Gold Coast and Tweed Coast residential market has bottomed in first half of 2013: Herron Todd White
The property market on the Gold Coast and Tweed areas has bottomed in the first six months of this year, according to Herron Todd White.
This is being shown by a ‘’significant increase’’ in buyers in the marketplace than there were over the previous 12 months.
The valuer says agents are reporting significantly higher traffic through ‘open houses’ at all ends of the market, and there are now fewer mortgagee-in-possession and receiver sales than in 2012.
Agents are also reporting low stock levels, especially in the under $700,000 price bracket.
Herron Todd White says most demand is coming from owner occupiers.
"However, we are now also seeing investors moving back into the market.
"The top end, being the house market in the over $2.5 million price range and prestige unit market, remains tough with forced sales still contributing to downward pressure.
"The $1 million to $2 million price range, however, appears to have bottomed and levelled out and this is demonstrated by a recent canal-front property at Bundall which went to contract in early 2013 for $1.925 million. This contract failed to settle, however, when it was put back on the market it sold within one week at $1,950,000.’’
The valuer says waterfront housing in the $700,000 to low $1 million price range is also seeing increased sales activity. For example, at Benowa Waters the first six months of this year has seen 11 sales at $1 million plus, compared to only four sales during the same period in 2012.
At Runaway Islands there have been four to five sales at around $1.25 million compared to no sales at this price level last year.
"Over the past 12 months buyers in the middle to higher end residential market have generally been looking for modern dwellings which they can move into and not have to undertake any renovation works. This has generally been due to property values falling while construction costs have remained fairly firm.
"Therefore, buyers see better value in buying modern houses which can be purchased for below replacement cost, rather than buying land and then building. This has put downward pressure on land values and, during 2012, vacant land was difficult to sell and saw significant falls in value.’’
Herron Todd White says a promising sign during the first six months of this year has been renewed sales activity among vacant waterfront land. The valuer notes two sales in Sir Bruce Small Boulevard at Benowa Waters for around $800,000 when one of these allotments sold last year for around $600,000.
It says there have also been sales of lakefront allotments at Emerald Lakes for around $650,000 compared to last year when they were selling for around mid $500,000.
‘’The strength of the market over the past six months has generally been in the under $500,000 detached housing market where stock has been turning over quickly, with agents now reporting very low stock levels. In the under $400,000 price bracket the market in certain pockets has seen some firming in value levels of up to 5%
‘’Even with this firming at the bottom end, the market still presents good buying. For example, in the Pacific Pines, Upper Coomera areas modern, four-bedroom, two-bathroom, double garage houses on 600 to 800 square metres can still be bought for between $400,000 and $500,000 -- which is below replacement cost.
‘’The high-rise home unit market still remains tough with supply levels still outweighing demand, especially for units in the over $500,000 price bracket.’’
Rising Body Corporate fees are also another issue impacting on market values of home units, especially in older style high-rise buildings, the valuer says.
It points out that, although the construction of the light rail project is causing significant disruption between Broadbeach and Southport, there will be ‘’significant positive flow-on effects for real estate in the areas surrounding it.
‘’Overall, the past six months have seen a more positive vibe occurring in the Gold Coast property market.’’