_The Gold Coast, why invest?
1) Significant population growth
The Gold Coast LGA population has been significantly rising. Over the year ending June 2018, an increase in the estimated resident population was recorded at 2.6% to 606,800 persons. According to the Australian Bureau of Statistics (ABS), this is well above the overall Australian population growth of 1.6%, and overtook the rate of population growth in Melbourne (at 2.5%). When compared to the Australian capital cities, the Gold Coast LGA population is ranked the 6th largest, ahead of Canberra, Hobart and Darwin. According to Queensland Treasury projections, the Gold Coast LGA population is projected to grow annually by 2.1%, to 943,700 persons by 2041.
2) Downsizer demand
A demographic shift is occurring on the Gold Coast with compounding growth in the number of residents aged 65+ years. This age group represented 14% of the Gold Coast LGA population in 2011 (73,000) to stand at 91,400 residents in 2016; growing to a 16.4% share. By 2036, it has been projected by the ABS this group will grow to almost double (174,000 residents) and represent 20.2% of the population; overtaking the number of residents aged 30-45 years. The 65+ years cohort are fast becoming attune to the apartment lifestyle, enjoying the amenity, retail and transport within close proximity. The pressure on apartment supply in good locations will only ramp up with the upward trajectory in the ageing population.
3) Wealth flows
The total wealth of Australian High-Net-Worth individuals (HNWIs) continues to rise. The Gold Coast saw more than 1,000 net inflow of HNWIs in 2017; taking more than one-tenth of Australia’s 10,000 new HNWIs each year, according to New World Wealth. By definition, this is someone with net worth of US$1 million, excluding their primary residence.
4) Growth in international students
The number of international students enrolled to study in Queensland education facilities rose 9.1% in the year ending December 2018, according to the Department of Education and Training. Higher education facilities saw growth of 11.7%, while school-aged international students grew by 5.0%. The Gold Coast is fortunate to accommodate three world-class university campuses and numerous private schools accepting international students. The SSVF has made the process of applying for a student visa in Australia easier to navigate for both students and guardians.
5) Rise in international visitors
International departure capacity at the Gold Coast Airport expanded by 56.2% between 2012 and 2017 as reported by OAG Schedules Analyser. This is earmarked to grow further opening more routes to South-East Asia in the coming years. Tourism Australia calculated a growth in international visitors on the Gold Coast by 1.2% over the year ending December 2018, with a little over 1.05 million visitors.
6) Relative value to other major capital cities
Gold Coast LGA houses and apartments are relatively well placed for value on the East Coast. The median value for an apartment in March 2019 was $430,000 in the Gold Coast LGA, whilst Sydney was $696,900, and Melbourne $466,900 according to APM. This was similar for houses in the Gold Coast LGA with the median value being $620,000; significantly lower than Sydney ($1.03 million) and Melbourne ($809,500). Those now priced out of the these Australian East Coast cities have the watching the Gold Coast market.
7) Apartment capital value growth
The second strongest annual capital growth across all Australian capital cities was recorded for Gold Coast apartments, at a sustainable 1.4% in March 2019. This outperforms the annual national average which fell by 2.7%, although lags Hobart at 8.4% according to APM.
8) Rental yields rebounding
Gross rental apartment yields on the Gold Coast have gained 6 bps over the year ending March 2019, to stand at a median 5.86%, according to APM. This was significantly higher than the Australian average being 4.46% in comparison. Over this same time, Gold Coast apartment median rents moved from being $410 per week, to $430 per week, recording annual growth of 4.9%.
9) Low vacancy and less apartments being built
The Gold Coast experienced the lowest vacancy rate when compared to the four major cities, at 1.6% at the end of 2018. This was well below the Australian weighted average of 2.6% according to the REIA. The consistent strong population growth, coupled with limited new housing supply being constructed, has seen the vacancy rate trend below market equilibrium (of 3%) since December 2012 (REIQ). The under supplied Gold Coast market has averaged a vacancy rate of 1.9% since this time, pushing up median apartment rents 1.3%, on average, per quarter.
10) Global hotspot for second homes
Back in 2016, the Knight Frank Wealth Report identified residential hotspots likely to enjoy market out performance over the coming years, led by economic and employment growth, new infrastructure, regeneration, quality of education, environment and lifestyle. Gold Coast was recognised globally as a top second-home destination, with infrastructure investment with the G:Link light rail, Commonwealth Games facilities (held in 2018) and proposed airport expansion. Competitive prices, when compared with Australia’s top cities, plus strong fundamentals – local population growth and expanding tourism –will underpin demand along the 57-kilometre coastline.