Top seven Gold Coast investor hotspots revealed
The Gold Coast Bulletin in partnership with realestate.com.au has launched Make Your Move, a data-based guide to property investing. Today we reveal the Gold Coast’s seven top-performing suburbs for capital gains, rental yields and rental demand.
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Seven Gold Coast suburbs have been earmarked as top picks for investors looking to sink their funds into QLD’s hot property market.
New research by REA Group revealed units returned the biggest gains for investors in the following Coast suburbs: Surfers Paradise; Southport; Biggera Waters; Coombabah; Carrara; Mudgeeraba; and Nerang.
The seven hotspots ranked highest based on a number of indicators, including annual rental yield and demand, as well as capital growth over 10 and 20 years.
Other indicators were investor cashflow, calculated as monthly rent minus mortgage repayments, and the number of sales in the suburb in 2021, compared to 2011 and 2001.
While each of the suburbs had an impressive rental yield of around 6 per cent, capital growth over 10 years ranged between 13.3 per cent for units in Surfers Paradise – where investor cashflow was $435.58, to a huge 49.5 per cent in Mudgeeraba – which returned the highest monthly cashflow of $646.42.
Investors in these areas were also buoyed by a huge spike in demand for rental properties across the Coast on the back of 2020/21’s lifestyle shift to QLD by hordes of interstate residents.
Carrara posted the strongest annual growth in rental demand of 26.2 per cent, followed by Biggera Waters at 19.8 per cent.
Southport’s rental demand grew by a more modest 7.7 per cent, with the CBD suburb hard hit by Covid-19’s exodus of international students. But the centrally located suburb still delivered a healthy investor cashflow of $596.18, with capital growth of 15.6 per cent.
REA economist Paul Ryan said unit investors achieving a rental yield above 5 per cent were “doing very well”.
“House prices have risen, and that is pushing down rental yields,” Mr Ryan said.
“That doesn’t make houses a bad investment, they may just not be bringing in the same yields or cashflow.”
Mr Ryan said growth in rental demand for units on the Gold Coast had been “outstanding”.
“They are often cheaper to rent [than houses], are low maintenance and well located,” he said. “And with Covid, we have seen a lot of people moving to a region, and then renting before buying.”
Brisbane-based investor Siobhan White purchased a three-bedroom unit at Biggera Waters in 2018, initially leasing the property for short stays before deciding to move there with her family during last year’s lockdown.
The small business owner and mum-of-two opted to lease the waterfront apartment long-term once she was able to re-open her weightloss studio in Bulimba, and capitalised on annual growth in rental demand in the suburb of just under 20 per cent.
“It is just a beautiful unit looking out on the water in a great area, where you are literally five minutes from the beach and from Southport but out of the hustle and bustle of Surfers Paradise, so the body corporate fees are lower too,” Ms White, of Brighton, said.
“The rental market is really good and we have had lovely tenants in for more than 12 months now. When it sells we’ll have equity to set up two new businesses.”
REA data shows investor cashflow of $490.31 in Biggera Waters, with strong capital growth of 30.1 per cent over 10 years.
A total of 436 units were sold in the Broadwater suburb in 2021, compared with just 99 in the post-GFC property slump of 2011.
Ms White is selling the luxury apartment at 4206/5 Harbourside Ct in the WaterPoint Residences building via Adam Phillis, of Phillis Real Estate.
Mr Phillis said interstate buyers were eyeing investment properties across the Gold Coast.
“With the shortage of rental properties and increasing rent prices, investors are capitalising in this investor’s market,” Mr Phillis said.
“Investors throughout Melbourne and Sydney view the Gold Coast as having extremely affordable property prices and thus they are snapping up investment properties.”
The unit for sale has a large balcony with views over the Broadwater and Surfers Paradise skyline to the Gold Coast Hinterland.
Impressive facilities available to residents include a gym, cinema, library, games rooms, indoor and outdoor pools and rooftop barbecue.
Ray White Surfers Paradise director Andrew Bell said a surge in interstate migration had fuelled demand for rental properties.
Investors had continued their cautious return to market, as the heat from owner-occupiers and particularly first home buyers cooled when government grants were wound up earlier this year.
“Part of the reason investors are in the market again is the alternatives are not particularly attractive. By leaving your money in the bank you are getting less than one per cent; the stock market is seen to be at dizzying heights and people are thinking there could be a correction coming.
“Right now, they can get positive yields rather than negative gearing, so to get an annual return and pick up on capital gains has made real estate attractive again for investors,” Mr Bell said.
For more investment stories go togoldcoastbulletin.com.au.
INVESTOR HOTSPOTS (units)
Suburb | rental yield % | 10yr growth % | cashflow | rental demand annual growth %
Surfers Paradise 6.4 13.3 $435.58 12
Southport 6.3 15.6 $596.18 7.7
Biggera Waters 5.9 30.1 $490.31 19.8
Coombabah 5.8 21.4 $598.30 16.8
Carrara 5.8 30.7 $613.84 26.2
Mudgeeraba 5.8 49.5 $646.42 10.9
Nerang 6.6 16.7 $614.89 19.6
*source: REA Group
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