Andrew Bell’s Market Update: Is The Gold Coast Prepared For The Commonwealth Games?

MARKET WRAP
Issue 14   |   July 6th, 2017  |  Is The Gold Coast Prepared For The Commonwealth Games?

HOW WILL LOCAL BUSINESSES BE IMPACTED?

As most would know, it is now only 9 months until the opening ceremony of the 2018 Commonwealth Games. The excitement just keeps building month on month and I was very pleased to be part of a panel recently, focusing on all the benefits that will be derived for the Gold Coast community, and especially the economy. This does mean a lot of forward planning for most businesses to capitalise in their space of operation and to ensure that some of the challenges around road transport etc. do not impede. The reality is that whatever those challenges over the two weeks might be, most businesses are already receiving significant benefits from the boost in our economy at present, and will receive significant benefits in the period after the Games conclude.

There are always speculations about how the city of the Gold Coast was going to embrace the Games. Sceptics always exist with the lack of facts, and so I was thrilled to see that over 1.2 million tickets were bid for at the close of the first phase of ticket sales. This response was well above expectations and was really clear evidence of the great enthusiasm that our city is building towards this biggest sporting event in our history. There will be billions of dollars in benefits flowing, not only now, but for years and years to come.

Infrastructure is always a really important stimulant for any economy. We have had some big investments in recent years, in areas such as our new hospital, Stage 1 of the light rail, and now of course Stage 2. A somewhat controversial one was the concept of a cruise terminal. Mayor Tom Tate went to the last council election with a very clear position that he would push for a cruise terminal base here on the Gold Coast, and stated that if he was re-elected it was a mandate to proceed. Well, he was indeed re-elected, and he continues with that ambition. The recent council meeting, with a vote of 10 in favour and 4 against, a motion was passed to devise a business case, to take to State Government, for a cruise terminal. The plan forecasts 65 ships visiting in the first year, building through to 212 a year on a regular basis. This is certainly an important step, and it is expected to be 18 months before this plan is delivered to State Government. It would be another significant infrastructure, boosting tourism and of course the flow on to employment and the Gold Coast economy.

HAS THE LIGHT RAIL INCREASED PROPERTY VALUES?

Now to that important research. It was done by Griffith University, together with the University of Queensland and the University of Sydney Business School. They analysed two decades of sales for Gold Coast residential properties within an easy walking distance of a train station. It is no surprise that they found values rose sharply across the board and that there was a sweet spot that truly got the greatest increase in value, and that was for properties within 100 – 400 metres of the station. These properties increased 30% more than those in the 400 – 800 metres distance from the station.

What was the biggest surprise was that the significant boost in values spiked in the early planning stages of the rail project, and not when most people would have thought once the project was built and up and running.

This already suggests that the jump in values have already occurred in the shoulders of Stage 2 that is currently under construction, but it also says that Stage 3, being the route from Broadbeach to Burleigh Heads, will have seen property values jump already in the knowledge that this stage is coming. Valuers need to keep aware of this because they may find difficulty understanding why people are paying more for properties along the shoulder of Stage 3. This research certainly shows the significant impact that transport routes, whether it is vehicular, rail or bus, have on property values.

Well I will be back with you in a fortnight’s time. Stay safe until then.

Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group

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