Sunshine Coast trumps Gold Coast in 2012 but both still buyers' markets: HTW

Sunshine Coast trumps Gold Coast in 2012 but both still buyers' markets: HTW
Sunshine Coast trumps Gold Coast in 2012 but both still buyers' markets: HTW

Of the two key regional south-east Queensland property markets, the Sunshine Coast property market had a decidedly better year than the troubled Gold Coast market, according to Herron Todd White’s (HTW) year-in-review December report.

However, both remain distinctly buyers' markets, with opportunities for first-home buyers and investors (with a long-term view) to secure discounted purchases while the more expensive end of both markets remains under pressure.

Certainly there is much more upbeat tone to HTW's assessment of the Sunshine Coast than the Gold Coast.

“Well one thing is certain, 2012 has turned out to be much better than 2011. There seems to be an air of optimism around now with more and more people ‘doing things’,” is how HTW began its round-up of the Sunshine Coast market.

In comparison, HTW describes the Gold Coast as a “tough property market” with values having declined “across all property market subcategories with the prestige, unit and acreage markets hit the hardest”.

The Sunshine Coast property market was helped by the building of the $2.03 billion University Hospital at Kawana, with construction of the private hospital due for completion next year and with work now underway on the main hospital.

Another positive factor, according to HTW, was the changes in both the local and state governments earlier in the year, which helped improve confidence levels.

“The resultant effects are that we have seen a significant increase in activity.

“The main market where this has been felt has been the sub-$500,000 house market. Properties have been turning over more quickly, with some agents making noises about running out of stock.

“In this sector it doesn’t feel as if there is going to be a sudden spike in values, but certainly we expect that values will stabilise,” says HTW.

However, the Sunshine Coast resort investment unit market and prestige markets remain “quite tough”.

And while sales are being recorded and activity has improved, HTW says this is from sellers being prepared to meet the market, with buyers “smelling blood in the water and treating these properties harshly”.

 


 

In the case of the Gold Coast, HTW says mortgagee in possession (MIP) sales have “significantly impacted the property market, with properties selling in many cases at levels not seen since circa 2003 to 2004”.

As a result, the Gold Coast is still a strong buyer’s market, with most local and informed buyers being “very discerning and taking their time to buy wisely, for example, seeking out the most distressed auction sales”.

“This has caused values in some residential areas to fall more sharply than others as buyers shun areas with perceived issues overshadowed by the more desirable areas. Therefore, we have seen sales in some residential pockets fall very dramatically.”

HTW notes that parts of the Gold Coast like Nerang and Highland Park offer first-home buyers the opportunity to get into the market at below $300,000 as do older-style low rise units in the Surfers Paradise/Broadbeach locality and second-hand townhouse units in the Pacific Pines locality”.

Moving up the price ladder to the $500,000 to $1 million bracket, values have continued to fall, with HTW recording that multiple sales occurring in Isle of Capri in the mid-$600,000s – the “lowest prices we’ve seen for waterfront property in this locality for a few years”.

Apart from the construction of the light-railway impacting on values for nearby property owners, the bigger structural problems for Surfers Paradise and Broadbeach is an oversupply of high-rise units for sale with the marketing of the Hilton, Oracle and Soul products.

Head of property for The Oracle Berrick Wilson has a more optimistic view of the market forecasts the 2012-13 summer months will provide “an additional boost to an already rejuvenated luxury apartment market”.

Oracle managed 100 new sale settlements in the 12 months since its relaunch in December 2011.

“With only 10 apartments sold at The Oracle in the 12 months prior to December 2011, and more than 100 apartments sold since at an average price of approximately $900,000, it’s fair to say the market has bottomed and buyers are continuing to capitalise by snapping up luxury stock,” says Wilson.

HTW does have a brighter outlook for the Gold Coast reporting that many agents are clearing much of their dated stock, however values are not set to rise in the short term.

Gold Coast rents have remained strong despite values declining, but this could change, with “many property managers reporting increases in vacancy rates”.

HTW recommends investors look at the following areas on the Gold Coast: Southport, Labrador and Biggera Waters, Paradise Point, and Parkwood /Molendinar.

Looking ahead, the assessment is that the Gold Coast will remain a buyers’ market in 2013 with losses suffered by existing property owners representing “excellent longer term opportunity for those ‘early adopter’ investors who can position themselves against the storm”.

“We still need to be wary of the unknowns, being the macro and micro economic situations, the mining industry and rental markets. There is no indication of any immediate changes in property values and we are predicting stabilisation for 2013,” says HTW.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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