After experiencing a rough ride after the Global Financial Crisis, property prices on the Gold Coast have started to rebound strongly. So what's driving this growth? Is the Gold Coast in a property bubble? What does it all mean for Gold Coast property investors?
A BOOMING ECONOMY ON THE GOLD COAST
One of the key factors behind any property boom is a strong economy, and it's no different on the Gold Coast. The coast has created 20,000 jobs in the last 4 years, and unemployment has dropped to 5.5%, below the state and national averages. This has been driven by a large injection of funds into a range of projects across the Gold Coast. While the 2018 Commonwealth Games is often cited as the cause of the economic boom, it in fact only makes up about one billion of the thirteen billion dollars that have been invested into the economy over the last 3 years. A further 11 billion dollars in projects planned after the games should continue to power the city and drive the growth of approx 30,000 new jobs over the next 5 years.
STRONG RENTAL GROWTH
The surging economy is translating into strong rental growth. The rent on a 3 bedroom house has increased by 17.5% over the last 4 years and by 50% over the last 10 years. By the end of the last boom, property prices had become too expensive relative to rents. However, the post-GFC price declines and the ongoing increases in rent have led to excellent yields of 5%+ for all types of property on the Gold Coast.
A SHORTAGE OF GOOD HOUSING
Good quality stock on the Gold Coast has become increasingly hard to find, which is leading to competition among buyers and price increases. Houses, townhouses and owner-occupier focused apartments in the right areas are in high demand but are low in supply. The high cost of renting is driving owner-occupiers into the market, who are fighting over properties with the right characteristics. This is a healthy marketplace driven by economic fundamentals and genuine demand.
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