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Looking at investment unit on Gold Coast; Don't want a fight, just some perspective
Topic Started: 26 Aug 2012, 05:45 PM (6,750 Views)
stinkbug
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nipa hut
27 Aug 2012, 09:03 PM
Taking a step back from any particular style of dwelling, or any (substantial) discount available from a previous peak, it's worth asking: what were the fundamental economic drivers of Gold Coast property when it last boomed, and are they, or other new drivers, actually showing signs of bouncing back? Or was the GC just fundamentally overbought, at the levels of 4 - 6 years ago?

At one point it was cashed-up Japanese tourists that drove the market, then cashed-up NSW retirees. And there was a less-cashed up wave of the builders and real-estate and financial services types that built off those fundamental wealth inputs.

That financial ecosystem might all bounce back as before, of course. But is it showing signs of actually doing so? Or, are there any new fundamental and substantial drivers of GC capital growth on the horizon?

Or, is the GC settling in as a very nice, but expensively distant, commuter suburb of Brisbane?

(Don't get me wrong; I love the GC hinterland (e.g. Springbrook) and some of the coastal areas as well. But I'm hard-pressed to see how I could make an everyday living there now, and retirement is 20 - 30 years off.)

Careful - that sounds dangerously like common sense.
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peter fraser
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nipa hut
27 Aug 2012, 09:03 PM
Taking a step back from any particular style of dwelling, or any (substantial) discount available from a previous peak, it's worth asking: what were the fundamental economic drivers of Gold Coast property when it last boomed, and are they, or other new drivers, actually showing signs of bouncing back? Or was the GC just fundamentally overbought, at the levels of 4 - 6 years ago?

At one point it was cashed-up Japanese tourists that drove the market, then cashed-up NSW retirees. And there was a less-cashed up wave of the builders and real-estate and financial services types that built off those fundamental wealth inputs.

That financial ecosystem might all bounce back as before, of course. But is it showing signs of actually doing so? Or, are there any new fundamental and substantial drivers of GC capital growth on the horizon?

Or, is the GC settling in as a very nice, but expensively distant, commuter suburb of Brisbane?

(Don't get me wrong; I love the GC hinterland (e.g. Springbrook) and some of the coastal areas as well. But I'm hard-pressed to see how I could make an everyday living there now, and retirement is 20 - 30 years off.)

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But I'm hard-pressed to see how I could make an everyday living there now, and retirement is 20 - 30 years off.)


And therein lies the problem. It's fine moving there when you retire, but retirees don't want the party glitz and glamour strip, so they move to quiter suburbs, so they could really be anywhere if they don't have a view of the ocean.

Retirees also don't spend much, even wealthy ones don't splash money around, so there are only so many viable restaurants, taxis and bars who can make a living during the off season.

Units with ocean views sell well during the good economic times when business is doing well and well paid jobs are easy to find, but the area collapses during tough economic times. It will always be this way.

But if you really must buy a penthouse with fabulous views a short walk to surf beaches, you could do worse than buy right now.
Any expressed market opinion is my own and is not to be taken as financial advice
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zaph
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ScottyB
27 Aug 2012, 06:46 PM
My reason for buying are many - have enough equity in my home to 100% finance a small investment and start building a portfolio, starting to bracket creep tax wise and would like to get our household taxable income down so that we still qualify for family tax benefits etc (we have three kids but now just above the cut off). I love real estate and could spend all day looking at it, but shares go well over my head or interest for that matter. I procrastinated over buying so many houses years ago and missed out on a couple of what turned out to be great investments, I dont want to make that mistake again. I also agree that rents will increase and with the higher returns would look to keep building that portfolio.


If you want to reduce your taxable income, I have many charities that you can contribute to. Losing money should never ever be a motivation to invest.

Investment loses will be added back to your taxable income to determine income for welfare benefits. Do you have any idea what bracket creep is?
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ScottyB
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A lot of transport and other infrastructure will be developed in the build up to 2018 with the Commonwealth Games. The northern Gold Coast is my target area, for its accessability to the Pacific Motorway, making a trip into Brisbane city quite comfortable with upgrades to the current rail line in the pipeline to cope with numbers.

I jog up near where I am thinking of buying. I noticed that almost every attended balcony on the Esplanade on the weekend was older retired couples having their tea and toast. The northern end of the coastline here is not the glitter strip, its actually more like the Gold Coast before it became the glitter strip. Looking at the demographic that emerge from the various complexes in the area in the mornings there is also good mix of younger singles and couples as well, possibly those looking to avoid the bright lights and sin city locations further south. Demand seems good on rentals that are well located and relatively modern (there is heaps of older stock).

You can argue the drivers behind the Gold Coast market, but ultimately the number one industry is tourism, which has been crushed by the GFC and the dollar. I work in an area where I have a bit of contact with the tourism players, who anecdotally are noticing a pick up in things (certainly not a boom though). At the moment though unemployment is an issue, and one of the biggest threats to where it goes from here.

At the end of the day, its a great place to live and work, and thats what always brings people back. Affordability bought the NSW mob up here, in my opinion and from talking to some of them, when they saw the price of something with a filtered glimpse of Sydney Harbour compared to what that money could buy overlooking a far more beautiful panoramic coastline up here without the gridlock.

By no means is the Gold Coast out of the woods, but I dont know there is much further for it to fall either. The stock market is in recovery mode, and I suspect real estate will keep in step in about two years time. I want to get on board now when I have the luxury of choice rather than competing in the frenzy that this place turns into when someone calls the next boom beginning.

Just my opinions of course. I am only looking to take a very small step here, not buying a complex to knock down and build a tower.
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ScottyB
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zaph
27 Aug 2012, 09:26 PM
Do you have any idea what bracket creep is?
Sorry to the purists, I steal that terminology as my wage increases by yearly increments and also an indexed rise above inflation through a fixed industrial agreement. I know bracket creep is more to do with inflation vs tax policy but I use the term loosely to describe my base wage going up each year, which then gets loaded into penalties and allowances on the higher base. Either way, I slowly ratchet up towards a higher bracket.
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nipa hut
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ScottyB
27 Aug 2012, 09:37 PM
A lot of transport and other infrastructure will be developed in the build up to 2018 with the Commonwealth Games. The northern Gold Coast is my target area, for its accessability to the Pacific Motorway, making a trip into Brisbane city quite comfortable with upgrades to the current rail line in the pipeline to cope with numbers.

I jog up near where I am thinking of buying. I noticed that almost every attended balcony on the Esplanade on the weekend was older retired couples having their tea and toast. The northern end of the coastline here is not the glitter strip, its actually more like the Gold Coast before it became the glitter strip. Looking at the demographic that emerge from the various complexes in the area in the mornings there is also good mix of younger singles and couples as well, possibly those looking to avoid the bright lights and sin city locations further south. Demand seems good on rentals that are well located and relatively modern (there is heaps of older stock).

You can argue the drivers behind the Gold Coast market, but ultimately the number one industry is tourism, which has been crushed by the GFC and the dollar. I work in an area where I have a bit of contact with the tourism players, who anecdotally are noticing a pick up in things (certainly not a boom though). At the moment though unemployment is an issue, and one of the biggest threats to where it goes from here.

At the end of the day, its a great place to live and work, and thats what always brings people back. Affordability bought the NSW mob up here, in my opinion and from talking to some of them, when they saw the price of something with a filtered glimpse of Sydney Harbour compared to what that money could buy overlooking a far more beautiful panoramic coastline up here without the gridlock.

By no means is the Gold Coast out of the woods, but I dont know there is much further for it to fall either. The stock market is in recovery mode, and I suspect real estate will keep in step in about two years time. I want to get on board now when I have the luxury of choice rather than competing in the frenzy that this place turns into when someone calls the next boom beginning.

Just my opinions of course. I am only looking to take a very small step here, not buying a complex to knock down and build a tower.
Part of this post reads like a brochure, which does make me wonder at a poster with just 6 notches on their belt... :dry:

But I'll take the charitable view, and note the more promising part: e.g. "I jog up near where I am thinking of buying." If you are indeed taking a street-level view of your options, and are patient enough to wait for a true bargain, then you'll probably do well enough even if GC never truly booms again--and even better if it does.
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ScottyB
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nipa hut
27 Aug 2012, 10:02 PM
Part of this post reads like a brochure, which does make me wonder at a poster with just 6 notches on their belt... :dry:

But I'll take the charitable view, and note the more promising part: e.g. "I jog up near where I am thinking of buying." If you are indeed taking a street-level view of your options, and are patient enough to wait for a true bargain, then you'll probably do well enough even if GC never truly booms again--and even better if it does.
Um no. Until I went to a few auctions, researched some selling prices then compared them to what similar stock sold for circa 2007 I was probably more bearish than even the most fanatical on this forum. Even had some stand up arguments with a few real estate agents on price expectations. Certainly back on the fence now and have softened my angry bear view considerably. The best saying I ever heard in real estate was that the buy of the century comes up about once a month. I am not looking to make a killing, just start a portfolio and build from small steps. When I did buy shares, I bought a couple one month, the same dollar amount the next month and so on, I think they call it dollar cost averaging, meaning you were less exposed to market fluctuations. I dont want to go "all in" right now, but a small start now, maybe another in a years to 18 months time if the world hasnt fallen apart, then another and so on ....

Sorry it read like a brochure, I just believe in the place and that like before, the savage bust will lead to the next upswing.
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silverx
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ScottyB
27 Aug 2012, 09:37 PM
A lot of transport and other infrastructure will be developed in the build up to 2018 with the Commonwealth Games. The northern Gold Coast is my target area, for its accessability to the Pacific Motorway, making a trip into Brisbane city quite comfortable with upgrades to the current rail line in the pipeline to cope with numbers.

I jog up near where I am thinking of buying. I noticed that almost every attended balcony on the Esplanade on the weekend was older retired couples having their tea and toast. The northern end of the coastline here is not the glitter strip, its actually more like the Gold Coast before it became the glitter strip. Looking at the demographic that emerge from the various complexes in the area in the mornings there is also good mix of younger singles and couples as well, possibly those looking to avoid the bright lights and sin city locations further south. Demand seems good on rentals that are well located and relatively modern (there is heaps of older stock).

You can argue the drivers behind the Gold Coast market, but ultimately the number one industry is tourism, which has been crushed by the GFC and the dollar. I work in an area where I have a bit of contact with the tourism players, who anecdotally are noticing a pick up in things (certainly not a boom though). At the moment though unemployment is an issue, and one of the biggest threats to where it goes from here.

At the end of the day, its a great place to live and work, and thats what always brings people back. Affordability bought the NSW mob up here, in my opinion and from talking to some of them, when they saw the price of something with a filtered glimpse of Sydney Harbour compared to what that money could buy overlooking a far more beautiful panoramic coastline up here without the gridlock.

By no means is the Gold Coast out of the woods, but I dont know there is much further for it to fall either. The stock market is in recovery mode, and I suspect real estate will keep in step in about two years time. I want to get on board now when I have the luxury of choice rather than competing in the frenzy that this place turns into when someone calls the next boom beginning.

Just my opinions of course. I am only looking to take a very small step here, not buying a complex to knock down and build a tower.
i actually love gold coast as well. weekend was always busy with activities we can do while we were living there. but unless there is a significant economic driver for that place (apart from tourism) that place will never wiggle its way out of the downturn its currently experiencing.

I dont know how solid the plans for wavebreak, art centre etc are but it would certainly be interesting time for gold coast had all these plans come true

so if you are thinking to get an investment unit i would probably get around those areas where the big projects are going to be, but i would probably wait for another 1 year because i think the price is still going down in most parts of gold coast
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Gold coast and Roma named as potential property hot spots in Australia

Monday, 15 October 2012

The Gold Coast property market in Australia is set to improve in the second half of 2012 with signs there may already be an upswing in buyer numbers.

The recovery is expected to be gradual, according to PRDnationwide, but the outlook is the best it’s been in years.

PRDnationwide research analyst Robert Matta said emerging indicators suggest a likely turn in the Gold Coast market is on the horizon.

‘There are exceptional buying opportunities present in the marketplace for those brave enough to test their nerve and savvy enough to buy well,’ he said.

He believes upgraders from outside the region are looking to purchase on the Gold Coast to capitalise on the opportunity to purchase a property they could not afford until now.

‘Investors may also consider re-entering the market soon enough after several years on the sideline, with rental yields firming on the back of bargain buys,’ he explained.

He pointed out that the key challenges facing the coast’s property market are vendors adjusting their price expectations to meet market demand and consumer nervousness.

‘The signs of a struggling property market may not appeal to all potential buyers, however ,the risk of taking the leap, given the spate of negative property data and sentiment will often yield the greatest returns,’ he added.

Meanwhile, PRDnationwide research shows sales volumes for both houses and units are at their lowest levels in over two decades. Just 2,158 houses changed hands during the six months to June 30, 2012, down 17.1% per annum since June 2007.

The median house price continued to fall, down 6.7% to $466,750 from a year earlier.
Some of the best value on offer in the market is from excess unit stock in the higher end of the market with developers eroding margins to make sales.

‘Since the peak experienced during the June 2007 period, unit sales volumes have decreased on average 19.8% per annum. Anecdotal evidence suggest enquiry levels from end uses, particularly first home buyers and those looking to downsize, have increased since the beginning of 2012 influenced by increase mortgage affordability, sustained price corrections and a notable price disparity between the house and unit market,’ said Matta.

The Gold Coast land market has also recorded the lowest sales volumes in 25 years with a total of 318 transactions registered during the six months to June 2012, representing a 21 per cent fall from the December 2011 period.

‘It is anticipated that the trend of declining sales volumes will turn markedly in the coming years as competition between the banks drives variable mortgage products to affordable lows providing yet another incentive for first home buyers to enter the market,’ added Matta.

Research also shows that the Roma residential property market has experienced exceptional growth during the April 2012 half year period. The volume of house sales increased by almost 70% and the median house price rose by 13.3% during the year to 30 April 2012, as resource workers and investors flocked to the region.

Matta said during what had been a challenging five years in the Australian housing market, Roma had bucked the nation’s trend to record consecutive average annual growth of 7.2% in the median price during this period.

‘Impressive rental yields are currently on offer to investors looking to capitalise on purchasing affordable property in an unaffordable rental market. Significant resource based projects in the area will continue to underpin and safeguard the local economy by generating a stable flow of short to long term employment opportunities that will support a positive outlook for capital asset appreciation,’ he explained.

He added that a shortage of both long term and short term accommodation in Roma has had an adverse impact on the current rental market, with exorbitant growth providing the catalyst for a spike in developer activity and subsequent uplift in land sales.

‘Super charged price escalations over the year have led to an increasingly unaffordable rental market, particularly for renters without the benefit of subsidised rent. Many long term residents in rental properties are either relocating as a result of the increase cost of living or more noticeably are considering a mortgage as a more affordable alternative. Investors are also doing their part to alleviate further price growth pressures, fast becoming a dominant segment in the Roma property market,’ Matta said.

During the year to the end of June 2012, median rental prices for four bedroom houses increased by 69.4% to $800 a week. The median rent for three bedroom houses was $500 for the June 2012 quarter, a 42.9% increase from the June 2011 period.

The Australian Capital Territory is still in a downward phase of its property cycle but investor activity is increasing, the research also shows.

A total of 1,403 houses sold during the first half of 2012 was the lowest level of sales in the past 20 years. The median house price was down. PRDnationwide Inner North director Jeremy Francis said that the market’s stagnation was created by vendors’ high expectations and buyers’ dented consumer confidence.

However, the top end of the market has remained stable in the past two years, with properties transacting for $1,000,000 plus accounting for 4% of sales.

‘My forecast is for slow but steady growth over the next 12 months. Then three to six months after the election I expect prices will rise quite strongly as the new government will start spending money in the region to deliver on election promises,’ said Francis.

Derek Whitcombe, PRDnationwide Canberra Central principal, said the investment market has been buoyant over 2011 and into 2012, with investors targeting properties in close proximity to shopping centres and educational institutions.

‘The demand from investors is particularly strong in the inner areas such as Kingston in the inner south and Braddon in the inner North, Bruce in the inner Belconnen area and also in the new developing area of Molonglo which is less than 10 minutes’ drive from the CBD,’ he said.

He believes that in the next six to 12 months there should be a slight improvement in sales of established homes under $800,000 in most areas and apartment sales between $400,000 and $650,000 should also be quite healthy.

‘The deductibility of stamp duty for investors and the high rent return in Canberra property is seeing strong interest from Sydney investors. Most popular are one bedroom and study and smaller two bedroom configurations with recent developments not seeing as much interest by tenants in one bedroom designs,’ he explained.

The median rent for a four bedroom house in the inner city increased by 11.5% in the year to March 2012, closing the period at $725 per week. The strong demand for detached houses extended to the Woden and Weston Creek region, recording a 9.1% growth for a four bedroom house.

The report says recently announced cuts to the federal budget have further dented buyers’ confidence as public servants contemplate interstate relocations. Also the effect of the European economic issues is still keeping the brakes on for some people.

Read more: http://www.propertywire.com/news/australasia/australia-property-hot-spots-201210157042.html
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stinkbug
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Now would be a pretty good time to start looking at the GC, provided you wanted to live there.

I wouldn't buy a unit there for investment purposes, but that's just me. No doubt someone else has managed to make it work.
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While it's true that those who win never quit, and those who quit never win, those who never win and never quit are idiots.

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