What is Happening with the Property Market?
While you have probably read a number of gloomy stories in the media or seen stark warnings on TV about dropping house prices, it’s worth looking at what is happening in the property market in some detail and reflecting on what that means for you.
While we are definitely seeing prices soften in the two major capitals of Sydney (down 7.4%* in 2018) and Melbourne ( down 4.7%* in 2018), it worth noting that Queensland has not generally been impacted and that values are remaining constant at present. (* As reported by Westpac Bank utilising CoreLogic Data). These reductions are considered to be an adjustment to run away price growth which has clearly got out of hand with Sydney and Melbourne now both in the Top 10 of least affordable cities in the world to live in. For the sake of those who love stat’s, Melbourne is 6th and Sydney is now 2nd according to the annual Demographia International Housing Affordability Survey.
Given those statistics, it is hardly surprising that some of the heat was due to come out of those markets. What we need to consider then is how is this likely to impact on those of us who live on the Gold Coast?
To do this, we should consider some of the economic fundamentals of our economy which are currently extremely strong:
- Unemployment at 4.41% against a national average of 5.4%
- Population growth of 2% per annum with forecasts of 77,000 growth in 7 years
- Significant uplift in resource prices (Iron Ore up 18.5% year on year) driving recovery in the resource sector
- Commencement of expansion of M1 from Tugun to Varsity Lakes at cost of $1bn
- $300m expansion of Gold Coast Airport
- $112m committed by the Federal Government to extend the light rail to Burleigh
- Development pipeline of nearly $20bn over the next decade
- Almost $10bn of infrastructure spend planned for the next decade
While we are not saying this will mean we are immune to market fluctuations, what it does point to is that our base line economy is strong and the fundamental factors of employment, tourism, resources and development are all still performing well.
As Australia’s fastest growing city, the Gold Coast has had a long history of being a boom or bust economy but we have matured significantly from those early days to now being a vibrant destination with strong local industry, enhanced transport links and a raised international profile (thanks Comm Games!). We are also home to major education and health facilities with numerous smaller industries now helping spread the load.
Let’s also not forget we enjoy one of the best climates in the world and are surrounded by a staggeringly beautiful environment of beaches and Hinterland!
All in all, our feeling is that while property may slow down slightly and we are likely to see price growth go off the boil, there remains no shortage of people who want to be here and live the lives we are so blessed to enjoy.
For any prospective sellers, this indicates a positive time to go to market as they are probably near the top of the market in this current cycle but able to sell effectively as buyers exit other over heated markets and look to the Gold Coast as an option where they can find work as a result of our growth but also find housing vastly more affordable.
We hope that you have enjoyed reading this update and please feel free to get in touch anytime to chat with us about our experience in the market. Obviously, we love to chat to buyers and sellers but we are also more than happy to discuss our broader thoughts on the market and where we see it going. We can also do a suburb specific report for you if would find it of benefit, just let us know.
And to sign off, the joke of the day courtesy of our 10 year old daughter:
“How do you make a tissue dance?”…..
“Put a little boogie in it!” Boom Boom!!