Gold Coast’s Prestige Property Prices Grow Despite Pandemic
October 30 2020
The Gold Coast’s premium property market has performed strongly this year, even in the face of the coronavirus pandemic. We look at where the top end of our local market is at right now and what’s keeping property prices growing.
The Gold Coast property market has been experiencing more favourable conditions than property markets in many other parts of the country. In fact, while property values in Sydney and Melbourne have fallen -3.7% and -1.7% over the past three months according to CoreLogic, it’s not been the same here on the Gold Coast.
The real gains have happened in the prestige areas of the Gold Coast. For instance, realestate.com.au data shows the median value of houses in Mermaid Beach lifted from $1.45 million in January 2020 to $1.565 million by the end of September 2020. The median value of a house in Surfers Paradise rose from $1.8 million to $1,992,500 over the same period. Meanwhile, the median house price in Main Beach lifted from $1.675 million to $1.85 million in just the five months since April 2020.
Property Prices in other states
It’s worth noting that prestige property has been performing strongly in other parts of Australia too – often decoupling from other parts of the real estate market. One of the main reasons for this is that the prestige market can be less affected by economic downturns. That’s because sellers are often in a financial position where they can afford to hold off until the right offer comes in.
As we speak to buyers and sellers, we’ve observed six key trends driving the prestige market on the Gold Coast right now.
As Australia’s premier lifestyle destination, the Gold Coast has always attracted interstate buyers looking for a better life. Many of these buyers are heading towards the end of a successful career, the kids have left home and they’re looking for the best place to enjoy their retirement. Others, who aren’t quite ready to give up working anytime soon, are looking for a second home they can escape to.
Even with border closures, these mature interstate buyers represent one of the main demographics in today’s prestige market. Most are discerning and prefer to be close to, or even on, the water. After all, that’s exactly what they’ve moved to our part of the world for.
Technology such as virtual tours, FaceTime and live video walkthroughs has allowed us to engage with these buyers despite any travel restrictions.
The COVID-19 pandemic has forced many to change their work patterns and more people are working remotely, especially in fields such as professional services. As a result, they no longer need to be within a short commute to their workplace. Their jobs have become geographically independent.
The Gold Coast has been a real beneficiary of this trend and we’re fielding a lot of enquiries from people currently working in major cities, especially Sydney and Melbourne, who want to relocate here with their families to enjoy a different lifestyle.
Often these buyers are quite senior in their roles or run their own businesses, so they have a reasonable budget. However, they recognise that the Gold Coast offers far better value than comparable suburbs in the southern capital cities. For instance, the median price in Bondi is $2.875 million compared to $1.205 million in Broadbeach Waters.
At the same time, we’re seeing a lot of locals looking to take advantage of current conditions to upgrade.
Even though we’re in the midst of a coronavirus-induced recession, the economic fallout hasn’t hit everyone evenly. There is a large part of the market have been relatively unaffected to date.
For those with stable employment, today’s low interest rates make it cheaper than ever to take a step up the property ladder. These buyers can often afford to be bullish given the RBA has said it intends to keep interest rates at record lows for some time.
The Gold Coast generally doesn’t attract the same number of overseas buyers as the Sydney or Melbourne property markets. However, one group of overseas buyers we do see – and are now seeing in increasing numbers – is expat buyers.
These buyers are professionals usually based in a global financial centre such as New York, London, Singapore or Hong Kong and they’re looking for somewhere to live when they return home.
Given Queensland has escaped the worst of the pandemic, many are eyeing a return home sooner rather than later.
One group of buyers we’re not seeing in great numbers right now is property investors. That’s partly because the short-term rental market – which relies largely on tourists – has dried up. It’s also because many investors are taking a ‘wait and see’ approach, trying to figure out what will happen to rents and vacancy rates when JobKeeper and other government stimulus measures end.
For our purposes, the prestige market on the Gold Coast tends to be less reliant on investors than other market segments, so we don’t expect this to have a profound effect for our clients right now. Although we are seeing an increase in rental prices due to the lack of available rental properties in the market. It is not uncommon for us to receive 15 applications within days of a rental property coming to market, especially in the $1,000-$2,500 per week price range.
Real estate prices are ultimately set by the law of supply and demand and low stock levels are having a real impact on the supply side.
This is not necessarily COVID-specific but has been a feature of our property market for the past few years. SQM data reveals there were a total of 3,582 listings on the Gold Coast over September 2020 and 3,716 in September 2019. If you were to go back nine years to September 2011, there were 5,063 Gold Coast listings.
That means there are now almost 30% fewer properties listed for sale.
This lack of supply has been underpinning pricing and, if current market conditions prevail, could put upward pressure on home values.
The Gold Coast’s premium real estate market has held up well, even in the face of the current pandemic. We expect as the economy emerges from the recession and Australia begins to open up, prestige property here on the Gold Coast will become more desirable still.
If you’re interested in buying or selling in the Gold Coast’s prestige property market, contact our team today.