Gold coast property market in trouble

[stingray]

It's official, the Gold Coast property market is showing signs that it is in freefall. I have been tipping this for a while, like many other people. I believe that only one other major property market in Australia will do worse than the Gold coast.........and that is the highly speculative Sunshine Coast.
I am predicting drops of well over 50% for both these locations. Here is the link to the article:

http://www.goldcoast.com.au/article/2008/11/12/22241_gold-coast-news.html

Property price drop gathers pace
November 12th, 2008

GOLD Coast house prices continue to spiral downwards and the drop is gaining speed.

In the September quarter house prices plunged by 4.4 per cent, one of the biggest drops in the country, down from a median of $490,000 to $468,250, according to the latest research from Australian Property Monitors.

This is far worse than the June quarter figures just three months earlier, which had dropped 2.97 per cent, showing the property slump is gathering pace rather than slowing down.

It is a far cry from the property peak of December, 2007, when the median house price had soared to $500,000.


I am wondering what people think about the Gold Coast and Sunshine Coast markets. Does anyone think that there will not be major falls in these two regions ?

 

[sash]

Yep....it is tanking....also agree about SC....throw in Brissie also into the mix.

These markets went nuts over the last 6 years....now they will correct.

 

[kaf]

A plunge of 4.4 %, in freefall, well actually it's a bloodbath

I'm sorry but I'm getting very tired of the sensationalist language in the press, trying to whip people into a frenzy and fear... it's soo boring!! Oh and by the way the share market just dropped 5% today. This would have been a bloodbath a few weeks ago but people have got used to the volatility so the language has toned down in the press.

If you need to sell a house in this market you will be a trouble and yes there might be the odd occasion where properties sell for 10,20 or even 50% of their previous sales price. That's really bad news for the seller and I feel sorry for them.

For anyone that can hang on, the most likely scenario is a plateau in prices with a few ups and downs but a drop in interest rates, increasing rents and a better yield. Just the way the cycle goes.

Cheers

kaf

 

[coastymike]

Everyone keeps discussing increasing rents. We had these a few months ago and now that we are entering into difficult economic times when job losses will increase, spending will decrease and it will possibly be a prolonged "recession" (hate to use that term when officially it hasn't been announced) and yet rental prices will just keep going up and up.

Maybe I am living in a fantasy world where economic uncertainty means people downgrading homes and lifestyles increasing the amount of stock on the market, people trying to rent their luxury homes but unable to find renters who will pay $1,000 per week so they drop it to $800 per week and then it flows down to lower priced properties. It is happening on the North Shore and Hills District. I have heard it is also happening elsewhere.

I believe we have hit a ceiling in rental price increases for the next year or two. Anyway I'll revisit this post in a years time and see whether the average rental price has increased by the 10% being proposed by many.

 

[sash]

I think people paying over $500pw for units and $700pw for houses are pulling back.

You are correct...rents in the lower North Shore are slowing and some cases dropping.

Not seeing rents dropping in the lower end suburbs where rents are sub $300pw. They are still going up....

Maybe I am living in a fantasy world where economic uncertainty means people downgrading homes and lifestyles increasing the amount of stock on the market, people trying to rent their luxury homes but unable to find renters who will pay $1,000 per week so they drop it to $800 per week and then it flows down to lower priced properties. It is happening on the North Shore and Hills District. I have heard it is also happening elsewhere.

I believe we have hit a ceiling in rental price increases for the next year or two. Anyway I'll revisit this post in a years time and see whether the average rental price has increased by the 10% being proposed by many.

 

[Pushka]

A plunge of 4.4 %, in freefall, well actually it's a bloodbath

I'm sorry but I'm getting very tired of the sensationalist language in the press, trying to whip people into a frenzy and fear... it's soo boring!!

Yep, have to agree; the media is feeding on this and making things much worse. I dont think it is boring though, I think it is evil and totally unprofessional! (cant quite think of the word for it yet)

 

[stingray]

Pushka,
So you think it is evil what the media is doing. Well what are your thoughts on what the spruikers like John Edwards, Michael Matusik, Monique Wakelin, Terry Ryder, the RE institutes, the banking economists etc etc have been doing for the past 10 years ? They have been contributing to the bubble in a big way. And the bigger the bubble has become, the bigger the ultimate pain will be. I honestly never thought the bubble would inflate quite as much as it has. It frightens me to think what the consequences for Australia will be. I have my fingers crossed (for the least pain possible)!

 

[Rolf Latham]

yaaaaaaaaaaaaaaaaaaaaawn


Yes, some markets are soft on the Gold Coast but whats the point ????

The median at entry level if that makes sense has taken an even stronger kicking.

For the vast majority of people this is not a bad thing. If you are poorly structured or bad circumstances force u to sell in such a low volume market, thats a good thing for the next FHB.

ta
rolf

 

[gman65]

Of any of the markets, the Goldcoast has one of the largest vacancy rates (3.3% last I checked), and growing, as people leave for the other states as the construction industry dries up, interstate investors sell for more pressing matters. Rentals are available widely in nearly every suburb.

Places such as Upper Coomera, Pacific Pines, Arundel have literally hundreds of available properties, most priced above $400k. There are not all the FHB in the world to purchase all these properties.

It will be a long time until the Gold Coast stabilises.

 

[evand]

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.

 

[Stella]

The Gold Coast has been a strange market in the past - I have owned a property to around 9 yrs only to sell it for less than $20k more than I paid. Owned another for 1 yr & sold for $5k more than I paid. No I didnt pay too much & they were average houses at average prices....then 2001 came along riding on the back of high prices elsewhere - cashed up southerners paying cash for houses here & off they went where $100k growth in a year was happening. Prices in my area took off after after many years of low to moderate growth growth - and are now slowing again.

Cheers
Stella

 

[Pushka]

Pushka,
So you think it is evil what the media is doing. Well what are your thoughts on what the spruikers like John Edwards, Monique Wakelin, Terry Ryder, the RE institutes, the banking economists etc etc have been doing for the past 10 years ?

There is a fundamental difference - we know those parties you mentioned have a vested interest in whatever it is that they are spruiking (be it books, reports, products etc,) so people can ignore them if they choose. The media is our only outlet as to what is happening in the world; it is SUPPOSED to be independent, and 'in the old days' was the way in which FACTS are reported. Now the media seems to think they are the story, and not simply a vessel for reporting it. Big difference.

Evand, I cant remember the last time they posted a good news story

 

[yo yo ma]

I believe that only one other major property market in Australia will do worse than the Gold coast.........and that is the highly speculative Sunshine Coast.
I am predicting drops of well over 50% for both these locations.

Hi & welcome stingray

Thanks for the tip - I put my properties on the market tomorrow...
Actually, before I do, what do you base this on?

 

[sash]

LOL....LOL...LOL...LOL....now that is funny!!!

If you actually do that!....I have some Ocean Front property in Arizona for sale!

Hi & welcome stingray

Thanks for the tip - I put my properties on the market tomorrow...
Actually, before I do, what do you base this on?

 

[rambada]

Never been confident in Australian Property Monitors. When there numbers came out originally they were way off what was happening in the real world.
I have found Herron Todd White & Residex to be accurate.
Speaking to a valuer on the Gold Coast - my properties have fallen back to Xmas 2007 prices - didn't even know they'd gone up since then so what fall? My own PPOR in Tallebudgera has stayed the same.
Vacancy rates increasing - huh? Had 2 just turn over, got more rent, longer term & had 6 applications on 1 & 4 on the other - vacant for.....5 days while I tidyed it up.
Spoke to manageing agent & RE sales & they say enquiry is still good - however offers are silly & small volumes of sales are occuring.
Some say that the economic crisis will mean holiday letting will be at its worst this year - sensationalism yet again - people will travel & stay locally so I cant see huge holiday vacancy. Next year maybe because toursists will decrease & finished available units are increasing.
But - and this is the same in any area - buy with land content, duplex or house in a good logical location, under market, you will make money.
Crashing on the Gold Coast - my ar..e!!

 

[Ausprop]

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.

particulalry when lower house prices should be a desirable thing? if the price of a BMW halved we would be clapping our hands. Housing is just a consumer durable of a similar fashion

 

[stingray]

Yo Yo,
The Sunshine Caost is basically the most unafordable place in Australia for local's on local's wages to afford a home. It is even slightly more anaffordable than the Gold Coast and Sydney. Median household income on the Sunshine Coast is about $51,000, and that does not buy you anywhere near a median priced home. There are some smaller towns that are slightly moe expensive, think Mandurah WA, Byron Bay etc. But as far as major property markets go, the locals of the Sunshine Coast cannot afford to buy a home whre they live. I know the area (particularly the Noosa surrounds) quite well as I have close friends that live there and visit them regularly. 5 years ago I personally thought the real estate prices around Noosa could not possibly be sustained. I was wrong as the prices were sustained and even for another 4 years. I hear times have now changed and there is plenty of downward pressure. I am expecting house prices in the Noosa Heads and Sunshine areas to fall by 60-70%. The cheaper areas will fare much better.

 

[boomtown]

Im calling for Gold Coast prices to fall between 150% to 180%.

 

[yo yo ma]

I agree that it is expensive but I know a lot of people who work away (fly in / out) from the SC and live there for the lifestyle. When I get the (hourly) bus down to Brisbane airport, it is always reasonably full with lots of workers. I can't comment on the Noosa / Sunshine Beach areas as I haven't been up there in a while. My properties are all near the planned University Hospital and future railway link, plus the beach. I am happy with them (1-2 year leases in place) and will stick to the plan of holding for 20 years plus. Sure, there will be ups and downs in the cycle but I am happy to ride them out.

Thanks for your input.

 

[yo yo ma]

Sorry Sash, not going to sell now... Will have to put a hold on the Arazona property - maybe when I get some more equity?