The one defining theme has been [the Gold Coast's] extraordinary rate of growth
The Gold Coast already has all the hallmarks of an international city, including a casino, international airport, global sporting events, major universities, as well as a few national business head offices.
“Typically, cities take time to grow and mature, and usually what we see is they come to a ‘tipping point’ before they take off. Ten years ago, this was Brisbane, where it had just started its evolution from ‘small country town’ to what it is today: a vibrant city, with a lively cultural scene. The Gold Coast is at that same tipping point now,” said Ironfish Director, Property & Research, Grant Ryan.
Whilst Salt argues that historically, the government has had little to do with the Gold Coast’s growth up till now, this is now changing. The city is seeing significant investment from both public and private sectors into its development as a major city.
The light rail was an infrastructure project that has exceeded expectations in terms of resident take up, and eventually will run directly from the airport into the city.
The international airport is getting further upgrades to allow it to receive larger aircraft sizes – further increasing its international accessibility.
From an arts and culture perspective, the Gold Coast Home of the Arts (HOTA) precinct is undergoing major expansion, with a new outdoor area, and pedestrian ‘Green Bridge’ through to Surfers Paradise via the upmarket Chevron Island. The bridge will form part of a new dynamic ‘art walk’.
The Gold Coast economy is also now more diverse, shifting from being heavily reliant on tourism and construction to focus on knowledge-based industries including health and education, as well as advanced manufacturing and information communications technology.
The health sector plays a major role in the economy with the ongoing development of the $5+ billion Gold Coast Health and Knowledge Precinct. The 200-hectare precinct currently employs 10,000 people and is home to 20,000 students. Once fully developed, the precinct will support 26,000 jobs and contribute $2.9 billion to the economy annually.
Over the next five years, the economy is expected to generate an additional 36,100 jobs, with the biggest contributor being the health care and social assistance industry.
With population growth surging, economy and jobs growth strong, it is perhaps unsurprising that the Gold Coast property market is now one of the top performers across the country.
According to data from Corelogic, over the last 12 months, house prices in Surfers Paradise, in the Gold Coast, achieved 19% growth – the second highest growth in the nation, topped only by unit price growth in the affluent suburb of Toorak in Melbourne.
“When house prices start moving, it’s the first sign of a market heating up with unit price growth typically following,” said Mr Ryan.
“The key consideration however, is which type of unit. Ironfish is a strong supporter in lower density housing on the Gold Coast as a point of difference to the traditional super-high rise towers the Gold Coast is famous for. Boutique developments are in lower supply and more sought after by owner-occupiers. We believe they will deliver stronger capital growth for investors.”
Peninsular Residences, an Ironfish recommended property, which we introduced to our investors last year, is a key example.
Construction of this boutique 9-storey apartment building, with 60 apartments (compared to Q1 tower, for example which has 78 floors and hundreds of apartments) was recently completed, and since launching the rental marketing campaign has generated over 400 enquiries from prospective tenants.
“We were expecting strong rental demand, but the level of inquiry which has been received since we opened has been well beyond our expectations,” said Ben Crossan, Acquisitions Manager of Marquee Development Partners, developer of Peninsular Residences.
“These apartments have been well designed to suit the local market and showcase the expansive views of the river, ocean, hinterland and city. We have been able to achieve an affordable price point while maintaining a very high standard of finish. There has been consistent positive feedback from the market with respect to our amenity, views, affordability and obvious quality throughout the development. Compared to the predominantly older style apartments which are on offer in the market, Peninsular Residences has been the preference for white collar professional tenants, health workers and even retirees, who want to live in a stylish, contemporary home, which is close to everything and is designed for liveability.”
Last year, Ironfish recommended to our investors: ‘Stanhill,’ located in upmarket Chevron Island in Surfers Paradise. The development is now completely sold out, even though construction hasn’t yet finished.
“There is a clear, growing demand for premium, contemporary properties for local residents, be they down-sizers, professionals or families,” Mr Ryan said.
“With that in mind, we are excited to introduce to our investors a new boutique offering, which enjoys an absolute waterfront setting, in one of the most premium areas of Surfers Paradise, at a price-point that is still highly affordable.”