Gold Coast gets a gentrification lift: HTW
Gentrification can be an academic discussion but identifying when it takes hold, and quantifying its impact on property is often best left to professionals that spend their days in the suburbs being felt, say Herron Todd White in their March 2016 update.
The term was coined in 1964 by British sociologist Ruth Glass when referring to the changes she observed in the social structure and housing markets in certain areas of inner London.
HTW took a detailed view of gentrification hotspots.
Certainly staying ahead of the gentrification curve can prove profitable to investors, say HTW.
The Gold Coast
The Gold Coast is a rising market, according to latest HTW residential property clock.
The residential area loosely bounded by Queen Street to the north, Bauer Street to the east and Chester Terrace to the west is in the southern fringe of the Southport CBD and has always been well regarded by the local market.
Its benefits are proximity to the commercial CBD, medical precinct and Broadwater Parklands with a good public bus service. It features wide streets with a mix of older character style dwellings and slightly dated semi-modern medium density low rise and townhouse style unit developments. However, the area has become dated with a loss of its former appeal and identity.
The area has now been rezoned as Special Purpose by the Gold Coast City Council which allows more relaxed density and height building restrictions;
The precinct has recently added two light rail train stops within close walking distance providing easy commuter connection through to Surfers Paradise and Broadbeach to the south and through the CBD and onto the new Gold Coast University Hospital and Griffith University in Parkwood to the north. (Approvals have now been granted for Stage 2 to continue the line through to Helensvale and make connection with the Brisbane City/ Airport Rail system);
Southport CBD itself is undergoing continuing upgrades including the introduction of its own China Town precinct, road upgrades and announced renovation of Australia Fair, one of the Gold Coast’s largest retail shopping centres. Southport has also secured the upgrade and expansion of a new aquatic centre in preparation for the 2018 Commonwealth Games and the surrounding Broadwater Parkland has and is undergoing continued upgrade;
In general, land values are pushing up as the Gold Coast expands mainly to the west and through the northern corridor making centrally located areas closer to the Broadwater such as Southport more desirable.
There has been keen development and investment in this residential precinct reflected in both single detached dwellings and low to medium rise investment. Some examples are:
• The Rise Southport, a seven level 30 x 2-bedroom unit complex situated at 43 Lenneberg Street on a 1,016 square metre site which was completed in 2015. Units were reportedly sold by the developer very quickly in the range of $370,000 to $420,000.
• 18 Lenneberg Street, a circa 1900, renovated two level, 3-bedroom, 4-bathroom detached character dwelling (living area of 344 square metres and land area of 701 square metres) recently went to contract for $1.1 million. This is a signifcant sale as when the property sold in May 2014 for $850,000 it was reportedly in a slightly inferior condition.
Another highrise tower complex with 55 levels to be known as Brighton on Broadwater – Sundale is due to be completed by October 2016. Currently the developer is marketing the non-serviced units between circa $425,000 and $950,000 (subject to confirmation).
Entry-level investment can still be achieved in the subject precinct with say a typical 1970s basic two-bedroom, one-bathroom unit in the range of $270,000 to $300,000. A 3-bedroom brick and tile townhouse might cost an investor in the range of $390,000 to $440,000.
In the short to medium term HTW says that this area will continue to go from strength to strength. The area will continue to modernise with higher density developments replacing some of the older less desirable buildings blended with renovated and prestige character dwellings.
ISLE OF LU Simon, SURFERS PARADISE
This central popular residential area was originally developed in the 1970s and until recently was serviced by an older style shopping centre. This centre has recently been rebuilt, has a new tenant mix and has been well received by locals.
This locale has seen good growth in value levels lately which can in part be attributed to the improved retail facilities and also to its proximity to the New tram line.
35 Salerno Street recently sold at auction for $675,000. This is a deceased estate sale of a circa 1980s single level brick dwelling providing basic 2-bedroom, 1-bathroom accommodation (living area of 112 square metres). The sale represents entry level for a non-waterfront block here. The majority of value was in the land with the improvements having minor added value.
114 Amal Drive went to contract in February 2016 for $1.55 million. This is a 4-bedroom, 3-bathroom, 4-car garage dwelling in a mostly renovated condition with rear river frontage.
Unit 43 Raffles on LU Simon sold last year for $425,000. This is a modern style two-level townhouse unit within a security-gated complex providing 3-bedroom, 2 -bathroom accommodation and tandem carport. It last sold November 2013 for $365,000.
With the population of the Gold Coast continuing to rise and demand for centrally located property in close proximity to facilities and the beach strengthening, this suburb can be expected to increase in popularity and value over the next five years.
Palm Beach on the southern Gold Coast is situated to the east of the Pacific Motorway, south of Burleigh Heads and Tallebudgera Creek and North of Currumbin, Tugun and Currumbin Creek. The eastern boundary of the suburb is approximately four kilometres of beach front with a number of homes, high-rise unit complexes and parklands having direct beach frontage. There are also a number of canals and lakes throughout the area. While this all sounds very appealing, in past years the area has had a bad reputation for being a lower class locality compared to a number of nearby and neighbouring suburbs such as Currumbin, Burleigh Heads and Mermaid Beach.
However, in recent years the area has been regenerated into a trendy, locals style beachside suburb with a vibrant cafe and restaurant culture and pristine beaches being two of the driving forces in the change for the area. On the back of this, there has been strong market demand for properties in the area.
One of the main positive points in the marketplace was its affordability in relation to the neighbouring suburbs previously mentioned.
However, on the back of this new wave of popularity and demand, prices have strengthened to a point where most of the Palm Beach residential market is now at historical peak values, some property types being circa 20% above pre-GFC prices.
For example, 35 Coolibah Drive, Palm Beach sold for $485,000 in October 2007 when the Gold Coast market was last booming. The dwelling has since had minor upgrade renovations completed (estimated cost of approximately $50,000), and recently sold in September 2015 for $620,000.
In a shorter space of time, 31 Twenty Fifth Avenue, which is an older asbestos beach shack on a 405 square metre allotment, sold in January 2014 for $480,000 and sold in inferior condition in 2015 for $530,000. The vast majority of the value is the land component with very minor added value for the improvements.
Over the past 24 months, a large number of older style homes have undergone major renovations in order to modernise. In other cases, older style dwellings have been demolished to make way for modern housing and duplex units which are in very strong demand and attracting premium sale prices. There is also a select number of new beach front low rise and medium rise developments of good to prestige quality under construction or having been recently completed with amalgamation of beach front and highway front sites becoming popular, where viable.
Entry-level housing towards the western side of Palm Beach is now in the vicinity of $500,000 and beach shacks in The Avenues closer to the beach are seeing prices in the high $500,000s to early $600,000s.
The upper end of the housing market comprises canal front properties and can vary from the mid to high $1 million mark to beach front homes from $2.5 million plus. 38 Mallawa Drive sold for $1.667 million at auction in September 2015 and was then used as a Boystown Prize Home Auction. At the time, the sale price was considered very strong but the market has continued to improve since.
While the market is booming in Palm Beach at present, there is a good chance that market conditions will fluctuate over the next five to ten years. However, with the likely extension of the light rail network (from Broadbeach through to Coolangatta Airport) and continued redevelopment of properties in the area, the demographic of the area may improve and continue to be one of the stronger markets on the Gold Coast.