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Gold Coast Property Market
Current Climate & Outlook
Presented By:
Helen Swanson
Presented by Helen Swanson
QLD Research Director LMW January 2016
The Facts
Sales volumes (YoY Sep-15) New Supply
Houses 19.9% 2014/15 = 4,660 approved
Apartments 14.4% 2004/05 = 15,000 + approved
Median Price growth (YoY Sep-15) Vacancy
Houses 10.1% Record low vacancy @ 1.7%
Apartments 1.47% Growth in sub $350,000 market
+ Commonwealth Games, + Significant Infrastructure Projects + Strong Tourism Growth + Falling Unemployment
= Potential for future growth
Agenda
1. Market Drivers
Major infrastructure Projects
Economic indicators
2. Vacant Land
3. Resale Market
Detached housing
Apartments and Townhouses
4. Outlook
Market Drivers
Major Infrastructure Projects
$1bn Coomera Town Centre $2 billion Commonwealth Games Village
$700 million Pacific Fair Upgrade $6 million china town precinct
Major Infrastructure Projects
Stage 2 Light Rail Project $1b Pacific View, Worongary
$1b Jewel Project, Surfers Paradise Wanda Theme Park, Coomera
Major Infrastructure Projects
Integrated resort development
Main beach, Seaworld Drive
5ha site
Request for detailed proposal
ASF Consortium anticipated to submit a detailed masterplanproposal in first quarter 2016.
Economic Indicators - Unemployment
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Gold Coast Vs Qld Unemployment Rate (%)
Gold Coast QldSource: ABS Labour Force, 2015
Economic Indicators – Employment
Gold Coast Bulletin, 22nd January 2016
Annual growth in employment was 15,700 (6% growth) significantly above Australian average of 1%.
Growth predominantly full time jobs
Greatest growth in Professional sector, Accommodation and Food and Health Care.
Economic Indicators – Population Growth
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
2011 2016 2021 2026 2031 2036
Gold Coast Population Growth Forecasts
Medium Series
Current population more than 500,000,
Australia's sixth largest city – larger than two of the nation's capitals.
Just over 900,000 residents on the gold coast by 2036
Annual growth 2.3% 2011-2031Compared to 1.9% for QLD
Economic Indicators – Population Growth
1.50
2.00
2.50
3.00
2011 - 2016 2016 - 2021 2021 - 2026 2026 - 2031 2031 - 2036
Gold Coast Projected Population Growth Rate (%)
Gold Coast QLD
Source: ABS Population Projections, 2013
Economic Indicators – Population Growth
Economic Indicators – Tourism Key Highlights YE June 2015
• International visitors (overnight) 2015 = 8,681,000 + 1% but visitation up 6%
• Expenditure by international visitors increased by 13%
• China good growth ~ largest increase in visitors (up 13% or 25,000)
• Leading international markets include China, New Zealand, UK, South East Asia, Europe and North America.
• Domestic overnight visitors 2015 = 3,300,000 -5.9% but VFR (11%) and Business (27%) Up
• The Gold Coast tourism industry attracts more than $4 billion in total visitor expenditure.
Vacant Land Market
Gold Coast Vacant Urban Land Median Price and Number of Sales
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
190,000
200,000
210,000
220,000
230,000
240,000
250,000
2007 2008 2009 2010 2011 2012 2013 2014 2015
Gold Coast New Lot Sales Median Price and Number of Sales
2007-2015
Median Price Number of SalesSource: OESR, Residential dwelling monitor, 2015
Gold Coast Vacant Urban Land $/sq m
200
250
300
350
400
450
500
550
2007 2008 2009 2010 2011 2012 2013 2014 2015
Gold Coast Sale of New Lots ($/sq m)
June Qtr 2015
Source: OESR, Residential dwelling monitor, 2015
Gold Coast Vacant Urban Land Median Price Growth
Suburb Median Price 1 Year Change
5 Year Change
Gold Coast LGA $235,000 2.2% -1.9%
Hope Island $515,000 41.1% 56.1%
Willow Vale $215,900 5.3% -
Reedy Creek $335,000 4.7% -1.5%
Upper Coomera $239,000 4.1% 0.8%
Ormeau $228,000 3.6% -12.0%
Helensvale $512,000 2.4% -0.3%
Coomera $239,900 2.3% -3.0%
Pimpama $236,000 2.0% 4.2%
Source: REIQ Market Monitor, September 2015
Resale Market
Gold Coast Median Detached House Price and Number of Salesby Quarter
693
1,579
$-
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
0
1,000
2,000
no
. of
sale
s
number of sales MedianSource: Queensland Market Monitor , REIQ & LMW
Gold Coast house sales by price category
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15
no
. of
sale
s
$ 1 million + < $1 million < $500,000 < $350,000
Source: RP Data, Queensland Market Monitor & REIQ
Gold Coast house sales by price category% of total sales
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Mar-15 Sep-15
no
. of
sale
s
$ 1 million +
< $1 million
< $500,000
< $350,000Source: RP Data, Queensland Market Monitor & REIQ
Gold Coast Detached House Median Price GrowthTop Performers
Suburb Median Price YoY Change 5 Year Change
Gold Coast LGA $545,000 10.0% 4.9%
Coomera $497,500 30.3% -18.4%
Biggera Waters $660,000 18.9% 14.3%
Hollywell $618,500 16.7% 8.8%
Burleigh Waters $695,000 15.1% 17.1%
Mermaid Waters $846,000 13.6% 15.2%
Palm Beach $676,250 12.5% 12.7%
Source: REIQ Market Monitor, September 2015
Gold Coast Detached House Median Price GrowthTop Performers (>$585,000)
Suburb Median Price YoY Change 5 Year Change
Gold Coast LGA $545,000 10.0% 4.9%
Southport $506,500 11.4% 6.1%
Robina $585,000 11.4% 7.9%
Merrimac $468,000 11.2% 9.6%
Varsity Lakes $490,000 10.4% 7.6%
Molendinar $568,000 9.9% 9.5%
Parkwood $545,000 9.1% 7.1%
Pimpama $392,000 8.6% 5.9%
Source: REIQ Market Monitor, September 2015
0
10
20
30
40
50
60
70
2007 2008 2009 2010 2011 2012 2013 2014 2015
Prestige Dwelling Sales (houses and units)$3 million plus sales
$3m-$3.9m $4m-$4.9m $5m+
• Improvement to prestige residential market throughout 2015.
• Mortgagee sales are now minimal and bargain opportunities have become scarce.
• Record low interest and improved economic conditions stimulating demand.
• Major increase in interest from wealthy overseas and interstate investors (particularly Sydney & Melbourne based)
• Growth in intergenerational wealth another major driver of upgrading residential activity with both real estate wealth and general personal wealth contributing to the market
• Buyer fundamentals are returning with a strong emphasis firstly on location and secondly on improvements.
• Demand from interstate and particularly overseas investors has been the primary driver of new house and unit sales
• Caution always taken as market heavily influenced by economic conditions both local and overseas
Prestige Market
Gross Rental Yields
5.0%
5.1%
5.2%
5.3%
5.4%
5.5%
5.6%
5.7%
Houses Indicative Gross Rental YieldGold Coast Suburbs
Sep-15
Source: REIQ, 2015
Residential Vacancy Rates (%)
0
1
2
3
4
5
6
Gold Coast Residential Vacancy Rates (%)
Jun-08 to Sep-15
Gold Coast Inne Brisbane
Source: REIQ ,2015
Gold Coast Median Unit Price and Number of Salesby Quarter
$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
0
1,000
2,000
3,000
me
dia
n s
ale
val
ue
no
. of
sale
s
number of sales median sale value
Source: REIQ & LMW
Gold Coast Units Median Price GrowthTop Performers
Suburb Median Price YoY Change 5 Year Change
Gold Coast LGA $345,000 1.47% -8.6%
Broadbeach Waters $425,000 14.9% -6.6%
Miami $429,500 12.9% 5.1%
Currumbin Waters $330,000 12.9% -4.2%
Bundall $325,900 10.0% -7.1%
Nerang $278,500 9.6% -1.6%
Currumbin $438,750 9.7% 8.2%
Broadbeach Waters $425,000 9.5% 1.4%
Upper Coomera $325,000 8.9% -9.5%
Source: REIQ Market Monitor, September 2015
Gross Rental Yields
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
7.0%
7.5%
Units - Indicative Gross Rental YieldGold Coast Suburbs
Sep-15
Source: REIQ & LMW
Gold Coast Median Rents
0
75
150
225
300
375
450
ren
t ($
pe
r w
ee
k)
median 2 bedroom unit rents median 3 bedroom house rentsSource: REIQ & LMW
Source: REIQ Market Monitor, September 2015
Robina / Varsity Lakes Medium
Density Market
Current Situation
• The Robina/Varsity Lakes market remains an affordable precinct to buy a new apartment in comparison to coastal Gold Coast precincts with new apartments generally ranging from $350,000 to $550,000.
• Lower priced investment product remains the focus of activity, particularly for properties priced below $500,000.
• Investment driven demand is very prominent driven by strong rental market (potential investment return) and tax minimisation benefits.
• Chinese investors have been the dominant investor type of new apartments in Robina and Varsity Lakes.
• Demand has been strongest for two bedroom product.
• Marketing agents also report a reasonable level of demand from owner occupiers who need to downsize from the traditional family home and desire the security, convenience and low maintenance attributes of apartment living.
Summary & Outlook
Residential Land & Subdivisions
• Project builders very active, entering into more ‘Put & Call’ options than they have for some time.
• As sales volumes have increased, a corresponding reduction in inducements (ie. rebates) has resulted, with very few, if any estates offering such incentives.
• The number of ‘off the plan’ sales are increasing, as too are the stage sizes
• The improving market is still taking the form of an increase in activity and more stability in general, as opposed to any significant uplift in values (in relation to completed stock).
• This uplift is however beginning to occur, as list prices are exceeded for established dwellings and developers start to “push” prices for proposed new product.
• The prices being paid for development sites are also increasing, placing pressure on development margins and developers are prepared to accept lower returns in the face of a more certain market.
Residential Summary
• Significantly increased sales volumes with noticeable value growth in the sub $1 million price bracket
• Agents reporting of short sale periods and significant lack of stock to sell
• First home buyer numbers low with investors more prevalent (SMSF) as rental and capital value increases expected in a low interest rate environment
• Prestige market still tough, but appears to have stabilised
• Hot spots are generally central areas close to new infrastructure, beach, e.g. Southport (Labrador), Broadbeach, Mermaid/Miami, Burleigh
Investm
en
t p
rop
ert
y What time in 2016
Contact details
Independent Valuation,
Research & Property Advice
LandMark White Ltd
ABN 50 102 320 329
ACN 102 320 329
Ground Floor
26 Marine Parade
Southport QLD 4215
AUSTRALIA
Telephone 07 5634 7100
Facsimile 07 3226 0099
www.lmw.com.au
National Offices
Sydney 02 8823 6300
Melbourne 03 9614 6611
Brisbane 07 3226 0000
Parramatta 02 9354 0800
Wollongong 02 4228 0276
Gold Coast 07 5634 7100
Sunshine Coast 07 5443 7977
LMW Research can provide tailored
property research across all property
markets.
Visit our website at www.lmw.com.au for
information. Or email:
Disclaimer
No part of this research report or any reference to it may be included in any other document or reproduced or
published in any way without written approval of the form and context in which it is to appear.
No liability is accepted for any loss or damage (including consequential or economic loss) suffered as a
consequence of fluctuations in the property market subsequent to the date of survey. The opinion noted herein is
relevant as at the date of survey only and no warranty can be given as to the currency of the opinion at any point
following the date of the survey.
This research report is current at the date of 29th January 2016 only. The opinions noted herein may change
significantly and unexpectedly over a relatively short period including as a result of general market movements or
factors specific to the survey area and property classes. The opinions expressed in this research report are that
of the researcher and is authorised by LandMark White Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
