Huge demand from interstate and overseas suggests Gold Coast will escape house price slump
Key indicators have emerged pointing to the future of house prices on the Gold Coast amid fears rising interest rates will cause a major slump. These are the areas to watch.
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A LEADING real estate agent says Gold Coast property prices won’t crash – because most interstate migrants don’t have children and have plenty of cash to splash.
Rising interest rates have seen house prices fall 2.7 per cent nationally from their peak, with Sydney worst affected.
However Ray White Burleigh Group CEO Tiger Malan said the Gold Coast would escape the downturns because the majority of interstate purchasers were cashed-up empty nesters who didn’t need a mortgage.
“You’re kidding yourself if you think the Gold Coast real estate market is about to crash like other cities,” Mr Malan said.
“I know that’s not necessarily what locals want to hear if they’re looking to buy their first home here or upsize with their family but the fact is, there’s still money coming up from down south.
“These people don’t have children, they’re not looking for schools on the Coast.
“They also don’t need to borrow much, if anything, to buy a home here so those rate increases may have a negligible impact on property values locally.”
Mr Malan said beachside suburbs were performing best, with stress more likely in outer suburbs.
“The mortgage belt is struggling a bit more than the beach stuff,” he said. “But we’re still seeing major deals that surprise all of us.”
Mr Malan’s comments are backed up by analysis by the Bulletin, which in August found enrolment numbers at state schools across the city were falling, suggesting families were being driven out of the property market.
The drops were most noticeable at primary school level, indicating student numbers would continue falling on the Gold Coast for the foreseeable future.
Mr Malan’s analysis is also supported by data reported by the Bulletin earlier this month showing huge numbers of people from Sydney and Melbourne plan to move here in the next five years.
Janneke Leffers, who arrived from Bondi with her family five years ago, now runs a business called ‘Moving to the Gold Coast’ which helps people to relocate to the city.
Ms Leffers said her business was booming, with interstate inquiries remaining strong and international migration now also taking off.
“(Interstate migration) hasn’t slowed down at all,” Ms Leffers said.
“I think it’s easier now that people can travel up themselves and figure out where they want to be. It definitely hasn’t changed.
“International inquiries are definitely up. More and more people from mainly New Zealand, the UK and South Africa are looking to move here. In the last six months there’s been a definite shift there.”
Ms Leffers said the tight rental market had put some people off making the move, but for people who were in a position to buy there were more opportunities available.
“People aren’t falling over themselves like they did six months ago to find property,” Ms Leffers said. “You are in a better spot finding something to buy than something to rent. The stock levels have definitely come up.”
Ms Leffers said while she had “quite a few” clients in their late fifties and early sixties, families were still moving to the Gold Coast from Melbourne and Sydney in big numbers.
However in most cases they were well-off people who favoured private schools, bolstering the case that house prices would remain elevated.
Ms Leffers said while she “didn’t have a crystal ball”, the number of people migrating to the Gold Coast made it hard to believe property prices would fall as much as elsewhere.
“We have seen a bit of a correction in the market,” she said. “But some of the reports are an expectation of 25 per cent property prices drops. We can’t really see that happening here, especially as we keep seeing arrivals.”
Mr Malan also said the volume of cashed-up interstate buyers meant the Gold Coast was less susceptible to property price falls than other Australian cities.
“I’m tipping a very soft landing for the Gold Coast,” he said.
“In fact, I wouldn’t be surprised to still see growth in some of the more prestige pockets of the Coast.
“Only time will tell but the type of buyer I’m still seeing is a more financially sound one.”
Ray White Surfers Paradise Group CEO Andrew Bell has also predicted the Gold Coast will escape a major downturn, writing last week that the volume of inquiries on properties for sale had “ticked up strongly” in the past four weeks.
“There are parts of Australia reporting a 15 to 20 per cent correction in real estate prices from their peak, but it’s not uniform and there are some very clear signs that the Gold Coast market is amongst the best performing market in Australia,” Mr Bell wrote in his fortnightly market report.
“At this stage, there is no sign of any substantial decline in migration into Queensland, and in particular the Gold Coast.”
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