Over the past year, median home prices in the area have increased by double digits. Vacancy rates are below 1%, while the total number of monthly postings fell by 7.3%. As a result, investors can currently expect average rental yields of 3-4%.
The findings come from the new Market Pressure Review Report for the Gold Coast from InvestorKit, which looked at eight Statistical Area Level 3 (SA3) regions.
These SA3 regions include Broadbeach – Burleigh, Coolangatta, Robina, Surfers Paradise, Southport, Gold Coast – North, and – .
InvestorKit analyzed key market pressure indicators to show how sale and rental prices, inventory levels and other variables changed between August 2020 and 2021 and also looked at the 10-year housing market trend.
The Gold Coast has seen a demand-driven property boom over the past 12 months, with monthly sales volumes up 39.9% and total monthly listings down 7.3%. Vacancy rates are at an all time low with most areas having rates below 1%.
Arjun Paliwal, Research Director and founder of InvestorKit, explained: “The significant shortage of inventory on the Gold Coast is driving up property prices, as buyers in Sydney and Melbourne consider a sea change and lifestyle change during the pandemic and others are advancing their retirement plans.”
Mr Paliwal further pointed out that although Surfers Paradise and Broadbeach – Burleigh are at the start of the game, having reached the $1 million price tag a few years ago, other areas like Coolangatta, which remain at a price reasonable, are not far behind.
As things stand, Broadbeach – Burleigh posted the highest median property price increase on the Gold Coast at 38.2%.
The researcher predicted that “market pressure in the region will see property 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 enrollment will increase.
Data from the research revealed that median house prices in the Gold Coast fared significantly better than units over a 10-year period from 2012 to 2021. Houses in Broadbeach-Burleigh saw a growth rate of 53% due to a volume increase of 131 percent, and Coolangatta at 102% or an 86% growth rate. These figures are far from the unit prices of the zone.
As Mr Paliwal weighed in on the rental property market, he said rental price data shows that the rental market is under comparable market pressure to the sale market, and investors will see rental yields decline as home values increase.
Given this scenario, InvestorKit’s head of research pointed out that “for those who own properties in the more popular seaside areas of Broadbeach – Burleigh, Surfers Paradise and Coolangatta expect average returns of 3%, while those in growth markets such as Robina, Nerang and Southport may demand returns above 4%.
Mr. Paliwal explained that rising rents, low interest rates and the affordability of these areas relative to the major city coastal markets, “yields are well placed in the current environment.”
Here is an overview of the real estate market data in the eight SA3 regions of the Gold Coast region included in the report:
Broadbeach – Burleigh had the strongest annual growth on the Gold Coast in the 12 months to August 2021, with a 38.2% increase in house prices and a 15.7% increase in unit prices. The average days on market for sales fell 39.4% for homes and 25.4% for units, indicating that the real estate market is still strong. Pressure from the rental market has resulted in a significant increase in median rents over the past year, up 15.6% for houses and 13.3% for units.
Median home prices in Coolangatta were up 21% in the year to August, while unit prices rose 16.9%. The pressure on the rental market has also translated into a significant increase in median rents, which are up 10.4% for houses and 10% for units year-on-year. For homes and units in Coolangatta, which are relatively well positioned in the current low rate environment, investors can expect an average rental yield of over 3.5%.
Gold Coast – North
In the 12 months to August 2021, median home prices in Gold Coast – North increased by 11.2%, while unit prices only increased by 5.6%. Over the past year, the average number of monthly listings has decreased for homes to 21.1% and 11.3% for units. This figure has been falling for 15 months, indicating a dynamic rental market. The vacancy rate has fallen well below 1%.
Median house prices in Nerang increased by 18.1%, while unit prices increased by 13.1%. Pressure from the area’s rental market has resulted in a continued rise in median rents, with homes up 10% and units up 4.7%. It is expected that house rentals with yields above 4% will be possible, while unit rental yields could reach over 5%.
Having experienced a 13.7% increase in median property prices, Ormeau – Oxenford recorded one of the lowest increases in value in the area. While overall capital growth remains strong, unit prices in the zone increased by only 4.3 percent. Increased rental demand in the area has resulted in a 6.5% increase in median house rents and 7.5% increase in median unit rents over the past year.
The median home price in Robina has increased 13.4% annually, while unit prices have increased 6.5% annually. Investors can expect a strong rental return of over 4% and a strong rental return of over 5% as pressure in the rental market increases. According to data from InvestorKit, yields are decreasing slightly due to the sharp increase in prices, while rents are continuously increasing.
Southport’s median home prices have risen over the past year, with house prices rising 14.1% and unit prices rising 8.9% year-over-year. Pressure from the rental market has resulted in a steady upward trend in median rents over the past year, with homes up 10.1% and units up 7.5% year-over-year. Investors can expect rental returns of over 4%.
Median home prices in Surfers Paradise have risen at some of the fastest rates on the Gold Coast, with homes jumping 18.9% and units up 13.5%. Monthly home sales increased 52%, while unit sales increased 72.7%. Surfers Paradise is a selling market under high pressure, as evidenced by rising prices, falling inventory and declining vendor discounts.