Hopes that 2022 would see the Gold Coast’s housing market ease after two years of a pandemic-induced surge have been somewhat dashed, although there are signs price growth may soften.
Key points:
- House prices grew by between 50 to almost 60 per cent in some Gold Coast suburbs last quarter
- Vacancy rates remain one-third of what’s considered “healthy”
- The rental market is to remain “very, very tight” but there’s signs house price growth may ease
Data from Domain shows median price increases of almost 60 per cent across some suburbs last year, creating a “cascading effect” for neighbouring areas.
“When any one particular suburb will kick on a bit, it normally drags shoulder suburbs up as well,” Ray White Surfers Paradise chief executive Andrew Bell said.
“Interstate buyers are still really, really strong.”
Meanwhile, a report from the Real Estate Institute of Queensland (REIQ) indicated the rental market would remain remarkably tight with the return of international travel likely to create even more strain.
‘No surprise’
Mr Bell said the development of new apartments had driven median prices up in Mermaid Waters, while Palm Beach’s growth had “been no surprise at all”.
“That was really the first of the southern suburbs that got a kick on and since then we’ve seen markets like Burleigh — it’s going through phenomenal growth as well — and that’ll turn up probably in next year’s figures,” he said.
Mr Bell said this created an “affordability issue” for homebuyers despite low interest rates, but there were signs of some softening.
“What we’re seeing now is a little more stock coming on the market, so that’ll take a little heat out,” he said.
What about rentals?
REIQ chief executive Antonia Mercorella said the Gold Coast’s rental market will likely remain “very, very tight” throughout 2022, with a vacancy rates of just 0.6 per cent recorded in December.
“We classify a healthy market as somewhere between 2.6 per cent to 3.5 per cent,” she said.
“COVID has meant more flexible work arrangements have been put into place, therefore we’ve seen people who would normally reside in Brisbane perhaps have the ability and flexibility to move to the Gold Coast.”
Ms Mercorella said another trend had been people shifting from co-tenancies to sole tenancies.
But she said the return of international travel in 2022, especially among students and migrants, “could very well make things even tighter”.
“We could see a new group of people potentially wanting those rental properties,” she said.
“We may see some property owners choosing to take those properties and put them on to the shorter-term or holiday letting market instead.”
‘Don’t lose faith’
Mr Bell said the return of international travel would create new demand, especially out of New Zealand, but it would not be “a major source of new buyers for a while yet”.
“Most of the activity in the past five or so years was out of China, but that’s pretty much been shutdown,” he said.
“The conflict that’s been going on between our governments has made Australia unattractive for the Chinese.
“[But] people will be looking to parts of the world where they can have a bit of a safe haven and we’re starting to see some increased inquiry out of markets like America, the UK.”
For those looking to break into the market Mr Bell said “don’t lose faith”, with some buyers searching for 12 months before purchasing.
“For example, Southport has been really strong for some time. But you’ve got Ashmore on the border of that which hasn’t seen the same growth.”
