Issue 28 | Thursday, December 17th 2020 | Gold Coast Property Market Is Merry & Bright!
Hi, Andrew Bell here with my last report this side of Christmas.
We are all getting tired of hearing how this year has been full of so many surprises, but undoubtedly the strength of the real estate market was high on that list.
No question the fundamental driver is what it has always been, and that is this balance between supply and demand. The supply has been affected in two ways. There are less properties on the market for sale and that is partly because of a catch-22 situation where many homeowners would sell their properties, but they cannot find anything else to buy. It is where availability of second-hand stock is as low as it has ever been in 32-years and until more properties come on the market for sale, existing owners will not have something to buy in order to sell their own properties. The other part is that new dwelling construction has fallen. It fell 1.9% in the September quarter and specifically in apartment buildings it dropped 6.2%. The latest quarterly construction numbers show that we are running at around 6-year lows in construction which means buyers in the marketplace have less choice of brand-new properties forcing more buyers into the second-hand market.
In my 31-year experience as the largest real estate agency on the Gold Coast, I can safely say this is the least amount of property ever on the market and available for sale.
Yet on the other side of the coin we see that real estate in general has been boosted by a significant rise in consumer confidence that is on a 10-year high. It surged for the past 4 consecutive months and in September / October alone there was an 18% increase.
The confidence in the market has come about from a degree of relief that things haven’t turned out as bad as first forecast, but also because of an enormous amount of Government and other stimulation of our economy through lower interest rates, an increase to the first home buyers grant, and so on.
We are also seeing this repositioning of various markets within Australia and we are all now aware that COVID-19 has awakened people to the fact that they don’t necessarily have to be glued to an office desk and can actually work remotely. This has created a greater sense of freedom. No question people have been concerned about future pandemics and others have concerns about the cost of living in big cities, and they have all now realised that they can live elsewhere and still maintain their jobs. This has seen a surge of buying activity all through regional areas of Australia, but none greater than the interest in the Gold Coast.
To give you some concept of the size of the surge in real estate activity, Ray White generally writes somewhere between the high $4 billion per month range to the early $5 billion per month range. Anything with a ‘5’ in front of it is a very strong month, yet last month Ray White, the largest real estate company in the country, wrote $6.6 billion in sales. That is 20% higher than previous good months.
What will be significant for a market like the Gold Coast is how long this surge of interstate migration will be with us. We can only house so many people, we can only fit so many into our existing education system, we can only provide so many jobs, and so there is no surprise to see an article in the media saying that the Gold Coast is facing a housing crisis and that we need to get a wriggle on and approve a lot more development work to cater for this growth.
There is significant pressure for Council to mend the City Plan which will allow for some greater higher density development. The Urban Development Institute of Australia said that cost of homes would dramatically increase unless moves were made to allow for more development. The Gold Coast is well placed at present in the national market. An undersupply and stronger than usual demand. The only thing we have to keep an eye on is how some of the other fundamentals that also drive the real estate market will travel in 2021 in areas such as international population growth, unemployment, housing affordability, and of course the overall state of the economy.
For now, we are the ‘go to’ market and the days of boom and busts are long behind us as we have now become a very established and solid real estate market in Australia.
We are very excited to welcome over 100+ properties to The Event 2021 program. We are so pleased to be able to offer this large group of properties to the marketplace at a time when they are in so much demand. Our first home opens start on Saturday, 2 January 2021 but we invite any enquiries prior to that day, and we will do all we can to assist you. There is truly some amazing real estate no matter what you are looking for or where you are looking, so don’t miss out on being one of the first to inspect your property of choice should you be buying.
In the meantime, on behalf of the 200+ Ray White Surfers Paradise Group team, I sincerely offer our thanks to all the wonderful support and encouragement we have received throughout the year and from all of us we extend our very best wishes for a wonderful Christmas. We in Australia have so much to be thankful for and part of that thanks is to appreciate one another more than we have ever before and support one another in our journey going forward.
Andrew Bell, OAM
Chief Executive Officer
The Ray White Surfers Paradise Group