On the Gold Coast in July 2022, a new financial year to come and reflecting on the last 12 months and what it has meant for the Gold Coast Property Market.
There is no denying it that we have had some incredible gains from Suburb to Suburb. There is data to support the Gold Coast market has had a beneficial boom due to buyer urgency amid coronavirus lockdowns and state restrictions. As life is now slowly getting back to a more normal flow and with a lot of people recently purchased in a market with low interest rates and in some cases with minimal deposits- what are we currently looking at for the future of acquired real estate and how is it going to effect buyers and investors in the luxury property market?
Lets use Burleigh Heads as an example. In the previous 12 months just been the median house value came in at 1.3 million, whilst the same median in July 2022 now sits at a market value of 1.65 million.
What is really important to look at when it comes to this data is the question of ‘What is driving the values on the Gold Coast?’ It really goes on the back of a simple equation of a growing population with a shortage of good property stock and as we all know this has hugely effected everyday people in the rental market. When we compare last year in July 2021, the average rental rate in Burleigh was $680 per week- fast forward to today and the same home is now $810. This is great news for investors that purchased prior to December 2019 as they are getting decent rental yields- however for those that recently invested in Burleigh the rental yields are slightly down due the increased property prices. The data is now showing that 12 months ago the average rental yield was 3.86% whilst last month they came in at 3.24% return.
What is important to note is that your loan to value ratio in any current mortgage is pivotal to maintaining a low risk investment. Factoring in how much wiggle room you have is important with calculating the increased interest rates and what your current rental return looks like. Clients that sign into bank loans exceeding the typical bank deposit of 20% typically generate more investment security compared to those that attained an asset where they could have the potential of being over leveraged in an uncertain climate.
Whilst we don’t have a magic ball in front of us and none of us know what the future holds in the property market, we can only go by 1 thing only and that is compatible data. As the world is dealing with a European war and American financial collapse, our side if the world has never looked so attractive to invest in. As our market gently corrects and creates a transactional timeline for properties that is of slower growth and slightly more predictable, we can outline that this a perfect time for buyers to see the true values for properties, particularly in the luxury property sector.
Selling luxury homes on the Gold Coast now has a longer listing period compared to what was. Homes are taking on average one month to sell with buyers being able to shop around with less competition. What is pivotal for venders more than ever is how the sales agent nurtures the buyer relationship and management of both parties requirements. On the flip side, if you are looking to sell your home in this market, the expected values are still strong and for owners that purchased prior to December 2019 there are still strong and viable capital gains to be had through putting your property to market with an entrusted real estate agency. Buying back into the same market is still positive and particularly profitable when it comes to buyers that look to ‘add value’ to homes that haven’t been maintained or bought up to spec when taken to market.
The luxury property market is generally not effected when it comes to external affairs of politics. This is where we see financial stability with owners and more commonly a change of personal circumstance prompting a potential sell and or buy situation compared to that of financial necessity. Buying into the beach front stock on the Gold Coast is still a transactional market with many homes having been kept vacant due to the lack of international visitors. With the Australian borders now open, we will see more of these luxury holiday homes in occupancy, however for some beachfront owners they have moved on and purchased property closer to where they reside for more practical use-ability.