Gold Coast house prices: 2022 prediction shows more big rises

A property investment agency has detailed where it thinks Gold Coast house prices are going in the next 12 months after a year of explosive growth. See how your area fares.

ANALYSIS by a property investment agency suggests the Gold Coast is facing another year of double-digit house price increases as demand shows no sign of abating.

InvestorKit, in its Market Pressure Review Report, said it expected the Gold Coast region will continue to boom over the next six to 12 months despite some areas recording price rises of as high as 38.2 per cent in the year to August 2021.

The company, which analysed eight Statistical Areas Level 3 (SA3) regions across the Gold Coast, said Broadbeach-Burleigh experienced the highest median house price increase at 38.2 per cent, followed by Coolangatta (21 per cent) and Surfers Paradise (18.9 per cent).

Its analysis also revealed that the number of days properties remained on the market had fallen by an average of 20.8% in the past year, while listings declined by 7.3% – highlighting serious issues with supply.

The report said demand may increase even further when borders reopen.

“Our expectation for the 6-12 months ahead is that market pressure remains intense,” the report said.

“ … We expect 2022 to produce near double digit growth for most of the (Gold Coast) regions”.

InvestorKit founder Arjun Paliwal.

Arjun Paliwal, Head of Research and founder of InvestorKit, said while he expected prices to continue rising, the rate of increase was likely to slow after this year’s eye-popping figures.

“The significant stock shortage in the Gold Coast is pushing house prices up as buyers from Sydney and Melbourne consider a seachange and shift in lifestyle during the pandemic and others bring forward their retirement plans,” he said.

“ … Market pressure in the region will see house prices continue to rise over the next 12 months, but the pace of growth may slow as sales volumes decline slightly in some areas and listings increase.”

Mr Paliwal said the rental market on the Gold Coast also remained under significant strain.

“Data on rental prices indicates similar intense market pressure as the sales market, and investors will notice a decline in rental yields as house values increase,” he said.

“For those with properties across the most popular beachside regions of Broadbeach-Burleigh, Surfers Paradise and Coolangatta, expect medium-level yields of 3 per cent, while those in growing markets such as Robina, Nerang and Southport can demand yields above 4 per cent.”

INVESTORKIT VIEW ON GOLD COAST MARKET

Broadbeach - Burleigh

House prices in Broadbeach - Burleigh experienced the highest annual growth in the Gold Coast in the 12 months to August 2021, at 38.2 per cent, while units grew by 15.7 per cent. With the property market remaining hot, the average days on market for sales has declined 39.4 per cent for houses and 25.4 per cent for units. The pressure within the rental market has led to a strong rise in median rents over the last year, up 15.6 per cent for houses, and 13.3 per cent for units annually.

Coolangatta

Median house prices in Coolangatta rose 21 per cent over the 12 months to August, while units have grown by 16.9 per cent. The pressure within the rental market has led to a strong rise in median rents, too, up 10.4 per cent for houses, and 10 per cent for units annually. Investors can expect a medium-level rental yield of more than 3.5 per cent for both houses and units in Coolangatta, which are relatively well placed in the current low-rate environment.

Gold Coast - North

Median house prices in Gold Coast - North increased 11.2 per cent while units grew just 5.6 per cent in the 12 months to August 2021. The average number of monthly listings for lease has been declining over the last 15 months, down 21.1 per cent and 11.3 per cent, respectively, for houses and units over the past year - indicating a high-pressure rental market. The vacancy rate is now sitting well below 1 per cent.

Nerang

Median house prices in Nerang increased 18.1 per cent while units have grown 13.1 per cent this year. Pressure within the rental market has led to a steady rise in median rents, with houses up 10 per cent and units up 4.7 per cent. Investors can expect house rental yields of more than 4 per cent while units can command a high rental yield of more than 5 per cent.

Ormeau - Oxenford

Median house prices in Ormeau - Oxenford experienced one of the lowest increases in the region, at 13.7 per cent, but capital growth still remains strong, overall. Meanwhile, unit prices increased by just 4.3 per cent. Increased rental demand in the area has led to a rise in median rents over the last year, up 6.5 per cent for houses and 7.5 per cent for units.

Robina

Robina’s median house prices have achieved a 13.4 per cent annual growth while units have grown 6.5 per cent annually. With rental market pressure rising, investors can expect a healthy house rental yield of more than 4 per cent and a high unit rental yield of more than 5 per cent. The data reveals yields are reducing slightly due to the heavy uplift in prices; however, rents are also rising steadily.

Southport

Over the past year, median house prices in Southport have been rising, with house prices increasing 14.1 per cent annually and units growing 8.9 per cent annually. Pressure within the rental market has led to a steady rise in median rents over the last year, up 10.1 per cent for houses, and 7.5 per cent for units annually. Investors can expect rental yields above 4 per cent.

Surfers Paradise

Median house prices in Surfers Paradise experienced some of the highest growth rates in the Gold Coast, with houses increasing 18.9 per cent and units rising 13.5 per cent. The monthly sales volumes for houses has increased 52 per cent and 72.7 per cent for units. The combination of rising prices, declining inventory, and drop in vendor discounting indicates Surfers Paradise is a high-pressure sales market.

HOW MUCH YOU NEED TO SAVE FOR A DEPOSIT

FIRST home buyers on the Gold Coast are being squeezed out of the market, with those on average incomes needing six-and-a-half years to save a deposit, new figures reveal.

Finder senior editor money Sarah Megginson said saving deposits had become a “struggle” for first-home buyers.

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“To put down a 20 per cent deposit, buyers on the Gold Coast will on average need to have a whopping $121,000 in the bank,” she said.

“But the Gold Coast is not just one market. It’s dozens of individual suburban markets, each with their own price points and growth drivers, so if you’re prepared to adjust your expectations as a first homebuyer, it’s still very possible to own your own home.

“On the northern Gold Coast in suburbs like Upper Coomera, you can still find three and four bedroom homes for around $500-$600,000.”

Property experts say buyers hoping prices might fall from their current highs can expect to be disappointed.

However they say we are likely to see a significant cooling in the rate of increase from the 22 per cent rise recorded in the 12 months to July this year.

“Parts of the Gold Coast have seen examples of rampant price growth through the pandemic, but we expect things to calm down towards more modest capital growth levels as the Queensland state borders are reopened in 2022,” Doron Peleg, CEO of RiskWise Property Research said.

“Overall, it is likely that dwelling prices in a couple of years will be higher than the current prices.

“As a result, prospective buyers who are now waiting for price reductions will probably be disappointed.”

QBE, in its Australian Housing Outlook, predicted the median house price on the Gold Coast will rise to $915,000 in June 2024 – 19 per cent higher than the price of $815,000 recorded in June this year.

Phil White, CEO of QBE lenders’ mortgage insurance, said first time buyers remained active in the market despite the rapid price rises.

“Interest from first home buyers has remained strong, although intense competition and decreasing affordability continues to challenge their ability to enter the market,” he said.

Ms Megginson said house-hunters might need to be creative to get that first foot on the ladder.

“There are a number of government grants and discounts you could be eligible for, including the First Home Loan Deposit Scheme, which could enable you to buy with as little as a 5 per cent deposit.

“There’s also first home buyer grants and stamp duty discounts. These can be worth tens of thousands of dollars.”

The figures are the latest in a series highlighting the struggle faced by people on average wages in the Gold Coast’s increasingly tight property market.

The Bulletin earlier this month revealed that rental rates have soared by an average of 17.5 per cent in just one year across the Gold Coast – making renting in the city more expensive than Sydney.

Ray White chief economist Nerida Conisbee said the Gold Coast had a housing supply problem which had been exacerbated by migration from Melbourne and Sydney.

“It’s becoming more and more apparent that there is a housing shortage on the Gold Coast, and it’s coming through in not just in rising house prices and unit prices, but also in rents as well,” Ms Conisbee said.

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