RiskWise Property Review revealed an analysis into the Gold Coast and the impact of the Commonwealth Games before and after the event.
Doron Peleg, RiskWise CEO, said that the Gold Coast area has a stable property market, offering affordability and access to beaches and coastal areas, an appealing point for buyers.
“It has beautiful beachside and waterside suburbs, an unrivalled lifestyle, good infrastructure, a large number of well-off residents and locals who describe the Gold Coast as ‘heaven for children’,” Mr Peleg said.
Before the Commonwealth Games
RiskWise stated that their research showed strong growth in the region due to rising demand for affordable housing, higher migration rates to coastal areas and a growing economy, also mentioning “a relatively buoyant labour market in Brisbane and the Gold Coast”.
“Looking back over the past six years, the Gold Coast has demonstrated consistent population growth ranging from 1.28 per cent to 2.25 per cent, and this means [that] higher numbers of intra-state home buyers, investors and renters are set to drive demand in these suburbs,” Mr Peleg said.
“With many affluent migrants moving to the Gold Coast in search of an improved lifestyle, demand for suburbs in prime localities is likely to grow.
“The ageing population across Queensland is set to drive this demand, as greater numbers of wealthy retirees move from urban centres in search of luxury properties in prominent coastal areas.”
According to Simon Pressley, managing director of Propertyology, the focus, however, should be on the jobs market.
“There are a range of factors that influence the demand side of the property price equation. Aside from affordability, the biggest influence is economic conditions, which is jobs and more jobs,” Mr Pressley said.
“Tracking trends of job volumes is a more reliable measurement of the direction that a localised economy is heading than looking at an isolated unemployment rate.”
According to Mr Pressley, the better time to invest was during the last four years, where high volumes of construction jobs were focused mainly on the Games.
“The Gold Coast’s economy has been easily Queensland’s best-performer economy over the last four years, and a portion of that is construction jobs related to infrastructure for the project,” the managing director told to Smart Property Investment.
“Gold Coast’s property market has performed better than any other location in Queensland over that same period of time. But it still hasn’t boomed.”
“Brisbane... has probably had round figures, four consecutive years of 3 per cent growth, [while the] Gold Coast has averaged 4 [per cent] to 4.5 per cent growth over that same period of time, and the primary reason it’s done a bit better than Brisbane is the construction jobs. Those projects are all finished.”
During the Commonwealth Games
According to the RiskWise research, agents are claiming that vendors are waiting for the end of the Games before they go ahead and sell their property.
“Agents report there is not much new stock coming on to the property market as vendors mark time before committing to sell. Many are waiting for the Games to finish before they make their move,” a statement from RiskWise said.
Potentially boosting the Gold Coast economy is Trade 2018 Games Time Trade and Investment Program, which will run alongside the length of the Games and opens the opportunity for international investment to public services and public transport situations.
However, the RiskWise research warned that the Gold Coast job market is kept afloat with a transient population and large numbers of temporary employees.
“This, along with the uncertainty prior to the Games, could impact the market, and particularly on units that are either located in areas that are less popular among families or small units that are not suitable for families,” the research stated.
At the height of the Games, Mr Pressley said that a positive sentiment will be generated during the Games, but the mood itself will not be sustainable.
“For any of those who have been on the planet long enough, we’ve enjoyed watching [the] Commonwealth Games, [the] Olympic Games, even those who aren’t really avid sport junkies, they still take an interest often in what’s going on, and it’s positive things,” Mr Pressley said.
“We’re talking about world records and we’re getting that footage on the TV of… Gold Coast beaches and all that sort of stuff. That will be good just for the general mood of local people, which does have a role to play in how they feel about buying a house or renovating or upgrading. So, that’s what I mean by a sugar fix, that’s not sustainable though.”
After the Commonwealth Games
Mr Peleg said that there would be some reduction in economic activity post-Games, while the majority of residents would not be affected, with at least $3.2 billion in developments funnelled back into the area, between the $1.2 billion Spirit Tower and the $1 billion Empire Estate in Yatala.
He also said that houses were a less risky investment than units, with the former seeing any additional supply easily addressed by high levels of demand and not impacting all too much on property prices, while the latter seeing smaller units unsuitable for families in particular as very risky, as RiskWise’s research has shown that smaller units target investors rather than owner-occupiers, and it is owner-occupiers that drive up demand and property prices.
In particular, Mr Peleg pointed out Broadbeach, Surfers Paradise, Hope Island and Southport as receiving high levels of units and diluting the success rate of these markets.
Meanwhile, Mr Pressley said that the impact of the Games will be temporary and will quickly pass.
“Generally, these events have a lag effect of a couple months after the event’s finished, and then we all move on with life and it’s a distant memory,” Mr Pressley said.
“When I say sugar fix and sentiments and moods, that is likely to happen with something like the Commonwealth Games. It’s real, it will affect our mood and behavior, but for a really short period of time.”