gold Coast LGA figure of $570,000 and also above the surrounding catchment which is recording a median house price of $600,000 over the same period. The last two years has seen the Robina median house price increase at a significantly faster pace than the wider Gold Coast LGA, lifting from $490,000 to $627,500, a 28.1 per cent increase or $137,500.
Several new townhouse and terrace home projects have been undertaken in Robina, and this product has shown strong median price growth. Over ten years this product type has increased in median price from $290,000 to $522,500, an increase of 80 per cent or 6 per cent per annum. Over the last 12 months, townhouse and terrace home product has achieved individual sale prices up to $699,000. Not only did sales volumes increase but the median price also increased as this versatile product type was well received by the market, including the sellout of all terrace homes in Robina’s Botanique and CityVillage.
Across the Gold Coast, the residential vacancy rate has fallen to one of its lowest levels in five years, recording a rate of 1.5 per cent at March 2016 quarter. This is the lowest vacancy rate of all South East Queensland areas and indicates a tight rental market. The sought-after Robina area is attaining higher weekly rental returns than the wider Gold Coast due to its central location and strong infrastructure and amenity. Robina has seen strong long-term rental growth across the townhouse market. Over the past ten years the median weekly rental for two-bedroom townhouses has recorded annual growth of 4.7 per cent, while three-bedroom townhouses have achieved 3.5 per cent per annum over the same period.
Source: Urbis Robina Outlook, 2016
Commercial activity buoyant – office vacancy low
In 2016, the combined Robina and Varsity Lakes area achieved the highest volume of occupied office space of all Gold Coast City precincts (Property Council of Australia, January 2016). With significant premium new office projects and further commercial projects underway in 2017, Robina/Varisty is on track to become the largest office precinct in Gold Coast City. The catchment has an enormous workforce which is tipped to produce an employment growth increase of up to 41,730 jobs by 2050 (Urbis, 2016).
The strong employment, infrastructure and amenity fundamentals make Robina a highly desirable place in which to live and work.
We asked Tania Moore, joint managing director of Knight Frank Gold Coast to share her perspective from the ‘coal face’ of office leasing.
“The Robina commercial office market has continued to be a standout performer of the Gold Coast, with one of the lowest vacancy levels of the five office precincts measured by the Property Council of Australia. The lack of available stock is seeing a continued uplift in rental rates being achieved which is translating to increasing property values. We anticipate this trend will continue throughout 2017 due to a lack of new supply.”
2016 saw the sell-out of the CityPods office project (where limited spaces remain for lease), and the sale of the Campus Alpha building, in the Robina Medical Precinct for over $26 million.
The newest player in the Robina office leasing market, launched in late 2016, is Robina Professional Centre where centrally located premium office space is leasing from $350/sqm pa (net).
HTW Property Valuers’ December 2016 National Property Clock classifies the Gold Coast office market as a “rising market”.
They note, “overall, the across the board vacancy level continued its downward trend; office rentals remained stable and in cases exhibited slight uplift; the level of incentives being offered diminished; sale volumes remained buoyant with several sales spread fairly evenly over the course of the year; and yields continued to compress.
“In summary, 2016 was another positive year for the Gold Coast office market following a similar scenario to 2015. Local economic conditions have remained pretty good, net office vacancies dipped slightly again and rental levels continue to improve, albeit marginally.
“Moving into 2017 we would expect the improving conditions to continue on the back of sustained low interest rates and the ongoing benefit of planned infrastructure associated with the Commonwealth Games to be held in 2018.”
You can read the full HTW December 2016 report here.
insideR and the whole Robina Group team hope your 2016 was a fabulous one, and wish you all the health, happiness and success for 2017.
