Gold coast property market in trouble

[grossreal]

hi all
I think the gold coast and bris will go west but not until 1st half of next year.
this is due to correction in the market but its not a normal correction I believe that if the brakes are thrown on the development areas becuse of issues witht he fundes not the developer then the blood will flow.
a few little lenders have hit the wall the bigger boys have frozen if they hit the wall and I think a couple will then the 30 and 50 storey building will have a major heart attack
and the breaks will be applied and then it will really hurt
I did one this week and walked away as it was just to hard to solve.
if and when these funders hit the wall the legals cause heaps of problems and its a blood bath.
for me its like watching one of those slow motion sci fi movies and in this case its a very slow rolling truck about to hit a wall and watching as the front end crumbles up.
and this truck for me is going to hit those 30 nd 0 floor building with such forces that everyone is going to hear it.
and I think also the breaks will hit the other market perth
can't hit sydney as we are not building
can't stop something thats not started.
I hope I am wrong but to tell you the truth blind freddy can see this truck.
so will be very much fun and for whats its worth even overeas they think ths truck is going to hit and they are looking at the market from off shore so it not rocket science.
good look

 

[Bluegoose]

Boomtown - Lol, great coment.

Not sure why I am wating my energy with this post but people that think GC, SC or brisbane property will fall 30-40-50% are seriously physco or on drugs.

A 4 or 5% drop is no big deal considering the 15-20% gain in 2007. As someone pointed out the ASX dropped 6% today alone.

Anyway, while the hopers and dreamers are waiting for these massive price drops, first home buyers and astute investors will be buying on weakness and achieving some good yields. I intend to be one of them.

 

[pricey]

I have a waterfront house in hollywell. As far as I know there properties have had about a 10% drop. Actually I have mine up for sale now.

My neighbour and I were up there last weekend and there are some BARGAINS at the moment in places like isle of capri where the owners have to liquidate fast. I was stunned at the price drops.

 

[urchin]

Boomtown - Lol, great coment.

Not sure why I am wating my energy with this post but people that think GC, SC or brisbane property will fall 30-40-50% are seriously physco or on drugs.

A 4 or 5% drop is no big deal considering the 15-20% gain in 2007. As someone pointed out the ASX dropped 6% today alone.

Anyway, while the hopers and dreamers are waiting for these massive price drops, first home buyers and astute investors will be buying on weakness and achieving some good yields. I intend to be one of them.

im a bit confused.

because the share market is in the crapper property prices are secure? (because they havent fallen as much.... yet.)

because property prices jumped up 15-20% in *one year* (your figures) there is little chance of a correction?

i would think the opposite. i would argue: 1. there is no separation between the "real economy" and the "financial economy", so if one tanks the other is more or less certain to follow. 2. unrealistic run-ups are invariably followed by even greater drops. since there is no fundamental, realistic reason as to why housing prices in any one region should jump by 20% in a single year (!!!) it seems premature to write off an equal or greater movement in the opposite direction.

i do intend to buy on weakness, but a 5% drop after such enormous gains and in the face of such enormous carnage on the share markets doesn't constitute weakness for me yet. not by a long shot.

 

[troyhunt]

Just to bring some balance, this from PropertyReview.com.au:

FOREIGN residential property buyers have continued to buy up in Queensland, snapping 1,495 properties in the FY08 totalling $621 million, according to Colliers International.

Colliers’ Gold Coast research manager Lynda Campbell who has monitored transactions annually since 1990/91, said this is the largest foreign investment figure ever recorded.

“This period’s findings have exceeded the previous high by $120 million, which was during the 1997/98 financial year when it stood at $501 million,”

Of the purchases made in FY08, $383.5 million or 63% were for investment purposes and the remaining $237.2 million or 37% were owner occupiers.

Colliers’ Gold Coast director of project marketing Brinton Keath said the attraction to QLD is due to stamp duty rates which are lower than most of Australia’s other states and territories and is calculated using a sliding scale.

Colliers found United Kingdom remained the most active buyers -- accounting for 17% of sales with a combined spend of almost $106.4 million. This was followed closely by New Zealanders who represented 13% of sales or $83.9 million.

The other top spenders were Singapore ($51.1 million), China ($50.9 million), South Africa ($42.7 million), Russian Federation ($41.5 million), Korea ($28.6 million), United States ($26.4 million), Japan ($23.5 million) and Malaysia ($22.1 million).

Other foreigners, from 60 different countries, ploughed $143.4 million into Queensland’s property market.

The Gold Coast also continues to be the most sought after, representing 48% of the $620.8 million spent in QLD with 525 transactions totaling $297.3 million – an increase of $28.1 million over the previous year. The region has been the number one local authority since 1991.

Surprisingly, Singaporeans emerged as the biggest spenders on the GC splashing out $43.2 million, followed by the Russian Federation with $41.4 million and Kiwis with $33.6 million.

Campbell said whilst Russians have fallen from the number one mantle this year they still spent more this period, with just $35.2 million invested in the 2006/07 financial year and $41.4 million during 2007/08.

Keath said the GC was a favoured destination for foreigners with year round sunshine and with two international airports – Brisbane and the Gold Coast – making it easily accessible both domestically and internationally.

Brisbane came in second as the preferred local authority capturing $117.6 million of the total spend, followed by the Sunshine Coast with $54.2 million.

Other local authorities in the top 10 were Cairns ($32.3 million), Moreton Bay ($28.8 million), Logan ($14.3 million), Gladstone ($9.8 million), Ipswich ($9.8 million), Townsville ($8.4 million) and Redland ($7.9 million). 26 other local authorities accounted for $40.2 million in sales.

PropertyReview.com.au

 

[sash]

It is possilbe....but it will happen over a couple of years.

This is exactly what happened in Western Sydney....people who paid 450k at the peak of the boom....are now holding houses worth 300-330k.

But look at that in perspective....that houses in Brisbane which used to sell for 120k in 2001.....are now worth 380k. So even after a 20% drop it is still worth 300k. Still a 250% gain....over the ast 7 years!

I personally think this is less likely for the under 300k stock than the over 350k stock.

Time will tell.....

Boomtown - Lol, great coment.

Not sure why I am wating my energy with this post but people that think GC, SC or brisbane property will fall 30-40-50% are seriously physco or on drugs.

A 4 or 5% drop is no big deal considering the 15-20% gain in 2007. As someone pointed out the ASX dropped 6% today alone.

Anyway, while the hopers and dreamers are waiting for these massive price drops, first home buyers and astute investors will be buying on weakness and achieving some good yields. I intend to be one of them.

 

[Rolf Latham]

hi Sash

I think I agree in context with what u are saying

On perspective, the number quoted above suggest a 450 k with a 65 % redn would be 157 000, so while there is softening and in some cases STRONG reductions in prices, like in the sw of Sydney ( 350 to 270) numbers like 60 to 70 % price redns are just plain silly.

Is such a redn possible ? Yes of course, but then that potential for world melt down for various reasons has always been there since the late 40s, we are just "a bit" more aware of it now.

ta
rolf

 

[sash]

Rolf,

If we get 65%...price reductions....I will be buying till the cows coming home!

Can't see this scenario....though I can see the 500K Comerra properties on the GC hitting the 380k mark....about a 24% price reduction. I has just started...they are already down about 12%....maybe another 10% over the next year or so.

hi Sash

I think I agree in context with what u are saying

On perspective, the number quoted above suggest a 450 k with a 65 % redn would be 157 000, so while there is softening and in some cases STRONG reductions in prices, like in the sw of Sydney ( 350 to 270) numbers like 60 to 70 % price redns are just plain silly.

Is such a redn possible ? Yes of course, but then that potential for world melt down for various reasons has always been there since the late 40s, we are just "a bit" more aware of it now.

ta
rolf

 

[willair]

It is possilbe....but it will happen over a couple of years.

This is exactly what happened in Western Sydney....people who paid 450k at the peak of the boom....are now holding houses worth 300-330k.

Depends on where you want to live Western Sydney or the sunny Gold Coast,but then again it always starts on the Gold Coast and ends in WA.
willair.

 

[kaf]

Why is it that the media is labeled as evil when they report negative news like this and given utmost credibility when the news is positive.

I've never got my head around this phenomenon.

Evand - I'm not critizising the credibility (or lack of it), it's that lack of even-handed reporting that I find annoying. Share market drops get front page with words such as "bloodbath", "plunging", "wealth wiped out" etc. while the recovery the next day will be somewhere in the business pages talking very calmly about a recovery and that prices went up again. There is no soaring in value, only ever soaring in cost / debt etc. The article we discussed in the beginning of the thread talked about the GC market in a spiralling downturn - wait for it - because of a 4.4% quarterly drop. Has the market ever been reported as spiralling upwards??

It's the language and the perceived need to whip everyone into a frenzy and milk the negative side of the volatility in the market to sell news that is annoying. I know I could just stop looking at it which I try but hey, this is a place to vent so I have!

Down from the soap box now.

I wish you all a nice horizontal day without any soaring or plunging (well the share market just soared 4% on opening )

kaf

 

[evand]

Kaf

I know what your saying but during the great Australian property price boom of 2000-2003 the media was full of frenzied headlines. So it does go both ways.

It was in the papers, on television..everywhere.

"PROPERTY BOOM OF THE CENTURY!"

"GET ON BOARD OR MISS OUT FOREVER"

"SYDNEY PRICES GOING THROUGH THE ROOF"...

It went on and on. It was all over the media. Not to mention every spruiker and seminar presenter milking it fo all it was worth.

 

[gman65]

^^^ snap

The article we discussed in the beginning of the thread talked about the GC market in a spiralling downturn - wait for it - because of a 4.4% quarterly drop. Has the market ever been reported as spiralling upwards??

I clearly remember reading articles such as "SEQ property values boom", "Coast Properties Soar", "House prices soar" in the papers, and talk over the latest record price reached in an area for Brisbane or the Gold Coast. People have somewhat short memories, as these were the headlines 12-18-24 months ago.

Now they are turning around and probably overstating the down side, but that's the media for you! Doesn't matter what the headline is, as long as it grabs attention.

 

[asdf]

I am expecting house prices in the Noosa Heads and Sunshine areas to fall by 60-70%. The cheaper areas will fare much better.

Wow! Please tap on the shoulder cos we were just up there and have my eyes on a $2M palace with uninterrupted ocean views, architect designed, premium finishes, infinity pool which I can't wait to get my hands on for $750k. Somehow... not in my lifetime...

 

[troyhunt]

Commentary on price drops in cities also tend to be grossly generalised. The Gold Coast is no different to many other regions in that it comprises of many sub-markets, some of which are suffering and some of which continue to do well. I've just refinanced on a house in Southport and the val came back 43% higher than in 2003 so even if we have had some short term drops, I've very happy with the longer term performance history.

 

[sash]

$1.5m...you are in with a chance.......but $750k....you are dreaming!!

Wow! Please tap on the shoulder cos we were just up there and have my eyes on a $2M palace with uninterrupted ocean views, architect designed, premium finishes, infinity pool which I can't wait to get my hands on for $750k. Somehow... not in my lifetime...

 

[asdf]

$1.5m...you are in with a chance.......but $750k....you are dreaming!!

My point exactly!

 

[yieldmatters]

Not sure why I am wating my energy with this post but people that think GC, SC or brisbane property will fall 30-40-50% are seriously physco or on drugs.

I normally counter the "couldn't possibly drop that much" argument with the fact that it "just went up that much".

A 4 or 5% drop is no big deal considering the 15-20% gain in 2007. As someone pointed out the ASX dropped 6% today alone.

But I didn't have to - you pointed it out all by yourself. 15-20% upwards in a single year is completely logical but 30 to 50% drop completely "insane - physco - on drugs". Why can't it move both ways?

 

[Pushka]

I normally counter the "couldn't possibly drop that much" argument with the fact that it "just went up that much".

True, but if people paid that much, they are only going to sell if they absolutely have to.

 

[tubs]

The media's job is supposed to report what's happening in an unbiased fashion.

The reality is, the media's job is to sell more newspapers or TV advertising time.

So whoever is the most sensational wins.

Take a look at the fairfax (The Age, SMH, Brisbane Times, WA Today I think) publications for the most viewed story. Whenever one is published on property it goes straight to #1.

That's why there is so much sensational property reporting.

I think the stories tell you more about the media industry, not the property market.

After all, how big a reaction do the make to the auction clearance rates after an interest rate cut, rise or economic crisis. And that's just on the results of one weekend alone. Anything to sell another newspaper...

 

[DadOfSam]

I read in yesterday's Sun Herald (Sydney) that on domain that there's as many properties listed for Gold Coast as for Sydney - and GC has 60% of the population! Bargains galore for many months to come it seems.

Speaking of which: did anyone go to the mass auction last Friday at 11am at the Surfers Paradise Marriott Resort & Spa by any chance? 40 or more properties up for sale under the one roof, but not on a Sunday like the usual Ray White sponsored "Auction Spectaculars".