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The Gold Coast property market has made a comeback after achieving a higher than expected clearance rate at last month’s annual auction ‘Event’, according to a real estate group.
‘The Event’ held by Ray White Surfers Paradise saw a 70 per cent success rate under the hammer, signalling a resurgence of activity in the Gold Coast market.
Ray White Surfers Paradise Group chief executive Andrew Bell told Smart Property Investment that the clearance rate was “so strong that it caught [him] by surprise.”
From the 103 properties up for auction, more than $30 million worth of residential properties were sold. Mr Bell said this was a remarkable outcome, and “a higher success rate than Sydney and Melbourne were getting.”
The properties for auction were predominately in the sub-$1 million market, ranging from $170,000 for a small apartment to properties priced around $800,000 to $900,000.
With the diminishing number of landlords and attractive rental returns, Mr Bell believes the time is ripe for investors to jump into the Gold Coast market, and the broader market in general.
“Returns are probably the best they’ve been because rents have been firming but property purchase prices have been dropping, and interest rates are lower, so that’s the best scenario for investors for some time,” he explained.
The resurgence of activity was also evident in the change in buyers’ attitude over the month of marketing for The Event.
“It was like day and night between pre-Christmas and post-Christmas,” Mr Bell said. “It was like a line in the sand around Christmas Day.
“Before Christmas, the mood was very much one that had been affected by the GFC, so there was a lot of fear, a lot of apprehension, a lot of concern, a lot of doubt, and inaction by people.
“From Boxing Day on, it was completely the reverse. We had four times the inspection number we had from the previous year, and multiple bids on properties. In most cases, we had four or so bidders on the properties.”
Most properties were sold between five and seven per cent over the reserve price, he added.
While the surge of activity was across the board, ‘A-grade’ properties that were in an outstanding position or location attracted the bulk of the interest, while apartments in Surfers Paradise also saw strong interest. He attributes this increased activity to interest rate cuts and improved consumer sentiment.
“[The] buyers believe that it’s at the bottom of the market, and now is the time to get back in,” he explained. “There’s a belief that not only Australia, but the broader world economy are gaining some momentum.”
According to Ray White, the team also sold $13.8 million worth of prestige properties in the auction series. Mr Bell said this year’s Event was the best auction he held since 2007, with the amount of sales totalling at $72 million for the month ending January.
An auction is a public event for the sale of assets and property to the highest bidder among a group of buyers.