Gold Coast market regains its shine
The property market on Queensland's Gold Coast is bouncing back after a long period of stagnating growth, a major data analysis firm has predicted.
A new Boom and Bust report from SQM Reasearch has analysed the property market in the popular holiday spot. According to the report, the market had been in the doldrums for the past three years.
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“For those who have followed us for some time, you would be aware we have always been very cautious, if not outright bearish on the Gold Coast housing market,” SQM director Louis Christopher said.
“Indeed, in 2011 we stated that the south east Queensland market, including the Gold Coast, was a 'basket case'.”
At the time, Mr Christopher believed overvalued housing, an oversupply of dwellings and property spruikers threatened the strength of the market.
In addition, he said the local economy was “largely a one-trick pony town completely exposed to the fortunes of the domestic tourism market, and with that, sensitive to adverse movements on the Australian dollar”.
The market subsequently dropped throughout 2011 and 2013, hitting its lowest point in 2013.
Since then, however, indicators are showing signs of improvement, Mr Christopher said.
Statistics from RP Data show in mid-2013, houses in Surfers Paradise had seen 12-month growth of negative 18 per cent.
By February 2014, that growth rate had climbed to four per cent.
“Unemployment has been coming down due to some good tourism numbers and there is optimism for the medium-term future, particularly with regard to the 2018 Commonwealth Games,” he said.
However, he urged novice investors to be cautious when buying into the region.
“Now that is not to say there are still some longer-term problems that need to be resolved. There are,” he said.
“There are just too many dodgy operators in the local real estate industry there and the chance of overpaying for a bad asset are very high.”