Southern holidaymakers can dream and ogle on the Gold Coast, but wait and research thoroughly before buying

Hopefully southern holidaymakers don’t rush into buying so-called Gold Coast high-rise property bargains during their current vacations.

At least not before reading the latest report from valuers Herron Todd White.

“This is a very depressed market at present, particularly for new and near new stock,” was the stark conclusion on the Surfers Paradise, Southport and Broadbeach markets.

It notes the Gold Coast historically ranked as one of the most volatile property markets in Australia.

“The extremes between peaks and troughs are far more pronounced and keenly felt than in many other markets around the country.

“When times are good, on the Gold Coast they’re great, but when times are tough, on the Gold Coast they are grim.”

It all makes knowing when and where to strike all the more important.

HTW suggests the Gold Coast market is very hard to predict most of the time, however past experience with “boom and bust” suburbs and cycles gives savvy investors an insight.

The April report spells out that a new, major project can take up to five years to complete from concept to completion.

“The prudent buyer should know that buying off the plan in the midst of a property boom (which is often when most major construction projects are proposed and funded) may have adverse consequences four or five years later at settlement if the market has taken a turn for the worse, as it has at present,” HTW explains.

“Being able to spot trends and changes in the market direction on the Gold Coast is as much as a black art as it is a science.

“There are many factors which influence the property cycle between the Tweed and Logan rivers.”

It notes some factors impact small sectors of the market while others have a much broader impact.

As HTW notes market cycles are an ever-present talking point of those interested in the market; from amateur investors and would-be first-home buyers to professional valuers, developers and real estate agents, to sophisticated investors with multiple property portfolios.

“Everyone would like to get the jump on their competition when the market is on the up and equally be the first to rein in their spending when the market goes into decline.”

Notwithstanding the further into the future you have to look, the more uncertain you will become, HTW proffers that the lesson for buyers is to consider future scenarios, good and bad, for a project at settlement and to not buy only in “the here and now”.

The valuation firm’s discussions with other valuers and real estate agents have given indications that there are an increasing number of transactions as “vendors begin to accept that it is currently a buyers’ market”.

But it notes there are still a large number of property owners who are of the belief that their property has increased in value over the last three to five years.

“While this may be the case in other states, i.e. Melbourne and Sydney, there is a clear weight of evidence indicating that in the vast majority of instances, this is not the case on the Gold Coast,” the valuers note.

The report notes the most consistent market segments are the price points of $160,000 to $200,000 for one-bedroom units usually located in Southport, Surfers Paradise and Chevron Island, close to shops and amenities.

In closing, HTW suggests the “Gold Coast market appears to be bumping along the bottom and looks likely to continue to do so for a few years”.

Not quite the same sentiment from the local newspaper headlines, which recently suggested “the Gold Coast property market is coming back on the boil as investors give Melbourne, Sydney and Perth the cold shoulder”.

Even the local property commentator Andrew Winter was giving out advice over Easter to the locals on the possibility of luring out of state buyers.

“And remember, as the Gold Coast is traditionally a holiday destination and there are plenty of tourists about wishing their Easter holidays could turn into a complete lifestyle change, now is actually a pretty good time to sell as people seriously think about turning their dreams into reality,” Winter suggested.

The Ray White group has proffered that buyers who may be nervous after recent events should remember that buying property in a subdued environment is like buying bikinis in winter – less competition, less stress and more room to negotiate a good deal.

But my advice is by all means dream, ogle at the offerings the real estate window displays, and pop into the glamorous off-the-plan display suites, but buy next time, and only after much research.

After all, it’s likely to be long cold winter.