Gold Coast regions reap rewards for investors

The findings came from the new Market Pressure Review Report for the Gold Coast from InvestorKit, which looked at eight Statistical Areas Level 3 (SA3) regions.

These SA3 regions include Broadbeach – Burleigh, Coolangatta, Robina, Nerang, Surfers Paradise, Southport, Gold Coast – North, and Ormeau – Oxenford.

InvestorKit analysed key market pressure indicators to show how sales and rental prices, stock levels, and other variables changed between August 2020 and 2021 and also looked at the 10-year property market trend.

The Gold Coast has seen a demand-driven housing boom in the last 12 months, with monthly sales volumes up 39.9 per cent and total monthly listings down 7.3 per cent. Vacancy rates are at an all-time low, with most regions having rates of less than 1 per cent. 

Arjun Paliwal, the head of research and founder of InvestorKit, explained: “The significant stock shortage in the Gold Coast is pushing house prices up, as buyers from Sydney and Melbourne consider a sea change and shift in lifestyle during the pandemic and others bring forward their retirement plans.”

Mr Paliwal further pointed out that although Surfers Paradise and Broadbeach – Burleigh are early in the game, having reached the $1 million price mark a few years ago, not far behind are other areas like Coolangatta, which remain reasonably priced.

As it stands, Broadbeach – Burleigh has displayed the biggest median property price increase on the Gold Coast at 38.2 per cent.

The researcher predicted that “the market pressure in the region will see house prices continue to rise over the next 12 months, but the pace of growth may slow as sales volumes decline slightly in some areas and listings increase”.

Data from the research revealed that median home prices in the Gold Coast performed much better than units over a 10-year period from 2012 to 2021. Houses in Broadbeach-Burleigh had a growth rate of 53 per cent due to a volume increase of 131 per cent, and Coolangatta at 102 per cent or a growth rate of 86 per cent. These figures are a far cry from unit prices in the area.

As Mr Paliwal weighed in on the rental property market, he opined that data on rental prices shows that the rental market is under comparable significant market pressure as the sales market, and investors will observe a drop in rental yields as house values rise.

Given this scenario, InvestorKit’s research head has highlighted that “for those with properties across the most popular beachside regions of Broadbeach – Burleigh, Surfers Paradise and Coolangatta, expect medium-level yields of 3 per cent, while those in growing markets such as Robina, Nerang and Southport can demand yields above 4 per cent.”

Mr Paliwal explained that increasing rents, low-interest rates, and affordability of these regions in comparison to major city coastal markets, “the yields are well-placed in the current environment”.

Here’s a rundown of property market data in the eight SA3 regions in the Gold Coast area included in the report:

Broadbeach – Burleigh

Broadbeach – Burleigh had the steepest annual growth on the Gold Coast in the 12 months to August 2021, with a 38.2 per cent increase in house prices and a 15.7 per cent increase in unit prices. Average days on market for sales has decreased 39.4 per cent for houses and 25.4 per cent for units, indicating that the property market is still strong. The rental market’s pressure has resulted in a significant increase in median rents over the last year, up 15.6 per cent for houses and 13.3 per cent for units.

Coolangatta

Coolangatta’s median home prices increased by 21 per cent in the year to August, while unit prices increased by 16.9 per cent. The pressure on the rental market has also resulted in a significant increase in median rents, which are up 10.4 per cent for houses and 10 per cent for units year-on-year. For both houses and units in Coolangatta, which are relatively well-positioned in the current low-rate environment, investors can expect a medium-level rental yield of more than 3.5 per cent.

Gold Coast – North

In the 12 months leading up to August 2021, median home prices in Gold Coast – North increased by 11.2 per cent, while unit prices increased by only 5.6 per cent. Over the past year, the average number of monthly listings went down for houses at 21.1 per cent and 11.3 per cent for units. This has been falling for the previous 15 months, indicating a hot rental market. The vacancy rate has dropped to considerably below 1 per cent.

Nerang

Median home prices in Nerang climbed by 18.1 per cent, while unit prices had a lift of 13.1 per cent. The area’s rental market pressure has resulted in a continuous rise in median rents, with houses up 10 per cent and units up 4.7 per cent. It is predicted that house rentals with yields of more than 4 per cent are possible, while unit rental yields could reach above 5 per cent.

Ormeau – Oxenford

Having seen a 13.7 per cent increase in median property prices, Ormeau – Oxenford had one of the lowest value increases in the region. Although overall capital growth remains solid, the area’s unit prices only grew by 4.3 per cent. Increased rental demand in the area has resulted in a 6.5 per cent increase in median rents for houses and a 7.5 per cent increase in median rentals for units over the last year.

Robina

The median house price in Robina has increased by 13.4 per cent each year, while unit prices have increased by 6.5 per cent per year. Investors can expect a solid house rental return of more than 4 per cent and a high unit rental yield of more than 5 per cent as rental market pressure rises. According to InvestorKit’s data, yields are decreasing slightly as a result of the steep price increase, while rents are continuously increasing.

Southport

Southport’s median house prices have risen over the last year, with house prices increasing 14.1 per cent and unit prices increasing 8.9 per cent year-on-year. The rental market’s pressure has resulted in a consistent upward trend in median rents over the last year, with a 10.1 per cent increase for houses and 7.5 per cent for units year-on-year. Investors can look forward to rental yields of more than 4 per cent.

Surfers Paradise

Surfers Paradise’s median house prices have grown at some of the fastest rates on the Gold Coast, with houses jumping 18.9 per cent and units climbing 13.5 per cent. Monthly house sales have grown by 52 per cent, while unit sales are up by 72.7 per cent. Surfers Paradise is a high-pressure sales market, as seen by rising prices, falling inventory, and a decrease in vendor discounts.