Mid-Year Market Review: July 2024

Interest Rates and Their Effects

Interest rates have played a crucial role in shaping the property market. Early in the year, there was hope for a reduction in the cash rate by June, which sparked optimism and increased activity across many markets, including Brisbane. However, ongoing inflation has pushed back expectations for a rate cut, with some experts now forecasting that it might not happen until 2025, or there could even be a rate hike in the near future. This uncertainty has caused some of Queensland’s major markets, including Brisbane, to stabilize or experience slower growth as we head into winter.

Queensland Market Performance

Despite these challenges, Brisbane, along with other mid-sized capitals like Adelaide and Perth, has shown impressive growth. Brisbane’s median dwelling value has surpassed Melbourne and Canberra, reflecting continued market strength post-pandemic. Perth has already achieved double-digit growth in the first half of the year, highlighting its strong performance.

Regional Queensland Trends

Regional areas in Queensland are generally following the trends seen in their state capital. Regional Western Australia has shown strong performance but is slightly behind Perth, while regional Tasmania has performed better than Hobart.

In Queensland, regions are seeing steady demand, with some areas experiencing notable price increases.

Supply & Demand Challenges:

RA key factor impacting the Queensland market is the shortage of new housing. Supply has not kept up with rising demand, driven by increased immigration and a post-Covid shift towards larger homes. Although there are efforts to boost housing supply, issues like high construction costs, labor shortages, and slow approvals are causing delays.

Rental Market Dynamics

In Queensland, rental markets are experiencing historic lows in vacancy rates, which has led to significant increases in asking rents across most areas. This trend is consistent with the broader national pattern, where high demand is pushing rents higher.

Local Insights

For more detailed insights into specific Queensland markets and price segments, local experts provide valuable information on how their areas have performed in the first half of 2024.

Market Overview

The Gold Coast residential market has demonstrated resilience and growth in 2024, building on the strength observed last year. This growth is driven by a critical shortage of supply, increasing buyer demand, and strong population growth in the region.

Properties priced under $1 million have seen particularly high demand. The limited supply has created a competitive market, favouring sellers, and even less desirable properties are attracting attention due to the lack of options available to buyers.

Affordability remains a key concern for buyers, leading to a surge in demand for units over houses, especially in coastal areas like Surfers Paradise and Broadbeach. The unit market has experienced significant price growth, becoming highly competitive. For example, a unit in Chevron Renaissance in Surfers Paradise saw its price increase from $670,000 in early 2022 to $1,300,000 after minor renovations.

Outer Suburban and Townhouse Market

Demand for units is also strong in outer suburban areas like Pacific Pines, where townhouse prices have risen significantly over the past year. The trend indicates that affordability is driving buyers towards these suburban areas, further pushing property prices upward.

Prestige Apartment Market

The prestige apartment market remains robust, particularly in coastal areas. Luxury units continue to attract affluent buyers, including downsizers and interstate purchasers. The limited supply of high-end apartments ensures that demand remains strong.

Detached Housing Market

The detached housing market is experiencing a significant imbalance, with demand far outstripping supply, particularly in the northern corridor suburbs near the M1. The median house price on the Gold Coast has now reached around $1 million, with affordable options becoming increasingly scarce, especially near the beach.

Prestige Sector and Waterfront Properties

In the prestige sector, luxury waterfront homes are achieving record sales, driven by limited stock and sustained interstate interest. Notable transactions include a canal-front home in Sorrento, Bundall, which sold for $8.1 million, and a waterfront mansion in Robina that set a suburb record at $4.6 million.

Industrial Market Developments

On the central Gold Coast, there’s a noticeable trend of refurbishing older industrial buildings or replacing them with modern structures. This shift is driven by the increasing focus on the industrial sector. Developers are favouring multi-unit developments, which offer better profit margins compared to standalone warehouses. Significant sales include a 3100 square meter building in Luscombe sold for $10.25 million and a 3500 square meter vacant land site in Stapylton sold for $800 per square meter (HTW-Month-in-Review-Jun…) .

Investment Opportunities and Challenges:

The Gold Coast continues to present lucrative opportunities for investors, driven by a combination of high demand, attractive rental yields, and ongoing development projects.

Key opportunities include:

• High Rental Yields: Investors can benefit from the strong rental market, with high demand pushing up rental prices and providing attractive yields. This is particularly true in sought-after areas like Broadbeach, Surfers Paradise, and the southern Gold Coast.
• Capital Growth Potential: The Gold Coast’s property values have been steadily increasing, offering potential for capital appreciation. Investors looking for long-term gains can capitalize on this trend, especially in areas undergoing significant development and infrastructure improvements.
• Diverse Property Options: From luxury beachfront apartments to affordable units and family homes, the Gold Coast offers a wide range of investment options. This diversity allows investors to tailor their portfolios to their specific goals and risk tolerance.
• Development Projects: Ongoing and upcoming development projects, including residential complexes, commercial spaces, and infrastructure enhancements, are set to boost property values and attract more residents and businesses to the area. Investing in properties near these developments can yield significant returns.

Challenges:

Despite the positive outlook, investors should be aware of several challenges that may impact their investment strategies:

• High Competition: The strong demand for properties, especially in prime locations, has led to fierce competition among buyers. This can drive up prices and make it more challenging to secure desirable properties within budget.
• Interest Rate Increases: The rising interest rates since May 2022 have impacted borrowing costs, making it more expensive for investors to finance their purchases. This can affect overall profitability and cash flow.
• Affordability Issues: With property prices on the rise, affordability has become a concern for many buyers. This is particularly true for those looking to invest in detached houses in high-demand areas, where prices have soared well above the $750,000 mark.
• Regulatory Considerations: Investors must navigate various regulatory requirements, including those related to property management, taxes, and compliance. Staying informed and compliant with these regulations is crucial to avoid potential legal and financial issues.
• Market Volatility: While the Gold Coast market has shown resilience, it is not immune to broader economic factors that can cause market volatility. Investors should be prepared for potential fluctuations and have strategies in place to mitigate risks.

Overall, the Gold Coast remains a compelling destination for property investment, offering a mix of opportunities and challenges. Investors who conduct thorough research, stay informed about market trends, and work with experienced real estate professionals can navigate these complexities and achieve their investment goals.

This summary provides an in-depth view of the Gold Coast real estate market for July 2024, highlighting key trends and insights that are crucial for investors, homebuyers, and industry stakeholders.

Disclaimer: Original information sourced from HTW Month in Review, July2024​