An Investors’ Guide for the Gold Coast Property Market
January 9, 2022
The Gold Coast has plenty to offer. Think of Surfers Paradise with the long breathtaking sandy beaches that stretch as far as the eye can see.
Plus, economic opportunities that have brought the city to the top of the charts for internal migration.
The city’s housing market also offers top-notch rental yields and rising housing market prices.
Bottom line: the thriving property market and business environment make the city a fantastic investment destination.
Today we’ll take a deep dive into property investment in the Gold Coast region to help you make a more informed decision.
The Upside of Investing in the Gold Coast Property Market
The Gold Coast housing sector is a potential win for investors. Here are some of the reasons why.
The Gold Coast's Vibrant Economy
According to Government statistics, the Gold Coast comes in at sixth position when comparing Australia’s largest cities. It has a growing population of close to 600,000 people.
These statistics also show that it’s one of the leading cities to experience internal migrations as more Australians relocate to the coastal destination.
The Gold Coast contributes about 10% to Queensland’s total GDP based on 2020 data.
The city also boasts a vibrant film industry and is a major hub for education with universities such as Griffith that attract international students.
The rising population growth and lifestyle has spurred the Government to increase investment in capital projects. Records show that the Queensland government has dipped into their purse to fund over $1 billion in investments.
Some of the projects currently underway include:
Upgrades on the Pacific motorway (M1). This project will rehabilitate and upgrade roads in several areas like Pimpama, Varsity Lakes and Yatala South.
Projects to improve the safety and upgrade standards of living on the Spit. For instance, upgrades to the Moondarewa Spit and the Southport Yacht Club superyacht berth.
The extension of the light rail, which stretches from Broadbeach to Burleigh.
All of this investment means that the city will benefit from the ripple effects of investment. Put simply, if you pump more money into the economy, it means more jobs, more spending, more savings, higher standards of living and higher property demand and prices.
High Rental Yields
The Gold Coast has impressive rental yields. According to data from SQM Research, houses have a rental yield of between 4.5% and 4.7%. Units and apartments show a yield of about 5.8%.
The rental yields are particularly impressive when you compare them to interest rates and the Consumer Price Index (CPI). The Reserve Bank of Australia statistics show that interest rates average about 3%, and the CPI (which measures the inflation rate) is estimated at 3.8%.
So, this means you’ll earn a significant return if you rent out your property.
Note: rental yields measure the actual income you’ll receive from property rentals after accounting for costs.
Favourable Property Prices
According to data aggregated by CoreLogic, the property values index on all dwellings in the Gold Coast area showed strong growth of 17.31 points to a total of 129.90 at the end of July 2021.
The median house price was about $749,000, a growth of over 15% from the previous year’s house prices.
These figures point to high returns on investment.
In simple terms, investors who purchased a Gold Coast property last year gained a 15% increase in housing equity in a period of one year.
Risks That Gold Coast Property Investors Should Know
It would be remiss to invest without full knowledge of the risk factors. So, let’s take a look at the downside risks of the Gold Coast property market.
The Gold Coast is heavily reliant on tourism to boost its economy. Records show that the tourism sector contributes close to 20% of the city’s economy. Thousands of the city’s key businesses are directly or indirectly involved in tourism.
This means the economy took a substantial hit due to the COVID-19 pandemic. Government projections, however, indicate that economic recovery is projected after support and intervention programs.
Cyclical Nature of Real Estate
Generally, the property market tends to follow a cyclical pattern. One year the market can shoot upwards, and in another, prices can tumble.
The Gold Coast property market is no exception. There‘s always the risk of losing some value in a bad market. However, if you carefully plan your investment strategy and get the right property at the right price, you can lower the risk significantly.
Side Note: If you decide to dip your toes into the Gold Coast’s housing or apartment market, why not explore some of the secret listings that are on offer.
These secret off-market listings give you a crack at getting access to some of the best properties first - before other buyers can go on a bidding spree.
How to Invest in the Gold Coast Property Market
Here are the steps to landing a lucrative investment.
Create an Investment Plan
The first step to securing your investment property on the Gold Coast is to sit down and map out your investment plan. Investing without goals can interfere with your success.
Ask yourself questions like:
Do I want to buy a house, unit or apartment?
Am I looking for a rental property, or do I plan to sell when the house price is favourable?
How long do I plan to pay back the loan, and how will it affect my financial situation?
Is there a possibility of converting the rental home into my family home?
The answers to these questions will help you decide on the type and location of the property you want.
When you settle on a possible property choice, arm yourself with information about the area. Knowing the local trends can help you avoid selecting underperforming properties.
For instance, if you’re well versed with local trends, you’ll know which types of properties appeal more to tenants.
Then, calculate how much you’ll potentially gain out of the investment minus the costs. The benchmarks will help you determine if your property investment is doing well.
The next step is to apply for the funds through a bank or financial institution to cover the house price.
Banks will typically ask for a deposit of 20% of the total price upfront. If you already own a home, you can put down the equity on your house in place of the deposit.
Remember to take into account add-on costs like stamp duty, legal fees or inspection fees when you calculate how much to apply for. Talk to an expert to help you with the funding aspects of your investment.
Hunt for a Property
Once everything is in order, it’s time to find a suitable Gold Coast investment property with high return potential.
Get in touch with a real estate agent who knows the area. Remember to aim to cap your costs as much as possible so you can maximise your returns. This is where secret listings and off-market property sales shine.
If you go off-market, there may be the opportunity for your agent to negotiate with the seller for a better price instead of competing with other buyers on price when the property is listed on-market.
Plus, you can select the right location that meets your investment criteria at a good pace.
Choose Listing Loop to help you find the best property.
Listing Loop’s off-market real estate site matches you to properties that meet your requirements. All you have to do is register, and you’ll get an alert when there’s a matching property.
Register on Listing Loop for free to find the best properties and enjoy the exciting Gold Coast real estate market returns.