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Steer clear of these Coast suburbs: report

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Steer clear of these Coast suburbs: report

Hope Island is on a list of ‘suburbs to avoid’ according to an investment report.Source:Supplied

Despite the Gold Coast’s glittering property market, there are five Coast suburbs to steer clear of, according to separate reports. Is yours on the list?

IT GOES against the apparent steady boom of the Gold Coast property market, but separate reports have named five Coast suburbs that buyers should steer clear of.

Four local areas have made the top 100 most-risky suburbs across Australia — Broadbeach, Surfers Paradise, Hope Island and Southport.

Broadbeach is in the top 100 ‘risky’ suburbs in Australia for buyers.

Broadbeach is in the top 100 ‘risky’ suburbs in Australia for buyers.Source:News Limited

So is Surfers Paradise. Photo: David Clark

So is Surfers Paradise. Photo: David ClarkSource:News Corp Australia

So what has landed some of the region’s most popular suburbs in the danger zone? According to research house RiskWise Property Review, there is a large number of units in the pipeline which are likely to lead to significant oversupply.

“Our research shows that 10,614 new units will be added to the Gold Coast property market over the next 24 months. This represents a small increase and is unlikely to have any significant impact on the market,” said RiskWise CEO Doron Peleg.

“However, Surfers Paradise and Broadbeach have a larger number of units in the

pipeline, and these areas carry a high level of risk.”

“Since many units in these areas are sold off-the-plan, potential buyers face three types of major risks being equity risk, cashflow risk and settlement risk.”

It’s because of an oversupply of these, according to a research house. Photo: David Clark

It’s because of an oversupply of these, according to a research house. Photo: David ClarkSource:News Corp Australia

Broadbeach, with a median unit value of $510,000 has 1125 properties in the pipeline, with the percentage of existing stock sitting at 18.4 per cent, and a vacancy rate of 3.4 per cent.

Surfers Paradise, which has a median unit value of $394,000 has 2294 properties on the way.

However, Mr Peleg said the level of supply in other areas was expected to be absorbed by significant population growth forecast.

But large numbers of new residents are forecast. Picture: Jerad Williams

But large numbers of new residents are forecast. Picture: Jerad WilliamsSource:News Corp Australia

Ray White Surfers Paradise CEO Andrew Bell said current estimates on migration numbers to the Gold Coast indicate 5000 new dwellings would have to be build each year.

“On this basis, the forecast is we need about 40 per cent of all constructions to be for apartments, 23 per cent for small lot homes, 20 per cent for townhouses, 15 per cent for traditional detached housing and two per cent for retirement aged care,” Mr Bell said.

“The current construction wave that we are seeing is not only making up for the past years where we had under construction but also meeting current demand.”

Meanwhile, a separate report has named on northern corridor suburb as a ‘negative growth trap’.

Groundwork underway at the $1 billion Coomera Town Centre. (AAP Image/Dave Hunt)

Groundwork underway at the $1 billion Coomera Town Centre. (AAP Image/Dave Hunt)Source:AAP

Coomera witnessed a decline of 5.5 per cent in its housing market over the 12 months to November 2017, according to a property investment specialist.

Suburbanite founder and director Anna Porter produced the report using CoreLogic data, to determine 24 suburbs across Australia that investors should steer clear of.

It follows commentary from industry experts that buyers will flock to the northern corridor as a result of infrastructure investment like the Coomera Town Centre, that’s due for completion later this year.

Originally published: www.news.com.au

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Opinion

Experts warn of ‘debt bomb’ as housing downturn worsens

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debt bomb
AUSTRALIA is facing a “debt crisis” — and the property market and our entire economy are at risk as a result.

That’s according to the sobering 60 Minutes segment Bricks and Slaughter which aired last night, revealing the country’s property downturn was just the tip of the iceberg.

According to reporter Tom Steinfort, the current slump is actually “more like falling off a cliff”, with a number of real estate and finance experts claiming houses could plummet in value by up to 40 per cent in the next 12 months.

If that happens, it would also cause an economic “catastrophe”.

Mr Steinfort spoke with data scientist Martin North from Digital Finance Analytics, who said Australia was uniquely vulnerable when it came to an economic crash tied to a property downturn.

“At the worst end of the spectrum, if everything turns against us we could see property prices 40-45 per cent down from their peaks, which is a huge deal,” he said.

“There’s $1.7 trillion held by the banks in mortgages for owner-occupies and investors. And that’s about 65 per cent of their total lending.

“That’s higher than any other country in the Western world by a long way.

“There’s probably no country in the world more susceptible to the ramifications of a housing crash than Australia. We are uniquely exposed at the moment.”

Mr North said Australia was now in the same position as the US was back in 2006 and 2007 — a position which triggered an economic collapse.

“As a society, and as a government, and as a regulatory system, we’re all banking on the home price engine that just goes on giving and giving and giving. It’s not going to,” he said.

“We’ve got a debt bomb, we’ve got a debt crisis and at some point it’s going to explode in our face.”

debt bomb

Melbourne homeowner Mohammed Souid told 60 Minutes his family was experiencing mortgage stress. Picture: 60 MinutesSource:Supplied

It’s a sentiment shared by Laing and Simmons real estate agent Peter Younan, who said the median house price in his patch in Granville in Sydney’s west had dropped from $1.2 million to $1 million in just one year — a shocking $200,000 plummet.

He said foreclosures had also risen by 600 per cent in the region.

“The mortgage stress is definitely being felt especially in this area,” he said.

60 Minutes also spoke with several Aussie homeowners who gave harrowing details of the stress they faced trying to pay off their mortgages, including having their power turned off and being “hounded’ by their banks.

What does a million dollars buy in Aussie capital cities?

debt bomb

Market analyst Louis Christopher of SQM Research said the market had been “clearly overvalued”, labelling the downturn as the “correction we had to have” — at least in Sydney and Melbourne.

“On our numbers, Sydney was effectively over 40 per cent overvalued. And Melbourne was overvalued by about the same amount,” he said.

But property investor Bushy Martin said the blame lay squarely at the feet of buyers who “mortgaged themselves up to their eyeballs” in a bid to snap up dream homes before being able to afford them.

debt bomb

Property investor Bushy Martin says homeowners are to blame for the crisis. Picture: 60 MinutesSource:Supplied

However, the segment has also sparked backlash online, with some claiming the situation had been exaggerated.

One Reddit user branded the report as an example of “alarmist journalism and scare tactics”, while another said it was “dramatic and cringe-worthy”.

Others also criticised the segment for making it seem like all homeowners would be affected, when the downturn was actually mainly focused in the NSW and Victorian capitals.

And some said it was unfair to blame the banks for the situation, and that homeowners needed to take responsibility for their own decisions.

That was in response to comments made by one homeowner on the program, who said the bank had “suddenly switched the mortgage to interest and principal”, raising his repayments by 57 per cent.

“The interest only part annoyed me the most. The bank didn’t ‘suddenly change’ your repayment from (interest only) to (Principal and interest) your IO term expired. You a) knew this would happen and b) assumed the bank would renew it when it expired. I hope this speculator gets burnt first,” one Reddit user said.

Related articles: Experts warn of ‘debt bomb’ as housing downturn worsens

Source: news.com.au

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Opinion

This suburb has been identified as one of Australia’s most consistent property markets and it’s on the Gold Coast

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ONE of Australia’s most consistent property markets is on the Gold Coast and is primed for future price growth.

Michelle Hele
Gold Coast BulletinAUGUST 30, 20183:45PM
gold coast houses

Clear Island, where this home at 8 Istana View is listed for sale is among Australia’s most consistent property markets.

ONE of Australia’s most consistent property markets is on the Gold Coast and is primed for future price growth.

Clear Island Waters has been identified in the latest Hotspotting Price Predictor Report in the top four most consistent Australian suburbs for property sales.

According to Terry Ryder of Hotspotting the suburb was one which recorded a consistent level of sales and demand quarter after quarter.

It has recorded about 40 property sales every quarter for the past two years, despite its high median house price of $1,150,000.

It’s median house price increased by 16 per cent in the past 12 months.

Mr Ryder said consistent sales patterns were generally a precursor to price growth and that suburbs such as Clear Island Waters “represented safety for investors’’.

“They are usually not boom markets, but have the valuable quality of solidity. And markets with this high level of even performance often have good price growth over time,’’ he said.

Mr Ryder said it was an exampled that consistent markets could produce good price growth in the short-term and steady long-term capital growth rates.

Real Estate Institute of Queensland Zone Chair Andrew Henderson predicts a lift in buyer activity on the Gold Coast during spring.

The Gold Coast has grown up

“Historically as the weather warms up moving into springtime we also see an increase in buyer market activity and there is a rise in the number of properties being listed for sale with planned spring auction dates,’’ he said.

“We are anticipating continuing buyer activity with the strong migration numbers to the Gold Coast form interstate and also with the number of auctions being conducted increasing each week.’’

Mr Henderson said units close to the beach were in demand from owner occupiers, property investors and also those looking for a beachside “weekender”.

Source: www.news.com.au

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Opinion

Why this young Sydneysider is packing up and moving to the Gold Coast

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Why this young Sydneysider is packing up and moving to the Gold Coast

Sydneysider Angus Terry is packing up to move to the Gold Coast. Photo: Gavin Jowitt

Sydneysider Angus Terry is preparing to leave the state he has called home his entire life.

Packing up his job in finance, his house and life, he will move to the Gold Coast with his partner, where the couple have bought a new home and a development site on which Mr Terry will build and run a gym.

The couple are part of a growing movement of young, professional southerners migrating to south-east Queensland.

Why this young Sydneysider is packing up and moving to the Gold Coast
The Vue Terrace Homes at Robina, where Angus Terry has bought a property. Photo: Robina Group

While retirees and holiday-home buyers have long made up a healthy portion of Gold Coast property purchasers, now there’s a new demographic: young couples and families.

Annual migration to the Gold Coast hit its highest level in a decade at the end of 2017, figures from the Australian Bureau of Statistics show.

Lured by a thriving local economy and, of course, the beach lifestyle, cashed-up migrants are often in the headlines for purchases of multimillion-dollar, ocean-front mansions at Mermaid Beach and Surfers Paradise. But for most southerners, the Gold Coast’s relative affordability is what attracts them.

Why this young Sydneysider is packing up and moving to the Gold Coast
The Gold Coast lifestyle: the pool at the Vue Terrace Homes. Photo: Robina Group

Mr Terry said he was surprised at the affordability of the Gold Coast and flew up to see it for himself.

“Honestly, what you can find on the Gold Coast is 10 times the value of what you get here in Sydney,” he said.

“A lot of places in Sydney are quite old and they still want over $1 million. I can come to Robina and get a beautiful, three-bedroom brand new terrace with modern styling in a lovely community atmosphere for $600-odd thousand. Affordability was definitely a massive consideration.”

Why this young Sydneysider is packing up and moving to the Gold Coast

Brand new contemporary homes: Inside one of the Vue Terrace Homes. Photo: Robina Group

Mr Terry will cut his lengthy and crowded train commute to a literal one-minute walk in the park after securing a townhouse in the Robina Group’s Vue Terrace Homes community. He also snapped up a CBD Robina development site with plans to build an Anytime Fitness gym.

“Sydney is a great city but it’s very full-on to get anywhere, it’s very claustrophobic,” he said. “We have always dreamed of living a short drive from the beach. When I was growing up we came to the Gold Coast for family holidays, so I knew the area quite well.

“I’m originally from Bathurst and I wanted a country town feel somewhere on the coast — Robina really was the answer. It has the best of both worlds.

Why this young Sydneysider is packing up and moving to the Gold Coast
Change is in the air: Mr Terry says he’s excited for his fresh start in a new career and a new home town. Photo: Gavin Jowitt

“We are going to be working hard so we wanted a place that we could come back to and really relax. Vue’s beautiful pool and barbecue area and its direct access into Robina City parklands was a huge drawcard.”

Data from the Domain Group shows that house prices in Robina rose by 6.4 per cent over the past 12 months.

Robina Group sales manager Azura Griffen said Robina had become particularly attractive to interstate migrants. Sydney and Melbourne purchasers recognised the value on offer in the Gold Coast market, she said.

“We are seeing an increasing number of buyers from the southern capitals.”

“Buyers from interstate are attracted to the lifestyle benefits on offer in Robina.  Our education facilities in particular are a major drawcard — Robina is home to Gold Coast’s top-two private schools and Bond University.

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