What influences the value of real estate in Surfers Paradise? – Part 2
In our previous article, we talked about using real estate in Surfers Paradise as a vehicle for making profit. QBE's Australian Housing Outlook 2015 to 2018 had pegged house median price growth for the Gold Coast at 14 per cent over the four years to 2018. With this in mind, we also explored the different variables to watch out for that can shape conditions in the Surfers Paradise real estate market.
A point we covered in part one was how interest rates had a heavy sway over price growth. This is not just driven by the cash rate set by the Reserve Bank (which we touched on briefly), but also by other governmental measures. On November 20, for instance, major lenders such as Westpac raised their variable rates independent of cash rate movements in a direct response to pressures from the Australian Prudential Regulation Authority (APRA).
In order to keep the soaring price growth in several capital cities contained, the APRA introduced new capital requirements, as well as a ten per cent growth limit on new investment lending. This led to several other banks following suit, which has then since helped to ease demand and cool value increases.
If you want to form an investment strategy around property in Surfers Paradise, it can help to see what the big wigs in government are setting into motion, whether it's a grant for first home buyers or new loan-to-value ratio restrictions.
The effect that key infrastructure has on property is sometimes understated. However, living in real estate in Surfers Paradise, or anywhere for that matter, doesn't mean residing in a vacuum. There are realities that exist beyond the home that can make living in it more or less comfortable.
For instance, if the government is slow to build new roads or upgrade public transportation, it could result in terrible traffic congestion – something that will leave a bad taste in the mouth of tenants, even if your home is a delight to live in. The opposite is also true. An example would be the G:link light rail network which connects all the way from the Gold Coast Hospital to Broadbeach South. This has been a significant point of convenience for those living nearby, which will do great favours for local property values.
For housing values to rise steadily, there needs to be an accompanying expansion in population. When there are more residents, there is obviously a greater demand for housing. Again, the Economic Development Strategy 2023 plays a pivotal role in this.
As the city is poised for a great surge of foreign investment, it should bring many workers onto our shores. Upon spending time and experiencing the great lifestyle that the Gold Coast has to offer, there will be some who choose to migrate here, bringing their families along. Ideally, these seeds will take root and flourish into a new generation of Gold Coast residents.
That being said, an October 6 article by Clancy Yates from the Sydney Morning Herald says that since the decline of the mining boom, population growth has simmered out. Whether this wave of new developments on the Gold Coast will counteract this is something only time will tell.
Buying up in Surfers Paradise
Fortunately, real estate in Surfers Paradise bears many great attributes that set it up for investment growth. For instance, the suburb is located a stone's throw away from the G:link network, meaning that it has access to the best public transportation the city has to offer.
Convinced and want to buy in? Give Ray White Surfers Paradise a ring and we'll show you the spread of options available.