Kochie sets his sights on estate agents and journalists in Queensland property 'catastrophe' stoush

Financial adviser and breakfast TV presenter David Koch stands firmly behind his assessment that the Sunshine and Gold coasts are “catastrophes” and says investors should not trust the views of local estate agents and journalists.

Koch has hit back after local newspapers and estate agents told him to do his homework before making such remarks about these markets.

Both the Sunshine Coast mayor and the head of the local real estate institute say Koch is wrong about their market, pointing to a recent turnaround in building approvals and reeling off a string of famous residents as evidence.

Writing on his blog, Kochie.com.au, he acknowledges that he and his wife Libby have “upset Gold Coast and Sunshine Coast real estate agents” but says they has done the necessary research and the numbers stack up.

“The local real estate agents took to the Sunshine Coast Daily and Gold Coast Bulletin to ‘correct us’ with some stern comments about our view… They told me I should do a little more homework before making statements like this,” Koch says.

“Well let me assure you I had already done my homework and have the necessary fodder to back up my statements,” he says

He says the following market facts support his view:

“Gold Coast house prices are down 15.1% from their peak in March 2010, falling from $568,000 to $482m500.

“Home units also peaked in March 2010 at $400,000, and have since fallen 15% to $340,000 in the December 2011 quarter

“On the Sunshine Coast house prices are down 13.9 % from their peak in December 2009 falling from $505,000 to $435,000

“Home units peaked in June 2010 at $367,500 and have dropped 16% to $309,000 at December 2011.

“SQM Research (an independent property research firm) is predicting another 7% to 9% across-the-board fall in value in the region in 2012.

Kochie also points out: “In any survey of trustworthiness real estate agents and journalists always appear at the bottom of the list.

“So dear reader you haven’t got much to choose from. But please note that I have no reason whatsoever to be making inaccurate statements. I have no issue with this area, but it’s my job to tell it how it is. And the bottom line is that property investments in these two locations are historically volatile, and right now in pretty bad shape,” he says.

“There are still massive amounts of stock on the market and it’s not going down.”

While he acknowledges that that building approval figures “rattled off” by Coast newspapers are “well and good”, he says the region “is already suffering a major oversupply, and having building approvals is no proof of a healthy market. It just means more supply in a low-demand area. Places are being built, but they’re not being bought.”

“Property is always about demand and supply. If there’s a lot of supply and weak demand then pressure is on prices to fall to attract buyer interest.”

He also includes a chart from SQM Research which shows Gold Coast listings are just as high as back in 2008, “though there has been a slight down trend in recent months.

Click to enlarge

As far as the Sunshine Coast market is concerned, Kochie says stock levels are “still clearly rising”.

Click to enlarge

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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