Investors are leading the surge in buyer activity on the Gold Coast, according to one leading property group.
Raine & Horne have reported that multiple offices have seen confidence increase by 60 per cent due to low rates and affordable property prices.
“After a quiet period in consumer confidence, favourable winds are once again inflating the sails of the Gold Coast’s residential property market,” Raine & Horne CEO Angus Raine said.
He explained that economic conditions allowed many buyers and investors to capitalise on the region’s undervalued residential property.
Another factor was the RBA’s recent decision to cut the official cash rate to 2.75 per cent.
“Most of the big banks have passed on the rate cut in full and Raine & Horne is already registering a rebound in optimism as Queensland buyers take advantage of the low rates to secure a home,” said Mr Raine.
According to principal of Raine & Horne Surfers Paradise Clark Brackenridge, investors were at the forefront of the recovery in his market.
“Investors are identifying now that they can buy properties on the Gold Coast for much cheaper rates than any other major centre, and the yields aren’t too different,” he told Smart Property Investment.
“A lot of the investors have done their homework over a period of time and I think they have realised that our market has bottomed out.”
Mr Brackenridge said the volume of sales in the first three months was up 50 per cent from the year before.
He added that investors preferred apartments over houses as they did not have ongoing maintenance issues and were also more affordable.
“I reckon that apartment prices have gone back to 2003 levels, so you can really buy well," he said.
“I’ve been selling here since 1992 and I would say that in all that time, I’ve never seen a time where you can buy better.
"Because our volumes are going up here, we’re starting to run short of stock, so the next thing that will ultimately happen is stock gets short and it forces the prices up.”
Mr Brackenridge said another trend in the market was the prevalence of investors purchasing properties using self-managed super funds (SMSFs).
“In the old days, we might see 10 to 12 a year but now we are seeing 20 to 25 a year-plus, so the people buying on super funds in our market have probably gone up 25 to 30 per cent since last year," he noted.
He said this may be due to people being weary of the share market and feeling that they have more control with properties than shares.