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The Power of Supply and Demand on the Gold Coast and What It Means to Property Buyers - the Good and the Bad!
More people moving north? You better believe it.
With more than 1,600 people moving to Queensland every week, you can easily see why the prices are being pushed skyward.
Population wise, Brisbane and Gold Coast are the two fastest growing areas in Australia.
According to Matusik, one of Australia's leading property researchers, Sydney is now the 7th most expensive city in the world to live.
Australia has 6 of it's capital cities in the top 25 Most Expensive Cities in the world to live.
Fortunately the Gold Coast is not one of these 6 - which could be argued why so many people still flock to this most desirable area.
But what about affordability?
5 years ago, 83% (61,000 sales) of the homes sold across Queensland could be afforded by the typical Queensland household.
The Gold Coast Bulletin reported on Monday August 6 2007, that the median price for a home on the Gold Coast is now just over $507,000.
Although this is making life harder for first home buyers and lower income earners to acquire property - it is an incredible opportunity for high income earners and property owners to use their equity and continue on a property building portfolio - and with the next 10 years shaping up the way it is - the time is now!
To combat this affordability challenge - Neo has partnered with a finance firm that has access to limited boutique funding from various firms.
Your choices of finance are now a lot larger and much more versatile than most people realize.
Ask us to put you in contact with these people.
They will not necessarily see everyone because they are not mainstream finance like typical brokers or banks - although they can access your regular loans, they also specialize and choose to deal with select people - we can arrange a meeting for you - just ask!
According to Sustainable Population Australia, they predict a need for a further 116,000 dwellings over the next 20 years on the Gold Coast alone.
The Queensland government has a pro-growth agenda to accommodate over one million more people over the next 20 years.
Whilst this may have significant infrastructure challenges (especially water) - you could also come to the conclusion there might be some huge investment opportunities in real estate.
With such strong demand, high purchasing costs will likely mean more rentals.
And strong rental market often indicates good capital growth.
Matusik also recently reported a 25% rise in investment activity. And owner occupier demand went up by 19%.
Long term rents are rising by 10% to 12%. Residential prices are currently rising by 7% to 10% per annum.
But what about supply? Is there enough property to house the coming herd?
With an anticipated supply of 38,700 and an underlying demand of 42,900, this leaves a shortfall of minus 4,200 properties. The market is under-supplied by more than 10%.
2+2=5 (Now that's a good return)
With people needing accommodation, real estates urgently needing properties to rent, a shortfall of property - is it any wonder people are having few difficulties in getting good rental returns.
How about 1st home buyers and their effect on the supply and demand?
Mortgage Choice recently surveyed the soon-to-be first homebuyers across Australia and found that 61% will buy the 'traditional' way (with their marital or romantic partner), but fully 30% will buy on their own.
A trend that is increasing - possibly to combat divorce trends but who knows.
Because of this trend, there are more people aiming to buy less property.
The demand is strengthened again.
What does all this mean?
It means you should pick up the phone - get pre-approved and then call us to get the inside scoop on where to find the best investment properties to suit your property goals.
Stock is limited and real estate themselves are feeling the pinch.
The bigger real estate companies feel greater pressure because they need to sell more properties in order to stay afloat.
This can lead to all sorts of issues if you are looking to buy or sell.
Smaller boutique firms like Neo Property that specialize in prestige homes are perfectly positioned to continue on a client centered approach without the desperation of mere number transactions. Good agencies with quality databases of up-market investors, executives and home buyers will be the best to deal with during these interesting times of strong demand and short supply.