This Week in Real Estate -29 February 2024
Where Gold Coast Values Doubled
House prices in Surfers Paradise have doubled in just five years. Domain data shows that since 2018, Surfers Paradise achieved the biggest increase in median house price in Australia with its median up by 107.9% to reach $2.65 million.
The continuing high demand for Gold Coast properties is evidenced by strong auction results. Last week Surfers Paradise had the Gold Coast’s hottest auction market with 11 properties selling for a total of $17.7 million under the hammer.
Just a few weeks ago the strong demand for Gold Coast property was on display at the annual Ray White auction event which achieved a clearance rate of around 80% compared to 60% for the same event the previous year.
Ray White Surfers Paradise chief executive, Andrew Bell, says there is strong demand across all price brackets on the Gold Coast. However, three-quarters of the homes they sold at The Event were for more than $1 million.
According to the latest Herron Todd White Month-in-Review prices on the Gold Coast are still at the start of the recovery.
New Gold Coast Development
Development sales remain strong on the Gold Coast with Bastion Property Group securing yet another site for a new residential project.
The group, which launched Nera on Chevron Island, a few weeks ago has bought two sites at Vista Street and Surfers Paradise Boulevard which it will amalgamate for a new project.
It intends to have ten projects in the market within the next ten years. The new site is near the Gold Coast Light Rail station. Bastion’s $140 million Nera project has already chalked up $18 million in sales, primarily to Gold Coast residents.
It is approved but the developer is awaiting the response to some minor revisions before it starts construction. It hopes to start work in mid-2024 with completion in 2026. It has not revealed plans yet for what it will build on the new site.
House and Unit Gap Widens
The price gap between houses and units has widened even further with analysis by CoreLogic showing the difference is 45% higher than it was at the start of the pandemic.
Research director Tim Lawless says rising land values and a scarcity of houses listed for sale, means prices are being driven up by demand in the house market.
As a result, he predicts demand for units will continue to rise in the coming years.
“The house premium rose sharply through the pandemic upswing as more people sought out space and were more willing and able to live further afield in our cities,” he says.
“While we saw the premium contract through the early part of the rate hiking cycle as house values fell more than unit values, across the combined capitals the gap between house and unit values has since rebounded to a new record high as house values once again rise at a faster pace than units.”
The biggest gap was in Sydney (68.4%), Canberra (65%), Adelaide (58.1%), Brisbane (56.3%), Darwin (55.4%), Melbourne (55%), Perth, (49.1%) and Hobart (29.3%).
Building Incentives Needed
The Property Council of Australia (PCA) is calling for the Federal government to double the $3.5 billion incentives it has already offered for states and territories to exceed their housing targets.
In its budget submission, PCA says the extent of the housing crisis requires scaled-up incentives and it wants a doubling of the performance-based New Home Bonus and the $500 million Housing Support Program.
Property Council of Australia Chief Executive, Mike Zorbas, Australia can’t afford for any of the states to miss the housing targets.
“We need to supply more quality homes around job, educational and social opportunities and as close to public transport as we can get,” he says.
“With younger people utilising bespoke student housing to meet their unique needs, and older Australians moving into communities that are proven to keep them healthier and happier for longer and save taxpayers $1 billion a year by delaying their entry into aged care, then we open up the middle market for more Australian families,” he says.
Price Growth Stars
Forget what you’ve heard about price growth softening, new analysis by PropTrack shows many locations are still recording high levels of price increases.
It has found 87 suburbs throughout Australia where price growth outperformed neighbouring suburbs in the past 12 months.
In most cities, there were locations where prices increased by more than 20% with the largest increases in Perth, Adelaide and southeast Queensland.
PropTrack senior economist Eleanor Creagh says the majority of suburbs with the most significant growth were relatively affordable suburbs, which showed how much demand had increased for affordable properties.
In Greater Brisbane, Woodridge (up 24.5%), Runcorn (up 23.4%) and Caboolture South (22.3%) were the best performers.
In Perth, Greenfields (29.5%), Kelmscott (28.6%) and Warnbro (27.7%) were top performers while in Adelaide, Elizabeth North (26.7%), Hackham West (21.8%) and Lobethal (19.6%) came out on top.
Greater Melbourne’s growth was among the lowest but is best performers were Notting Hills (8.5%), Waterways (7.9%) Doncaster East (6.9%).
QUOTE OF THE WEEK
Property Council of Australia Chief Executive, Mike Zorbas
“We need to supply more quality homes around job, educational and social opportunities and as close to public transport as we can get.”
