THE GOLD COAST MARKET AS AT JULY 2012
All that most people hear and read about the Gold Coast residential market is when something goes cactus or when a bdig sale takes place.
We have seen in recent weeks two high-value sales – most recently Dudley Quinlivan’s former Southport riverfront home, which sold for $9.5 million at auction and a few weeks prior to that, motor vehicle dealer John Zupp paid $12 million for a Sanctuary Cove home.
These two sales – the media are in a rush to tell us – are the highest paid prices for a Gold Coast residence in the last three years. Well whoopee!
I was contacted in both cases by local media outlets to make comment. I was happy to do so, but only if we discussed the Gold Coast market in more general terms and especially regarding its fundamentals. The media’s interest sunk like a stone when I wasn’t prepared to preach doom and gloom or get into “well below replacement cost” chatter or embellish on the rumoured defects regarding the Quinlivan property and the potential repair bills.
So, I will use this space to highlight what I would have touched on. It is something that very few understand about the Gold Coast, and to be honest, very few in the property industry these days appear to really have an understanding about the markets they are writing about.
…..
The Gold Coast housing cycle is very pronounced and history shows that this cycle, typically, has a six-year frequency. Also, our analysis, going back to the 1960s, shows that the peaks are usually 250% higher (in sales/construction volumes) than the previous five-year averages, and the downturns are 50% lower.
Since I have been working in the industry, the Gold Coast experienced market peaks in 1988, 1992, 2002 and 2008. Downturns were experienced in 1982, 1990, 1995, 2000 and 2012.
After close to 30 years in this business, you see certain patterns emerge. History usually repeats. The Gold Coast looks set to have a market peak in 2014-2015, followed by peaks in 2020 and 2026. Downturns will also return and most likely in 2017-2018 and in 2023. This isn’t gospel but history is on my side.
Just as we wrote about Brisbane turning the corner a month or so back, the Gold Coast seems to be following suite. It isn’t there yet, but it looks to be heading down the right path. Some tell-tale signs include:
Well-priced properties starting to sell soon after listing
Multiple offers starting to happen, again on well-priced properties
Some properties are now selling above reserve
Vacancy rates are on the decline and rents are rising
Fewer well-priced properties for sale – there is an actual shortage of saleable stock for sale across many parts of the Gold Coast
Time on the market, as a result, is starting to drop and in some cases dramatically
Intra-state and interstate interest is on the increase
My general reading is that people (me too!) are tired of having their life on hold and they want to get on and do things. This especially applies on the Gold Coast, which has been in limbo for much longer than the rest of the country. The recent state and local government changes help make this possible.
For mine, the Gold Coast has just about bottomed. End values are likely to start growing during 2012/13 and most likely between 5% and 10%. But here they might sit and for some time, because, as I will explain next week, the Goldie needs to supply more affordable housing stock.
The potential bump in Gold Coast prices over the next 12 to 18 months is re-correcting an overly bearish market.
Share
Best regards,
Linda and Carlos Debello
http://www.ljgrealestate.com.au
http://twitter.com/GillandDebello
http://au.linkedin.com/in/lindajanedebello
http://gillandrealestate.wordpress.com/
http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253
Confidential email:- The information in this message is intended for the recipient name on this email. If you are not the recipient please do not read, copy distribute or act upon the message as the information it contains may be privileged. If you have received this message in error, please notify the writer by return email. Thank you very much for your assistance in this matter and your co-operation.
No comments:
Post a Comment