Is Queensland’s property market finally outpacing New South Wales
Queensland has become the state to watch when it comes to property, following its strong response to the COVID crisis an...
Despite improving investment credentials across south-east Queensland, property buyers have been cautioned about buying an investment property in certain markets.
Speaking about the Gold andCoasts, managing director of SQM Research Louis Christopher said even though conditions are improving, investors need to have their wits about them before committing to a purchase.
“Investors need to be very mindful that these Queensland regions have most certainly experienced more volatility in their property market, have more con men and spruikers per head of population than Nigeria, and that the best course of action is to avoid off-the-plan developments unless value can be proven,” he said.
“My personal opinion is these areas are not good for novice, first-time property investors. Rather, they are potentially more suitable for experienced investors who need some diversification, who invest purely on the numbers and can see through the glitz for what it is.”
Mr Christopher said while the Gold Coast market appeared to be recovering, the improvements remain slow and could stall.
He said the rise in listings in recent months could be due to “desperate vendors finally putting their properties on the market”, prompted by improved conditions.
“Have you ever heard of the catch phrase ‘pent-up demand’? Well there can also very well be ‘pent-up supply’. That’s what the Gold Coast has – too many vendors who have been sitting on their underperforming property for years. They are now finally selling their properties given the chance to unload them because the market has picked up,” he said.
Despite the warning, Mr Christopher said the Gold Coast’s recovery was “slow but sure”.
“Low vacancy rates and a nice rental yield are attracting investors. Economic conditions for the Coast are also favourable in that the lower Australian dollar is attracting more domestic and international tourists to the strip. Plus, there is an increasing optimism on the Commonwealth Games in 2018. While there won’t be any massive infrastructure boost from current levels – it is the ‘Budget Games’ after all – there will be a positive effect nonetheless,” he said.
Overall, Mr Christopher said he anticipates the Gold Coast will outperform Brisbane, possibly posting a five to seven per cent rise in property prices this year.
He also spoke about the Sunshine Coast and said despite its reliance on the ‘health care and social assistance’ industry, the area was working hard to widen its economic base. If successful, he said, this would improve the housing market in the region.
There are many similarities between the Gold and Sunshine Coasts, Mr Christopher said, both in terms of their past performance and future growth prospects.
“Similar to the Gold Coast, the Sunshine Coast housing market experienced an extended and acute housing downturn between 2009 and 2013. Prices in some areas fell by more than a third. A combination of heavily inflated prices due to a 10-year run up (1998 to 2008), elevated unemployment numbers, a big drop in local tourism numbers, higher unemployment and higher interest rates (in 2010) all created the perfect trigger for an almighty property crash.”
Mr Christopher pointed to Noosaville as a prime example of this extended downturn, but said the future was looking less bleak.
“I think these areas have strong futures, not just in the long term, but also over the short term, as Australians rediscover why these geographically beautiful locations have been our playground for over 60 years,” he said.