Gold Coast property prices have surged since the start of the pandemic, following a decade of steady growth.
Property market pressure in the region is now some of the highest in the country, according to a new Market Pressure Review Report.
The data, released by InvestorKit, showed Broadbeach – Burleigh experienced the most significant growth, with property prices increasing 38.2 per cent from August 2020 to August 2021.
The findings come as no surprise to Burleigh-based sales principal Kylie McGufficke.
“Burleigh and surrounds have been undervalued for some time,” Ms McGufficke said.
“Covid has impacted the way that businesses operate, and people no longer need to travel to cities to work, so they can live where they dreamt of retiring and still have a great work/life balance.”
Also driving growth is lifestyle and investment returns, she said.
“Strong capital growth and rental returns. Locals are realising their beloved backyard is the area that everyone wants to buy into and so do they.”
Ms McGufficke, who runs Real Estate by KYLIE, said she had personally observed increased rental prices and fast capital growth in the area.
“Buyers that purchased only 12 months ago are able to achieve a growth they would normally only see over a seven to 10-year period.”
The southern Gold Coast region of Coolangatta experienced the second highest growth rate, at 21 per cent, followed by Surfers Paradise at 18.9 per cent.
Analysing the 10-year trend between 2012 and 2021, the report found houses performed significantly better than units.
Median house prices in Broadbeach-Burleigh and Coolangatta grew 131 per cent and 102 per cent respectively over the decade, while unit prices in the same areas grew at the more conservative rates of 53 per cent and 86 per cent.
Over the past 12 months, the Gold Coast has experienced a demand-led property boom, with monthly sales volumes growing 39.9 per cent, while the total monthly listings have fallen 7.3 per cent. Vacancy rates are at a crisis level with most of the regions at lower than 1 per cent.
With the highest rates of capital growth occurring in regions with high market pressure, property expert forecast the Gold Coast region will continue to boom over the next six to 12 months.
Arjun Paliwal, Head of Research and founder of InvestorKit, said the significant stock shortage in the Gold Coast was pushing house prices up, as buyers from Sydney and Melbourne considered a seachange and shift in lifestyle during the pandemic, while and others brought forward retirement plans.
“While house prices in Surfers Paradise and Broadbeach – Burleigh surpassed the $1 million mark a few years ago, with Coolangatta fast approaching, many other regions in the Gold Coast remain quite affordable,” Mr Paliwal said.
“In saying that, the market pressure in the region will see house prices continue to rise over the next 12 months, but the pace of growth may slow as sales volumes decline slightly in some areas and listings increase.
“Similarly, data on rental prices indicates similar intense market pressure as the sales market, and investors will notice a decline in rental yields as house values increase.
“For those with properties across the most popular beachside regions of Broadbeach – Burleigh, Surfers Paradise and Coolangatta, expect medium-level yields of three per cent, while those in growing markets such as Robina, Nerang and Southport can demand yields above four per cent.
“Considering the increasing rents, low interest rates, and affordability of these regions in comparison to major city coastal markets, the yields are well-placed in the current environment.”
Insights from the Market Pressure Review Report
Broadbeach – Burleigh
House prices in Broadbeach – Burleigh experienced the highest annual growth in the Gold Coast in the 12 months to August 2021, at 38.2 per cent, while units grew by 15.7 per cent. With the property market remaining hot, the average days on market for sales has declined 39.4 per cent for houses and 25.4 per cent for units. The pressure within the rental market has led to a strong rise in median rents over the past year, up 15.6 per cent for houses, and 13.3 per cent for units annually.
Coolangatta
Median house prices in Coolangatta rose 21 per cent over the 12 months to August, while units have grown by 16.9 per cent. The pressure within the rental market has led to a strong rise in median rents, too, up 10.4 per cent for houses, and 10 per cent for units annually. Investors can expect a medium-level rental yield of more than 3.5 per cent for both houses and units in Coolangatta, which are relatively well placed in the current low-rate environment.
Gold Coast – North
Median house prices in Gold Coast – North increased 11.2 per cent while units grew just 5.6 per cent in the 12 months to August 2021. The average number of monthly listings for lease has been declining over the past 15 months, down 21.1 per cent and 11.3 per cent, respectively, for houses and units over the past year – indicating a high-pressure rental market. The vacancy rate is now sitting well below 1 per cent.
Ormeau – Oxenford
Median house prices in Ormeau – Oxenford experienced one of the lowest increases in the region, at 13.7 per cent, but capital growth still remains strong, overall. Meanwhile, unit prices increased by just 4.3 per cent. Increased rental demand in the area has led to a rise in median rents over the last year, up 6.5 per cent for houses and 7.5 per cent for units.
Surfers Paradise
Median house prices in Surfers Paradise experienced some of the highest growth rates in the Gold Coast, with houses increasing 18.9 per cent and units rising 13.5 per cent. The monthly sales volumes for houses has increased 52 per cent and 72.7 per cent for units. The combination of rising prices, declining inventory, and drop in vendor discounting indicates Surfers Paradise is a high-pressure sales.
The full report can be found here.
