Hello all,
Just bought my first investment property at the Gold Coast (Arundel). I’m from Sydney and thus have had no physical contact with the Gold Coast market, hence I’ve bought soleley on statistical evidence of good growth in recent times.
Can anyone out there with a more intimate knowledge of the GC market share their thoughts on the state of the market??
Thanks
What sort of evidence have you got about Gold Coast?
Specify your purchase s the readers here can have a go at crunching numbers for you.Steve
I am not a GC expert but have been researching that market for a while with a view to entering it. It appears that there are very few IP’s to be had in the GC proper (not hinterland) that do not require a massive neg. gear and hence subsidisation each month. Price growth has been excellent in the past but this is true for almost every postcode in Aus. The one piece of info that is very notable about the GC market is that many investors do not get given real or accurate vacancy rates and the sales pitch is thus based on lower vacancy rates than actually eventuate. For blocks which focused on short term letting (tourism), management fees and ongoing expenses in relation to maintaining, cleaning, letting etc are all often understated before the sale. These factors make it extremely difficult to make these properties viable even aften depreciation and other tax deductions unless there is a capital gain of some reasonable magnitude. I would say that unless the property has some star quality such as absolute water frontage and/or is available at a great price then the capital growth possibilities are limited in the next 2-4 years. Over the longer term (which most investors are in for) there is very likely to be growth in the GC.Steve,
I have 2 IP in Labrador which is the suburb next to Arundel. I live in Canberra and have been going to the GC every year since 91 to go and see the Indycar race. We (my wife and I) decided to take the plunge 4 years a go and buy an IP. We bought another one in April this year. Both are located in the same street. To give you an indication of the growth of the GC even over the last four months read on.
We bought our first property for just under $60k in Dec-99. This was about 2 years after the Asian market crisis hit. It was also before the gains we see in market now. The second one we purchased for $135k in mid April 03. As I recently bought another IP in NSW (last week) we had to get valuations done on the properties. The first one was valued at $145k (very happy) and the second was valued at $165k (even more happy).
When I was there in Feb I read an article that noted Arundel as being the second fastest growth area on the GC. That part of the coast (North of Surfers Paradise) has great appeal because it is so close to the University, Major shopping centres, and about a 5 min drive to Helensvale to catch the train to Brisbane. It also only 5 mins to Surfers Paradise and Sea World and only about 10 mins to Movie-World, Dreamworld and Wet n Wild.
That’s my 2 bobs worth. I will be heading up there again at the end of October to see the race, uh I mean to check on my IP’s. I hope you get to enjoy your IP in Arundel. I think it is the best part of the coast but maybe I am biased.
Carl
Lawry,
Thanks very much for your insight.
I have been suspicious of Gold Coast realty agents and rightly so it appears! I am negatively geared (fairly heavily) but also in for the longer term.One good point about QLD real estate is it has the lowest establishment costs in Aus, rates are also very low comparitively.
If you are planning on buying at GC, choose wisely because capital growth varies greatly over a fairly small distance geographically speaking. ie. 12 mth gowth in Labrador to Mar 2003 was approx 25% whereas in Nerang was approx -10% !!
cheers
Carl,
Thanks very much for your reply, that’s exactly what I wanted to hear! I considered most of the features you mentioned about Arundel prior to purchasing, so I guess my research was accurate.
I agree its the best part of the Coast, and will be making a trip to “Inspect” sometime in january I reckon!
Enjoy the race and good luck with the Arundel IPs.
Steve
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