Migration, lower interest rates could ignite Gold Coast property market
With the Gold Coast continuing to attract international and interstate migrants prices are set to soar in 2024, but which suburbs are best positioned to deliver home buyers and property investors the strongest capital growth and returns?
When looking at 2024 for the Gold Coast region, which continues to be one of the standout markets of Australia, we expect interest rates to have a minimal impact on the market.
With interest rates having risen sharply over a 20-month period to December 2023, the latest data is certainly suggesting that interest rates should have peaked.
An additional 0.25 per cent rise cannot be ruled out but most forecasters are now expecting to see interest rates drop somewhere from the middle of 2024 onwards.
This week’s inflation data showed inflation had slowed from 4.9 per cent over the year to October to 4.3 per cent over the year to November, the slowest annual rate of price rises since January 2022.
With the inflation genie returning to the bottle, the RBA’s motivation to lift rates is diminishing.
Being at the peak of the market and so close to the expected drops in interest rates will change the strategy not only of borrowers, who are currently under financial pressure at present, but also bankers. They are less likely to pressure any borrowers into a forced sale while they retain good equity in their properties.
Removing the interest rate factor means the underlying conditions that will drive the real estate market in 2024 will continue to shift the balance between supply and demand towards the latter.
Like many parts of Australia, demand on the Gold Coast continues to be strong, driven by high levels of immigration that has been at record levels.
While forecast to temper this year, the influx of new Australians remains high.
Population growth for the Gold Coast is not only driven by overseas immigration but very, very strong interstate migration. This demand remains at high levels.
Regretfully, the much talked about increase in stock levels continues to be all talk and no action and there are no indications on the horizon that stock levels will increase over the next two years.
Prices can be expected to continue increasing throughout 2024.
Prices had been forecast to drop in 2023 but the latest figures have shown that they actually rose by 8.1 per cent.
The reality for most parts of Australia is that the undersupply through the lack of construction of new homes has been brewing for years and was exacerbated throughout the pandemic.
Now the rapid rise in building costs has made it even more difficult to provide affordable housing to the great majority of Australians in need.
Further fuel was added to the fire in November when first home buyers in Queensland became eligible for an additional $15,000 after the state government doubled its First Home Owner Grant.
Relatively affordable property hotspots
The large proportion of properties being built are in higher price brackets and as such are not providing the much-needed affordable housing to which the great majority of Australians aspire.
On the Gold Coast, this means buyers need to look at markets they may have not otherwise considered to try and seek out more affordable homes.
Our recommendation is that they look for suburbs near areas that have seen strong price growth in recent years, and where the surrounding suburbs have not yet received anywhere near that same growth.
There is a cascading effect that tends to happen that sees the adjoining areas pick up price growth at a slightly later stage.
All are seeing increased interest by owner occupiers and investors.
They are in areas where there is very strong tenant demand, meaning great rental yields in these shoulder suburbs are complementing significant capital growth.
Australia’s largest in-room auction, and a key bellwether of how the Australian property market might play out in the year ahead, will take place on the Gold Coast on 28 January.