In his column for Switzer, John McGrath says South East Queensland is becoming a popular choice for a change of lifestyle.
South East Queensland remains a very compelling market for an investment or lifestyle change for young families, now that Sydney has become difficult to afford following five years of exceptional growth.
Last week, we hosted the 20th annual Australasian Real Estate Conference (AREC17) on the Gold Coast, with a record attendance of 4,500 real estate professionals.
While I was there, I was reminded of how great the weather is and how much development is going on, particularly in terms of new infrastructure in the lead up to the 2018 Commonwealth Games.
The latest venue to open is the brand new Gold Coast Sports and Leisure Centre in Carrara.
Construction of the athletes’ village within the redeveloped Parklands site is on track for completion in October.
After the Games, the village will be transformed into a new residential precinct within the broader Gold Coast Health and Knowledge Precinct surrounding it.
All of these new sporting venues are in addition to other major new facilities recently completed, such as the Gold Coast University Hospital, expansion of the light rail and a continuation of cranes dominating the skyline, with construction of many large residential high-rise towers underway.
This is a city transforming on the fast track and it’s great news for local property values.
I’ve been recommending the Gold Coast to my investor clients for some time now.
This market really suffered during the GFC but its recovery has been fantastic.
Those that got in right at the bottom of the cycle have reaped a lot of rewards already, with more growth to come.
South East Queensland is a market that really excites me.
There’s great opportunity for investors and young families in Brisbane, the Sunshine Coast, Toowoomba and lots of other places in between that all offer great value.
Sydney and Melbourne are like New York and London, prices have reached a certain level and have simply become unaffordable for some buyers.
This has led to greater demand in South East Queensland from southern-based investors in recent years.
Average rental yields in Brisbane/Gold Coast are currently 4.1% for houses and 5.3% for apartments, according to CoreLogic.
This is well above average, with yields in Sydney at 2.8% for houses and 3.9% for apartments and Melbourne at 2.7% and 4.2% respectively.
But South East Queensland is not just great for investors.
Young families struggling with their mortgage in Sydney and Melbourne could completely transform their financial situation, not to mention their lifestyle, with a move north.
People can sell an ordinary $2 million house in Sydney and buy a luxurious lifestyle in Queensland.
High-quality properties on the Gold Coast are often a third or even a quarter of the price of Sydney, so the value for money is exceptional.
Our Sydney agents are selling one bedroom apartments for $800,000-$900,000, whereas on the Gold Coast, you can buy a house on a canal for similar money.
Sydney home owners have an opportunity right now to take the 75% growth that their properties have had and buy into a much cheaper but equally appealing market in South East Queensland, and in many cases, be mortgage-free!
But don’t wait too long to make the move.
While the Gold Coast market does provide great value in comparison to Sydney, prices are definitely on the move, particularly over the past 18 months.
Confidence has increased, locals are seeing that the worst of the GFC impact is over and prices have been firming and/or rising in many areas.
Developers (particularly Chinese) are investing millions and the Commonwealth Games is creating excitement, optimism and anticipation among locals.
Valuations firm Herron Todd White describes typical three- to four-bedroom homes on 500-900 sqm blocks along the northern coastal areas of the Gold Coast rising in value by 20-25% over the past 18 months.
Yes, this is part of the GFC recovery, but prices are now well exceeding the last peak of 2007.
Prestige canal properties are in high demand and property values are growing as a result.
In Hope Island, homes that were worth $1.3 million just 18 months ago are now in the $1.6-$1.7 million range.
The southern Gold Coast market is also very strong, particularly in beachside suburbs where locals are upgrading.
Property prices in the central Gold Coast districts are also moving past their 2007 peak.
Our Queensland agents are reporting a lot of new enquiries from Sydney and Melbourne buyers and this trend is set to continue.
If you’re struggling to afford your mortgage in the southern capitals or looking for a more affordable investment opportunity, South East Queensland is the place to be.