A combination of factors such as a shortage of stock, new infrastructure (such as the success of the light rail) and significant evidence of new residential projects under construction has firmed buyer confidence within the local property market on the central Gold Coast. It has been a fairly positive year in terms of price growth across all price brackets.

The strongest performing sections of the property market in the northern corridor between Brisbane and the Gold Coast in 2015 were house and land packages and duplex units. Suburbs such as Ormeau Hills in which the Ormeau Ridge estate is located, and Pimpama in which Gainsborough Greens in located, have seen arguably the best growth throughout the year. These estates are favoured by owner-occupiers and have seen increases in value between 5% and 10% during 2015. Duplex units have also performed strongly with prices paid for new 3-bedroom, 2-bathroom, attached style duplex units in Pimpama increasing from low $300,000s at the start of the year to mid $300,000s.

The continued low interest rates combined with a gradually strengthening economy can be seen as underpinning the positive growth in both values and demand in this area. The commencement of work on the Exit 54 upgrade and the proposed Coomera Town Centre Shopping Mall development have also furthered interest in the area.

At the start of the year we cautioned against lesser quality house and land packages being sold to interstate and overseas investors at inflated rates. This continues to be a problem in this area with construction commencing on numerous new estates throughout the year. If rental demand does not meet the upcoming available stock then we could see an oversupply of extremely similar dwellings coming on to the market.

The central north area has been performing quite strongly with many agents reporting stock shortages, particularly in areas around the Broadwater, Southport and Ashmore.

Established dwellings between $500,000 and $700,000 in these areas have seen increases of around 5% and 10% since the start of the year. Furthermore residential sites in Labrador, Southport, Biggera Waters and Paradise Point with re- development potential are in demand.

Land values in waterfront suburbs have also strengthened particularly Runaway Bay. Sale numbers between $1,000,000 and $1,500,000 have virtually mirrored 2014, while land values have increased by approximately 15% to 20% in this time. Quality, renovated houses are achieving premium prices close to the peak levels of 2007/2008.

The most positive news for the central north zone has been the announcement of the second stage of the light rail which will connect to the heavy rail at Helensvale. There is a buzz around Helensvale as to the positive flow on effects for property and businesses.

New medium rise unit development around Harbour Town at Biggera Waters including the East Quays development and Waterpoint Residences have sold strongly to owner-occupiers and investors at prices typically from $450,000 to $650,000 for 2- and 3-bedroom configurations. The first stage of Waterpoint Residences is nearing completion and is around 80% sold out (as at November 2015). The development will contain six stages with over 600 units on completion.

From early in 2015 the sustained growth has been expected and predicted. All indicators remain positive from many areas and there is no shortage of buyers in the low interest rate environment from overseas and locally.

Residential housing in Broadbeach Waters and Mermaid Waters has remained highly sought after and there have been no signs of this market cooling off. There is also a growing trend in these two suburbs where many old dwellings have been purchased and knocked down for new duplex developments. Local agents have reported fairly strong demand for these new duplex units which is generally a good indicator that local market conditions are very buoyant at the moment.

As predicted in our Month in Review article published in February this year, the detached housing market in the $500,000 to $800,000 price range within the central areas of the Gold Coast has continued to be a strong performer.

To give an example of how hot the market is within Mermaid Waters, we are aware that 16 Firmin Court, Mermaid Waters sold under the hammer in August 2015 for $650,000 to a local purchaser. The property comprises an original, single storey, face brick, 3-bedroom, 2-bathroom dwelling with detached double garage on a 614 square metre allotment. The property requires a full renovation. It sold well above the agent’s expectations.

Both detached housing and townhouse and villa units in Robina have been in high demand from owner- occupiers and investors.

There have been good levels of demand for waterfront housing particularly under $1,500,000. Along with Broadbeach Waters and Mermaid Waters, we have seen fairly strong price growth for canal front and river front properties in localities such as Isle of Capri, Sorrento and Benowa. While there has been increased sales activity for prestige homes ($2,000,000 plus), buyers in this bracket are still quite discerning with more stock to choose from.

We note that 9 La Scala Court, Isle of Capri sold in July 2015 for $1,950,000. The property comprised a fully rebuilt and renovated single storey, lightweight clad, 4-bedroom, 3-bathroom dwelling with a 2-car attached carport. The property has a south-westerly aspect to the canal with approximately 18 metres of canal frontage appreciating local, canal and river views. Ancillary improvements included timber decking, pebblecrete in ground pool with tiled surroundings and frameless glass pool fencing. The land Area is 779 square metres. It previously sold in April 2014 for $1,035,000 in original and dated condition.

The highrise market within Surfers Paradise, Broadbeach and Main Beach is starting to gain some momentum, apart from fully serviced apartments. There appears to have been steady price growth for second hand unit product over the past 12 months. Many new high rise towers are currently under construction which is quite a contrast to two years ago. It will be interesting to gauge the level of foreign investment in these new towers over the next 18 months and whether prices for this stock will move in a positive direction.

As predicted back in February, market conditions on the southern Gold Coast in established areas such as Palm Beach, Miami and Burleigh Heads continued to strengthen throughout the course of 2015 with the majority of buyers being from the local area. While there is very limited land available in these fully established areas, prices for knock downs and fully original dwellings with limited added value to the property as a whole have risen by as much as 10% to 15% since the beginning of 2015, which was predicted in our February Month in Review.

Casuarina on the Tweed Coast also performed according to our predictions with very limited land available and a continued increase in demand for land. A good example of this (and a trophy sale) was 34 Dianella Drive, Casuarina, which is located within the Miramar estate (considered to be one of the inferior new residential estates in the area). This property sold from the developers in February 2015 for $385,900 which was considered a strong sale price at that time. The property was since sold in September 2015 for $480,000 to a local buyer. This represents almost a 20% increase in value in the space of seven months. The property sold within the first month of being offered, a common occurrence for most properties in the sub $750,000 bracket on the Tweed Coast and Southern Gold Coast throughout the later half of 2015.

There were no weak performers in the southern Gold Coast, however high rise units and rural residential markets have not strengthened to the same extent as the standard residential housing and land markets, however the overall market in both sectors has also improved.

There are a number of new projects which have recently been released or are to be released in the near future including the redevelopment of the old Palm Beach caravan park by Sunland and soon to be completed Casuarina Town Centre.

There have been no major surprises which impacted the market, with interest rates remaining very competitive. There is much more positive activity occurring with reduced selling periods, a higher number of buyers and more competition for properties offered for sale.

Slow and steady is winning the race in the Scenic Rim locality in 2015. Most markets showed improvement in interest levels and sales rates across 2015, however price point remains of most importance for vendors. Most sectors performed well in comparison to the previous 12 month period and when priced in line with the market, agents are reporting sales within a few days.

Yarrabilba continued to be the star performer with all lot types showing up to 15% price growth for land values through the year. Lend Lease reported up to 50 sales per month and attribute the strong second half of the year to the announcement of the commencement of major infrastructure within the community. The announcement of a full service Coles supermarket, independent Catholic school, Caltex service station and tavern has spurred interest from the local market now that these services and facilities are becoming tangible.

Established housing has shown nominal growth within the regional centres of Jimboomba and Beaudesert, however there appears to be less stock relative to the start of the year and the time on the market is considerably less.

One of the star performers within the Jimboomba to Beaudesert growth corridor is Cedar Vale and the new release of land within the Jimboomba Woods estate. At the start of 2014, a 4-bedroom, 2-bathroom house on a 4,000 square metre allotment was selling for around $440,000. The latest sale of a similar house on a similar size lot is $475,000. This price growth has been underpinned by limited land stock within the area and the finalisation of upgrades to the Mount Lindesay Highway. Moving to the north-east, QM Properties released their new acreage estate known as Jimboomba Woods and have steadily increased prices from around $210,000 for a 4,000 square metre allotment at the start of the year to around $245,000 more recently.

The rural residential and rural lifestyle sectors remained stable through the year, with buyers placing emphasis on proximity to services, value for money, infrastructure and usable land. Non prime property remained static on price growth compared with the previous year. There are a number of larger rural holdings within close proximity of regional centres that still represent good value for money and good lifestyle options with sale prices still below replacement cost of improvements. Steady as it goes for this market.

Looking back over 2015, the predictions made at the start of the year have panned out within the marketplace and the markets highlighted for growth have materialised. On a whole, this year we would rate our predictions a nine or ten out of ten!

November 2015

Southern Gold Coast/Tweed Shire
Investors are playing a key role in the property market on the southern Gold Coast and in the Tweed Shire. We note investors are very active in the sub million dollar market, in particular in beachside locations.

Investors in the market place are a mixture of both local and interstate, in particular from Sydney and Melbourne.

Typical investors are interested in properties with a steady or good rental return with low overheads.

The price points for localities such as Burleigh Heads, Burleigh Waters, Miami and Palm Beach is around $500,000 to $550,000 for established housing. Duplexes and units in these localities are around $365,000 and $400,000.

We believe that investor activity at its current level is not sustainable over the medium term in the property market.

If investor demand did start to drop, it would have negative implications for the market on the southern Gold Coast and in the Tweed Shire as investors are prevalent. The demand for property would slow and prices would likely fall due to more stock being available to purchase.

Coastal North
Investors in the costal north area are moderately to highly active, with the typical investor appearing to be mainly international using local builders and smaller project developers.

Investor activity in the central high density beachside locations has traditionally been driven by both local and non local investors. Lately we are seeing an increased amount of non local and particularly Asian investors, who are prevalent on new product.

New residential stock which fits criteria for Foreign Investment Review consideration and approval seems to be appealing overall to these investors on Hope Island, as this location is pre-approved for Foreign Investment Review.

General housing stock in and around the Southport CBD and spreading into Labrador and Ashmore are also appealing to these investors.

In central Surfers Paradise, investor activity is steady to strong with the a sub $500,000 price point seeing the most activity. However, high body corporate fees and property outgoings are deterring investors. For example Unit 26, The President, at 29 Northcliffe Terrace, Surfers Paradise sold in May 2015 for $358,000. This is a circa 1973, 2-bedroom, 1-bathroom unit of 86 square metres. It is an absolute beachfront development comprising 30 units on a parent site of 1,533 square metres. The agent reported that due to the high underlying land value, rates were circa $5,000 per annum plus the body corporate fees of approximately $150 per week made the unit unviable for many potential investors.

Investors are looking for larger dwellings on larger parcels with Residential Choice classification that can be split for higher density development such as duplex and triplex development.

The most intense demand however appears to be for residential estates close to the Southport CBD or highly regarded established precincts such as The Southport School (‘TSS’) location and areas with Broadwater proximity.

Investor activity away from the beach side locations is stronger than previously, with villas and townhouses in larger cluster unit developments in the more outlying suburbs having seen some increase in price levels from low to mid $200,000s up to high $200,000s.

Local owner occupier buyers are competing with local and interstate investors in these outlying suburbs for freestanding houses. Pacific Pines which was developed through the 1990s and 2000 has seen healthy increases in price levels over the past 18 months with entry level now circa $380,000. This locality is well serviced for schools, shopping and transport, appealing to both investors and owner occupiers alike.

General sales for duplex and triplex parcels reflect values of $190,000 to $240,000 per dwelling site in the Southport CBD area.

In more prestigious areas such as Paradise Point this range is running at $275,000 to $325,000 per dwelling site.

Interstate buyers are purchasing new units, however, typically at levels above local market price points.

Student accommodation has slowed with a recent and apparent slight drop in values. We have not seen any activity on flats, however these are perhaps more tightly held.

Despite recent rate rises signalled by Westpac which may affect the larger city markets, values on the Gold Coast are still comparatively low and appealing to interstate and foreign buyers. There is still room to improve as Gold Coast was hit very hard after the GFC.

Upper North
Investors in this area are very active indeed and have been very predominant in this area for nearly a year. The majority of investors are Sydney buyers and to a lesser extent Melbourne buyers for established housing. The new housing is targeted by a mix of interstate buyers from all over Australia and Chinese buyers.

Established housing investors are mostly active in Eagleby and Beenleigh areas with price points around $240,000 achieving circa $320 per week rent or 6.93% yield.

New housing investors are mostly active in Pimpama and Ormeau where the price point for a typical 4-bedroom, 2-bathroom, 2-car house on a 400 square metre lot is between $460,000 and $480,000 achieving circa $420 per week or 4.55% yield.

Investors in the upper north area are far less active in the townhouse and duplex unit market, accounting for only a very small percentage of sales. We are of the opinion that investors prefer housing due to historically stronger capital growth compared to units.

We believe that the investor activity is sustainable in the medium term with interest rates currently at record lows. Sydney investors can’t stay away in particular with the median house price in Sydney over $1 million. This shows that these investors can buy four houses for the price of one Sydney house.

Whenever banks tighten lending policy it will have an impact on the market, but how much impact is a case of let’s wait and see.

October 2015

The northern coastal region of the Gold Coast has continued to show strong levels of demand across land, houses and unit sectors. Houses are proving the strongest sellers as purchasers and potential purchasers are showing signs of panic as they continue to miss out on properties due to the high demand and reduced stock levels.

In some cases purchasers are offering above the asking price in order to secure the sale as they have previously missed out on several other properties. This has been particularly prevalent in the more central suburbs, such as Ashmore. One example is 8 Kittani Crescent, Ashmore where the asking price was $569,000 and the purchaser, a first home buyer, submitted an offer of $575,000. We have seen price increases across the suburbs and as house prices continue to rise we are also noticing an increase in demand for duplex units, being a more affordable option.

Resale prices of land are increasing in Hope Island’s newer estates however we have noticed that the purchasers are generally from interstate and some of the prices are above market levels with vendors keen to capitalise on the ‘mania’ in the market at present as well as the interstate buyers purchasing power and lack of local market knowledge. We have also noticed that some builders are capitalising on the mania and lack of local market knowledge with interstate to be erected dwellings with high rates per square metre for basic quality dwellings. Of particular concern are the low deposits offered by a large portion of purchasers as they appear to be trying to secure property at the low interest rates.

“we have noticed that the purchasers are generally from interstate and some of the prices are above market levels with vendors keen to capitalise on the ‘mania’ in the market at present as well as the interstate buyers purchasing power and lack of local market knowledge”

Looking at the current state of the market in the central areas of the Gold Coast, we have seen increases in values in all property types. The price sector that seems to be running the hottest is the $400,000 to $800,000, these properties are generally detached dwellings suitable for families who are owner-occupiers. We note that properties in this price range are now selling over previous peak prices of 2007. This has been fuelled by the limited supply and high demand.

It is quite common for properties to sell within one week of being listed after receiving multiple offers. An example of a house price increasing in value is 7 Ulrike Way Benowa, it is currently under contract for $825,000, previously sold for $700,000 in March 2014. The property comprises a single level, circa 2000, modern style, rendered brick, 3-bedroom plus study, 3-bathroom, dwelling, with concrete tiled roof and 2-car garage with a pool. The land area is 673 square metres. The property sold within a few days of being on the market. The sale shows a capital gain of 17.8%. The unit market has also picked up from Surfers Paradise to Pacific Pines, most of these buyers have been interstate buyers looking for a cheaper investment property compared to Sydney and Melbourne. An example of this increase can be seen in a typical 3-bedroom, 2-bathrooms and 1-car garage townhouse in Pacific Pines. The townhouses were selling for $240,000 to $260,000 earlier this year, now they are around the $290,000 mark.

New developer stock has been selling quickly with a lot of international demand; the area that has been the hottest is Robina with most of the developers almost sold out of their current stock. The only sector that hasn’t seen this rapid growth is the $1.5 million plus market. We believe there is good value in this sector as this price range still remains out of reach for the majority of the market. This sector will start to pick up as a flow on effect from the lower price range as they start to increase. We believe the strong performance in the residential sectors will be sustainable over the coming year if the interest rates remain the same, once the rate starts increasing the market will start to ease off.

In 2015 there has been continued improvement in the residential property market across most sectors but not all sectors. The vacant land sector has perhaps been the strongest with the majority of estates having sold out or close to selling out. There is reportedly no developed stock available in Casuarina, with resales very strong. There has been a recent resale of a 500 square metre allotment in The Pocket for $520,000 which was originally purchased off the plan for $395,000. There has been an improvement in prices for vacant land in Terranora as demand is now stronger than supply. The Hidden Valley estate at Tallebudgera is almost sold out. Sales have been strong at the observatory and Varsity Heights estates at Reedy Creek and also strong in Palm Beach Heights at Elanora. From Miami to Pottsville the housing sector has continued to improve throughout 2015, being strongest in the under $750,000 price bracket.

In most localities demand is outstripping supply. As Valuer’s, in a lot of cases sales evidence is not directly supporting new sales. There has also been strong sales activity in the over $750,000 price bracket in waterfront localities such as Currumbin Waters, Palm Beach and Burleigh Waters. Duplex units have been selling well across the board along with townhouse and villa units in small complexes. A significant percentage of sales of these properties are investment sales. A townhouse unit in a large complex at Burleigh Waters is currently under contract for $325,000 whereas the highest sale in the complex prior to this sale was approximately $300,000 At Burleigh and Palm Beach there has been some recent building activity for good quality duplex type units, with developers confident of making sales over the $750,000 price bracket. Some recent sales include a new duplex unit at Palm Beach for $800,000 and another duplex sale at $980,000. There has recently been some strong sales activity for low-rise units along The Esplanade at Burleigh Heads. Sales activity and market demand for lowrise unit in the under $500,000 price bracket has also improved. There have also been some capital gains for well-located high-rise units. There has been a recent sale of 2-bedrooms, 2-bathroom unit in the rear Ambience building at Burleigh Heads for $730,000 which previously sold in June 2011 for $625,000.

Caution remains for low-rise and high-rise units in large, older buildings in secondary locations where high body corporate fees may apply. Local agents are reporting limited levels of demand for similar properties.

September 2015

The market for attached townhouse/villa and apartment product on the Gold Coast has steadily improved over the past two to three years. While initially, this improvement was focused on established, resale stock as these market segments improved, we have also seen improved demand shown for new unit product, particularly for new townhouses and apartments priced below $500,000.

Furthermore, while new home unit product on the Gold Coast continues to be mostly purchased by investors at price levels which are considered to be high based on local comparable market resale evidence, the firming in the established markets, has to some degree, started to bridge the gap between new and second hand dwellings. This has had a resultant positive impact on the settlement risk for ‘off the plan’ sales, with most project marketing agents reporting of reduced ‘fall over’ rate for pre-sale contracts over the 2014 and first half of 2015 period.

Local real estate agents confirm that prevailing conditions in most market segments on the Gold Coast are buoyant, reflecting improved levels of demand, increased sale volumes, shorter selling periods, reduced stock availability and upward pressure on sale price levels.

As a reflection of the favorable market conditions, there are a number of new medium and highrise apartment projects currently being marketed on the coast, and most specialist marketing agents are reporting of good sale volumes for product priced below $500,000 and that there has been price growth in recent releases over the past six to 12 months. The concern now lies as to the number of projects which are proposed and as to whether the demand will continue to sustain the potential future supply of new product.

In the established market segments, potential opportunities still appear for resale residential apartments in central beachside locations between Burleigh Heads and Main Beach, particularly for highrise stock in large yield buildings. The reality being that the sheer volume of resale stock that can be on the market at any one time in these high density suburbs, or in a particular building, can keep a ceiling on price levels, despite the surging detached housing market in the same areas.

These areas all benefit from excellent location attributes and amenity and typically provide resale units with good size floor areas and at a lower price point (both quantum and on a rate per square meter), when compared to the price levels for smaller new apartments in buildings currently being marketed for sale ‘off the plan’.

Over the past two to three years, there has been a large focus on medium rise apartment buildings n the Southport CBD following the release of the streamlined Southport PDA approval process. This has led to a larger volume of approvals being issued for Southport, some of which are for very large yield highrise buildings. While development to date has focused on smaller projects, where demand appears to be adequately absorbing supply, there is a degree of concern to the overall volume of approved stock that potentially could be brought to the market if a number of the approvals were acted on. Hence, future supply levels and sale volumes for new apartments in Southport could be an area to keep an eye on.

We note, however, that there are a large number of 100 plus apartment highrise projects approved within the Southport PDA area and that a proportion of these have been obtained by ‘speculators’, with the intent to on sell the approved site, likely to overseas interests. To date, we have seen only limited local developers or lending institutions show an appetite for these larger scale developments in Southport, and the reality is that while a larger potential supply of apartments is approved for Southport, a number of the proposals, may in fact, not be acted on in the current development cycle.

In the improved market, there has been a noticeable increase in the number of proposed fringe residential apartment projects in areas which are traditionally regarded as more suburban low density housing locations. These projects are predominantly
being developed in multiple low and medium rise apartment buildings where construction can be staged in 12 month construction phases, and produce new units at lower prices. These projects have generally met with good sale results, particularly for the central periphery areas of Varsity Lakes, Robina, Bundall and Harbour Quays, which benefit from significant existing amenities, shopping facilities and transport infrastructure.

We comment that a large portion of new apartment projects on the Gold Coast are progressively providing smaller apartment product when compared to historical standards, in an effort to suit changing market preferences with a greater focus on lower price points.

Interestingly, while we have seen a significant recent increase in the emergence of new apartment projects released on the Gold Coast over the past 12 months, there has been limited new medium density projects appear in the market. However, the absence of new released townhouse/villa development is not considered to be an indication of a slowing market. Rather, the market for new medium density dwellings has been strong over the past few years, however the now very limited supply of townhouse development sites, coupled with the increased appetite for new apartment product in established residential areas, has resulted in a limited pipeline of new projects.

Of those projects which have been released in the market, most are situated in Robina, Carrara and Hope Island and provides new units priced greater than $450,000 and mostly, in excess of $500,000. In the very low interest rate environment, this product appeals to both investors attracted to the good rental returns and also, to owner-occupiers who have been increasingly priced out of the detached housing market. Furthermore, a number of new releases within these projects have sold out ‘off the plan’, prior to construction being completed.

August 2015

The majority of new construction on the Gold Coast is within the growth region from Hope Island north to Beenleigh and west to the Scenic Rim.

Generic project housing varies in price firstly as a result of who the client is and then by the quality of inclusions. Traditional project home companies generally provide better value than house and land investor packages, but not always. Valuation of off the plan housing can be a minefield as rates for very similar products can range from $1,100 per square metre to over $1,600 per square metre. At the end, the valuation assessment (including the land) relies on sales evidence of similar nearby houses, with an allowance made for age and condition.

Looking back to the costs discussed in the 2009 Month in Review, building costs do appear to have increased at the lower end of the scale, but perhaps not a great deal for the prestige and higher quality market.

Hope Island/Helensvale
In Helensvale, estates such as River Links and The Peninsula have been established over the past ten years and most of the vacant sites remaining will be developed in the next few years.

These estates have building covenants which attract architecturally designed and quality project packages that range on a rate per square metre basis from $1,100 to $1,700 for living area. These dwellings will mostly feature attractive mixed cladding, stone benchtops throughout, ducted air-conditioning and often leave landscaping and pool packages outside the building contract.

These estates have smaller lot sizes ranging from roughly 300 square metres to 600 square metres and therefore attract investors, project builders and turnkey packages.

These building contracts are typically $200,000 to $275,000. Floor plans are usually compact 3-bedroom plus study or 4-bedroom, with bathroom, en suite, double garage and small covered patio. Ground improvement inclusions are basic fencing, aggregate driveway, turfed lawn and water tank. The rates per square metre of living are generally $1,000 to $1,200 which has crept up from our previous review in 2009. Builders and developers have reported that the cost is generally higher due to raw materials costs and green compliance.

Far Northern M1 Corridor
There are numerous new estates in the far northern corridor between the Gold Coast and Brisbane with vast quantities of new dwellings under construction. The suburbs where most of this construction is underway include Ormeau, Ormeau Hills, Pimpama, Coomera and Holmview.

Most dwellings in these suburbs fall into two categories, being either investor stock or owner occupier properties. Investor properties typically comprise a 4-bedroom, 2-bathroom onground dwelling with a double lock up garage and usually have a more average standard of fitout, ie laminate benchtops and cupboards and brick exterior. Building rates per square metre vary widely with some builders taking advantage of unsuspecting investors purchasing properties sight unseen. Costs can range from between $1,000 per square metre to $1,300 per square metre of living area for very similar constructions. Trends worth noting in this investor section of the market are that specifications are starting to upgrade with stone benchtops and render to the street front aspect of the dwelling becoming more commonplace. Additionally dwellings and lot sizes are becoming smaller with the smallest known allotment available being a 213 square metre block in Holmview.

Owner occupier properties, as expected, tend to have a higher level standard of finish with property owners opting for features such as ducted air conditioning, stone benchtops, high ceilings and good quality light fittings. Building rates per square metre are more alike for dwellings built for owner occupation which may point to property owners shopping around and comparing prices from more than one builder. Most dwellings constructed by owner occupiers have analysed building rates of between $1,100 to $1,250 per square metre.

There is limited prestige residential locations in the far northern corridor between the Gold Coast and Brisbane other than the estates offering allotments with canal frontage in Jacobs Well and Coomera Waters. The standard of finish increases in these estates with rates per square metre reflecting this and generally falling between $1,300 and $1,400 per square metre.

Building costs have definitely increased since our 2009 edition on the same topic. This edition quotes rates of between $900 and $1,000 per square metre.

North Western M1 Corridor
This area is seeing a number of existing estates releasing new stages and the emergence of new estates. Existing estates with new stages include Riverstone Crossing (Maudsland), Highland Reserve and Coomera Springs. These estates are showing consistent land value increases, particularly Riverstone Crossing. Park Central at Oxenford is a new estate on Kopps Road which has reportedly nearly sold out, predominantly to investors.

New dwellings are being purchased by owner- occupiers and investors alike. For owner occupiers build rates tend to show $1,000 to $1,250 per square metre for a turn key product. Build rates for the larger building firms who offer inclusions such as stone benchtops and air-conditioning remain competitive and within market parameters. Higher levels of inclusions tend to be at the higher end of the scale sometimes even reaching $1,300 per square metre depending on where or in which estate the proposed dwelling is situated. Features such as ducted air conditioning become the norm at this level.

Build rates for investor stock tend to vary greatly between builders. Asking rates tend to range between $1,000 and $1,500 per square metre, some of which are well beyond market parameters. There are often significant differentials between levels of finishes and standards of inclusions which is often attributed to the product being sold to investors. Generally rates adopted for brick and tile entry level dwellings as a turn key product are valued at circa $1,000 to $1,200 per square metre depending on size. An as if complete duplex pair was recently valued at circa $1,050 per square metre of living area which is very competitive. In this area, there is very limited upper end product hence build rates would rarely be expected to top $1,300 unless in exceptional circumstances.

Build costs have increased since 2009 at a fairly consistent rate. It was generally accepted that during the GFC it was land values, rather than build rates which declined. There is still evidence suggesting that people are purchasing existing product below replacement cost.

Southern Gold Coast and Tweed Coast
There are a number of new and developing residential estates on the Tweed Coast at present, and a very small number on the southern Gold Coast. The majority of new construction is in the Casuarina and Kingscliff/Salt precinct in which the majority of properties are to be owner occupied or holiday lock up style homes. Land prices are very strong and in some cases, prices have almost doubled in value since 2012.

For a basic, single level, brick and timber dwelling with metal or tiled roof construction you are looking at a cost of approximately $1,100 to $1,300 per square metre on a gross floor area basis, with project home builders such as GJ Gardner, Perry Homes etc. This cost obviously increases with a higher quality of finish. For $1,100 to $1,300 per square metre, you
are looking at laminate cabinetry, stone benchtops to kitchen, laminate benchtops to bathrooms, split system air-conditioning and other basic modern fixtures.

Builders constructing a higher end product are charging much higher rates, in the vicinity of $1,600 to $2,000 per square metre on a gross floor area basis. This may be for an architecturally designed dwelling with voids over living areas, high raked ceilings, ducted air-conditioning and high quality inclusions.

Luxury Housing
New luxury housing construction is on the rise. This is occurring as demolition and rebuild in the central waterfront suburbs of Paradise Waters, Isle of Capri, Broadbeach Waters, Palm Beach, or the beachside at Mermaid Beach.

These attract owner occupiers who, with leading architects, design and construct luxury homes ranging in size up to 1,100 square metres. Many of the houses are full concrete construction with basement carparks. Breakdown of building contracts analyse from a low of $1,600 to $4,000 per square metre for the living areas. Generally, construction rates per square metre have not increased markedly over the past five years due to less demand.

Scenic Rim
With two satellite cities in the area, Yarrabilba and Flagstone, and the release of the new master planned community of Oakdale Estate at Beaudesert, the Scenic Rim and Lower Logan area is going through a construction boom at the moment. These types
of estates give rise to the standard project builder, however over recent years, the stereotype of a basic, run of the mill house at a fixed rate has changed dramatically.

There are two distinct levels of project builders in these estates. The first is the investment product builder who offers a standard level of finishes typically being basic stone benchtops, stainless steel appliances, ceilings fans, two split system air conditioners and a full turn key product including landscaping, fencing and driveway. Rates per square metre for this style of dwelling typically range from around $1,000 to $1,250 for living area depending on the size of the dwelling and site issues (such as small lots where materials need to be walked in by the trades).

The second project builder is now moving more in to the custom range type of construction. While still offering good rates per square metre and a base series of plans to choose from, the end product is definitely determined by individual taste and budget. Buyers have the option to finish the house themselves with their choice of carpet, main floor area tiling, landscaping and driveways or have the builder complete a turn key product. These dwellings are typically larger than the investment product with more features such as high ceilings, stacking or bi- folding doors to external areas and better quality of finish. The economy of scale kicks in here, with these builders being able to offer a customised product at not much more than a project builder due to the larger living area sizes and the benefit of bulk buying power and negotiation with suppliers. Builders that fit into this category typically have a good presence in the display villages.

Moving on to the more established areas, there tends to be the emergence of the custom builder for second, third and above home buyers who know exactly what they want in their home and want the ability to deal directly with the builder through each step of the process. These homes are typically larger and well appointed with good quality fittings and more creature comforts such as fireplaces, polished timber floors, high ceilings with architectural features, top of the range appliances and an individual look and feel. Rates per square metre vary significantly in this category as some of the project builders are beginning to offer a more customised home for around $1,500 per square metre, but can be in excess of $2,000 per square metre depending on the features and inclusions.

For example, a custom built, midset, Hardiplank and Colorbond, Colonial reproduction 3-bedroom, 2-bathroom home of 188 square metres of living, 38 square metres of outdoor and deck and a 40 square metre garage was contracted at $444,760 and included water tanks and sewerage system. This equates to a rate of around $2,000 per square metre. For a project style, two level, brick and Colorbond home with 4-bedrooms, 2-bathrooms and 271 square metres of living, 33 square metres of outdoor area and a 37 square metre double garage was $385,117 and excluded floor coverings, water tank and sewerage system. This contract equates to a rate of $1,250 per square metre of living area – a lot more home but without the inclusions of the custom builder.

July 2015

Across the southern Gold Coast and in northern New South Wales there are opportunities for investors and owner occupiers to purchase property in the $500,000 price range. The areas with the greatest demand are Burleigh Waters, Miami, Palm Beach, Elanora, Salt and Casuarina. These suburbs are well located close to amenities and the beach. The areas should offer reasonable growth if held for the long term. An example of short term growth is a property located at 7 Kelburn Close, Banora Point which sold in March 2014 for $527,000 in below average condition. The dwelling has been partly renovated since sale date (new bathroom and general tidy up works completed) and is currently under contract for $665,000 as at May 2015.

Perhaps you’re looking for return on your investment like so many interstate investors of late. In the southern Logan market around Beenleigh and Eagleby, for a lazy $500,000 you can buy yourself not one but two investment properties. Here are a couple of very recent examples:

43 Temma Street, Eagleby is under contract as at June 2015 for $240,000 in fair condition. Property comprises a basic, on ground, circa 1984, brick and metal roof dwelling with 3-bedrooms, 1-bathroom and 1-car carport with a tenant currently paying $310 per week.
25 Chapman Drive, Beenleigh sold in May 2015 at auction for $250,000 in fair condition. Property comprises a basic, on ground, circa 1984, brick and metal roof dwelling with 3-bedrooms, 1-bathroom and 1-car carport. Agent advises tenant will happily pay $320 per week. For a total purchase price of $490,000 you get a gross yield of 6.68%. Not bad!

Recent market activity has seen some suburbs which may have previously been overlooked for some owner occupiers, increase in value to figures above 2007/2008 price levels. For example 61 Macquarie Avenue, Molendinar was purchased for $550,000
in November 2008 and has recently gone under contract for $610,000 in largely the same condition. Other similar suburbs that have recently seen a jump in entry level prices include Coombabah and Helensvale, with first home buyers (in most cases) having been pushed further out, away from more central and coastal suburbs.

Another example of market movement can be seen in the recent sale (under contract) of 8110 Magnolia Gardens Court, Hope Island, being an attached townhouse with golf course frontage, for $478,000 having last sold in September 2013 for $425,000 with only some light refurbishment in between.

Local agents are consistently reporting having more potential purchasers than properties to sell, which poses the question… Where to next for first home buyers? Eagleby perhaps.

Labrador offers good opportunity for investors with some 2-bedroom, 1-bathroom walk-up style units selling in the early to mid $200,000 range and being let for over $300 per week, often in original condition and within walking distance of the Broadwater.
There has been considerable improvement in property values for residential property in the more central areas of the Gold Coast over the past 12 months. With this firming in the market, the opportunities to buy a freestanding dwelling on 500 square metres of land for around $500,000 or less within well-located suburbs such as Benowa, Mermaid Waters and Robina are now becoming extremely limited. Local real estate agents are still reporting strong levels of demand for this type of residential property and stock levels are very low which has inevitably put upward pressure on property prices. Investing in entry level detached housing in this price range in the central suburbs of the Gold Coast has always been a solid option.

Examples of detached housing which have sold for $500,000 or less in the past couple of months include:
1 Chadstone Place, Robina sold in March for $500,000. Comprises a single storey, circa 1990, brick 3-bedroom, 2-bathroom dwelling with 2-car garage. Updated bathroom and pool. Land area of 482 square metres. Previously sold in September 2012 for $425,000;
10 Piccabeen Close, Robina sold in March 2015 for $490,000. Comprises a single storey, circa 2001, rendered brick 3-bedroom, 2-bathroom dwelling with double lock-up garage. Land area of 517 square metres. Previously sold in January 2013 for $415,500.
135 Bamboo Avenue, Benowa sold in May 2015 for $425,000. Comprises a small, single storey, circa 1980, brick 3-bedroom, 1-bathroom dwelling with 1-car carport. Original kitchen and bathroom. Land area of 598 square metres.

With increasingly limited reasonably priced opportunities available for detached housing in the central areas, buyers will be required to negotiate quickly or will be forced to look into a different property type such as a townhouse or villa.

Townhouse units or villas in the central parts of the Gold Coast are still considered to be good options provided that the associated body corporate costs are relatively low. Local agents advise that these properties are also in good demand and stick levels are relatively low, but buyers will likely find it much easier to find an opportunity at less than $500,000, which still offers good capital growth potential and a sound rental return.

Examples of townhouses or villas which have sold for $500,000 or less in the past couple of months include:
23/103 Salerno Street, Surfers Paradise sold in February 2015 for $407,000. Subject property comprises a two level, circa 2000, 3-bedroom, 2-bathroom townhouse and 1-car garage and 1-car carport. This is a gated complex with various facilities. Previously sold in June 2009 for $420,000.
56/7 Elliott Street, Surfers Paradise sold in January 2015 for $435,000. Comprises a two level, circa 2001 4-bedroom, 3-bathroom townhouse with 1-car garage. This is a gated complex with various facilities. Previously sold in December 2012 for $395,000.
28/34 Albicore Street, Mermaid Waters sold in February 2015 for $490,000. Comprises a single storey, circa 2000, 3-bedroom, 2-bathroom villa with 2-car garage. This is a gated complex with common swimming pool.

Overall it is quite clear that market confidence has picked up again and with interest rates still predicted to remain low, property investment on the Gold Coast should provide a solid option for those owner occupiers or investors willing to spend a lazy half million.

June 2015

The Gold Coast was one of the hardest hit regions of Australia following the GFC, with mortgagee in possession sale rates running above 6%. With the world financial situation, banks tightening their lending and LVR parameters, the Australian dollar soaring in value, the commodity boom and tourism being particularly hard hit, the perfect storm was unleashed.

However, that all seems to be well behind us now as the property market has recovered and turned upwards. Prices are well off the bottom across all residential property categories. Land values on the Gold Coast are reported to have increased by 10.7% over the past year according to the Queensland Valuer General’s 2015 annual report dated 5 March 2015.

Very positive economic changes have been driving the property market on the Gold Coast including:

• Increasing population. Current Gold Coast population is now at 535,000 (source: Gold Coast City Council web site) with projections of a population of circa 680,000 by 2021 (source: Queensland Office of Economy and Statistical Research Population Prediction Report dated 2011).
• Tourism is back stimulated by the lower Australian dollar and strengthened by new international flights direct to China and other parts of Asia.
• Increase in building development and infrastructure projects.
• Increase in number of new homes being built and apparent increase in number of substantial renovations of dwellings.
• Increased international investors including the very influential and growing Chinese investment market and cashed up Auckland based Kiwis.
• Increased interstate buyers with many cashed up investors from the very buoyant Melbourne and Sydney markets.
• Predictions of improving employment in the tourism sector and also boosted by the impending 2018 Commonwealth Games.

The increase in volume of transactions is particularly evident since the September 2013 federal election. According to our data, purchasers still favour the sub $500,000 price bracket which accounts for 71.5% of transactions, compared to 23.5% for $500,000 to $1 million and 5% over $1 million. While the prestige residential market proportionately accounts for a small part of the market in terms of number of transactions, the prices are on the rise on the back of overseas investors, locals and interstate buyers taking a shine to mostly waterfront houses and a limited number of luxury high rise units. Examples of sales in 2015 include:

Beachfront Houses:
123 Albatross Ave, Mermaid Beach $4,100,000
93 Hedges Ave, Mermaid Beach $5,600,000
25 Hedges Ave, Mermaid Beach $5,000,000
13 Oceanview Easement, Mermaid Beach $3,560,000
1 Surf St, Mermaid Beach $8,420,000
129 Jefferson Lane, Palm Beach $3,750,000
Waterfront Houses:
201 Monaco Street, Broadbeach Waters $5,800,000
247 Monaco Street, Broadbeach Waters $3,000,000
102 Amalfi Dr, Isle of Capri $3,300,000
36 Southern Cross Dr, Cronin Island $3,350,000
98 Admiralty Dr, Paradise Waters $3,200,000
25 Buccaneer Ct, Paradise Waters $3,600,000
117 Commodore Dr, Paradise Waters $6,600,000
37 Norsemann Court, Paradise Waters $3,000,000
31 Hampton Court, Sovereign Islands $4,000,000
64 The Sovereign Mile, Sovereign Islands $3,400,000
46 Shearwater Esp, Runaway Bay $3,490,000
100 Regatta Pde, Southport $3,100,000

Highrise Units:
Nirvana by the Sea Penthouse, Coolangatta $3,755,000
Liberty Pacific Penthouse, Main Beach $3,300,000
Soul Penthouse, Surfers Paradise $7,000,000

CENTRAL GOLD COAST
Growth has been solid throughout 2015 in the central areas of the Gold Coast as a result of increased demand across all property types within the area. The main reasons for this increased demand include the reduction of interest rates, improvements in rental returns and increased overseas investments in new developments.

Broadbeach Waters, Mermaid Beach and Mermaid Waters have seen strong growth (25% to 35% increase in land values). An example of this is 145 Allambi Avenue, Broadbeach Waters which sold for $760,000 in August 2013 and was recently resold for $1,015,000 with no improvements to the property.

The unit market in Broadbeach and Surfers Paradise has seen improvement in the lower price points in smaller developments. Most of these sales were to local and interstate investors as the rental returns were covering mortgage and body corporate costs. The larger high rise developments are still seeing limited growth due to the high body corporate rates restricting the overall investment appeal. We should see increased growth in holiday units as building managers are reporting a decrease in vacancy rates as more tourists come to the Gold Coast.

Robina, typically a popular location for young families, has also seen strong growth as it is within close proximity of amenities such as schools, shopping centres and transport. In recent months demand for rental properties has increased and vacancy rates have dropped as more construction jobs are available on the Gold Coast due to new developments. For example the average townhouse rental rate has increased $20 to $30 per week across all developments.

The majority of new developments across the central areas are showing high sale rates with developments like Sunland’s Concourse Villas/Marina Residences and Robina Land Corp’s City Village and Riverlilly selling out within a few months. The majority of buyers have been overseas investors, although we are seeing an increase in owner occupiers looking to downsize from the family home and first home buyers.

NORTHERN COASTAL (SOUTHPORT TO HOPE ISLAND)
This year the Northern Coastal area has performed very well to date. Sales agents continue to report a general lack of sales stock with improved buyer activity putting upward pressure on values. Notable changes have been a significant reduction of time to sell with many listed properties selling within just a few days. Some properties are selling sight unseen by interstate investors, something not seen since the 2007 boom period and we are also seeing multiple offers and properties selling prior to auction. The strongest performing property categories have been:

1. Vacant residential allotments;
2. $800,000 to $1,500,000 market range; and
3. Lightly improved sites with development potential.

In one Hope Island residential estate, 500 square metre allotments that were selling for circa $250,000 are now selling for circa $290,000. Vacant allotments have jumped circa $100,000 in some of the more in demand canal estates. The traditionally more popular suburbs, generally those close to the Broadwater and Canal Estates, have been the best performers with increases estimated to be as much as 15% to 20%. The $400,000 to $600,000 range for the more typical family