Property Gold Coast: Our resident Real Estate Advisor, David Lonie tells us what to look out for in the local property market.
While everyone is expecting news of a housing crash on the Gold Coast, this hasn’t happened. While property prices have plateaued, there is still a lot of movement on the Gold Coast. We aren’t seeing the big growth that started in 2012 and ended in 2017. Now in 2019, things aren’t moving upwards pricewise – however, here’s the unexpected news: Houses are still selling, despite what the southern states are experiencing.
Property Price Stability
Gold Coast real estate has held its value – the market hasn’t dropped off a cliff. There’s probably a lower percentage of buyers coming through the properties in the last 3 to 4 months, our numbers haven’t been quite as high with buyer inspections. The amount of days a property is on the market is a little bit longer than it was 12 to 18 months ago. Back then we were selling property within 1 to 4 weeks on average. Now it’s 4 to 8 weeks on average.
There is an election to consider too. Sometimes buyers will sit on the fence until after the election is over, waiting to see what will pan out politically. But there are other buyers who didn’t factor the election in, and went ahead and bought properties. For buyers looking for a family home, they don’t tend to factor in the ups and downs.
If they see something they like, and they will live in it for a long time, they buy it. The election has come and gone now, so I am looking forward to seeing how we perform. While houses are taking longer to sell, the market is still holding solid and there have been no drastic changes in the market downwards.
Investment Property Advice
If you are thinking of buying an investment property, it all comes down to returns. Be aware of all the costs involved. If you are buying into body corporate, you have to factor in body corporate fees. Also, you need to factor in how old the building is, or if any works need to be done on that building in the future.
If you are looking to buy a unit, you need to know how healthy the sinking fund is. A sinking fund is the weekly levies that you pay as a property owner on a unit. That money is for maintenance on the building – things like the lawn being mowed, or the pool being maintained, and any structural work like the roof being re-tiled or the building being painted etc. That money is drawn from the sinking fund. If it is an older block of units then 9 times out of 10 there will be maintenance involved and money will need to be spent on this. But don’t let that turn you off a unit.
While people who own their own houses don’t pay into a sinking fund, they do have ongoing maintenance costs throughout the year.
Advantages of Units
The good news when you own a unit, is that the maintenance is never your responsibility. If you are considering buying a unit, new builds do have their plusses. The maintenance involved will be low. It can be 10 or 20 years before something needs to be looked at or done in a major way to the property. So the sinking fund will be quite healthy.
With older blocks, you need to be wary of the ones right near the beach or on the beach. You may see cases of concrete cancer caused by the salt. But then again, who doesn’t want to be close to the beach! That’s why we live at the Coast! So these are all things to consider.
If you are looking to buy an investment property, the rental market is quite strong across the board right now. For investors on the Gold Coast it is a bit of a no-brainer, the returns are going to be good because the rents are high. The rental market is currently strong for a lot of different reasons. There’s a lot of infrastructure work going on, the building industry is thriving on the Coast, so with that comes jobs and employment, all that increases the population.
There’s a lot of people looking for a lifestyle change, people from Melbourne and Sydney are cashing in on the high property prices down south while they can. They sell down there and buy up here. They also buy investment properties here with a view to move to the Coast sometime in the future. These interstate buyers create competition for local buyers.
The sales prices will also dictate the rental prices as well. Population growth will always push property prices higher. So, if people can’t afford to buy right away, they rent. Then rentals become a little bit scarcer, because of the competition, then that boosts the rental prices. I am finding that a lot of prospective tenants will offer to pay a little bit more in rent, to eliminate the competition, much in the same way the market in sales operates.
Houses As An Investment
If you buy a house rather than a unit, you are probably going to see a little more growth. This is because you own it, there’s no body corporate, and there’s no restrictions on what you can and can’t do in terms of renovation. You don’t need to ask permission from the body corporate to change it. If you are not restricted in what you can do to a house, you can add a lot more value to it. Generally speaking, for an investment property, in most cases you pay more for a house, but you are getting more of a return, in rent per weeks. Whatever property you buy, as an investor there will always be ongoing costs associated with any property.
Most buyers looking for a family home are doing the rounds, comparing houses in the areas they want. They are looking for value for money. They find what they want. But, the buyers make the mistake that maybe the agent is bluffing and there’s no competition to buy. But there is still competition for houses. If it is something that ticks all the boxes, don’t dwell on it. Because even in a slower market, you still have to act. Houses are still selling in a reasonable time frame. If you love it, move fast! ■
Expert Author Bio
After earning a degree from the University of California at Berkeley and playing in the NFL, David Lonie is back on the Gold Coast. David is a former PBC high school student, athlete and Palm Beach local who knows the area well. David has set sales records across the board over the last 10 years. One of the key elements of David’s success comes from his ability to correctly identify the target market. By strategically customising each campaign, his team gets the phones ringing, inspections flowing and results happening. Contact: 0432 349 839
Once you have your dream home, perhaps you can settle down with a pet?