Gold Coast Offers Appeal and Affordability
Just when you thought affordability was becoming a word of the past, I’ve unearthed another hard to believe story on the Gold Coast, alongside further evidence of the appeal of the local market as local demographics continue to evolve.
Our Gold Coast Team have just launched a new residential project in the Heart of Robina, Cambridge Residences, located in the heart of Robina on the doorstep of the thriving $2.5billion Town Centre.
Robina is a classic and now very successful master-planned residential community that has gone from strength to strength over the last two decades. Perhaps best known as the home of the Bond University, Robina is now delivering the dream of the planners, it’s a thriving desirable community. Yes, it has access to great beaches and much more.
As a potential place to buy into the Queensland real estate market it offers a range of opportunities that will appeal to both future residents and investors alike. I also think that the development mix adds to the area’s appeal. The choices are dynamic and importantly aim to meet the needs of singles, families, retirees and students across a variety of prices. Variety is important with apartments, villas, townhouses and detached homes.
While the Robina Town Centre is the focus of the area, there’s a direct train link to Brisbane. While employment is diverse across the Bond University, Varsity Lakes IT hub and now a brand new football stadium will also create economic momentum.
Robina’s history doesn’t extend much past the late 1980s, which makes the rate and scale of development impressive as it has matured into a business, medical, commercial and residential centre. Robina has certainly proved to be centrepiece of Gold Coast development and with a strong future.
A Value Driven Opportunity
Having established Robina’s credentials, let’s get back to having a detailed look at one particular apartment project and some updated measures of the fundamentals of the area’s property market. First I think we need to concentrate on the value that the project offers.
Almost 70% of the 1, 2 and 3-bedroom apartments at Cambridge Residences are priced under $450,000. This figure represents a gross p/sqm rate of $3,500 to $4,500sqm and for anyone used to off-the-plan rates in Sydney, Melbourne or Brisbane, such figures must represent appealing value. Another key factor is the size of the apartments, and the size is impressive with 1-bedroom apartments at 70sqm to 80sqm and 2-bedrooms between 95sqm to 112sqm.
The first two towers, Newton and Blake, will contain a choice of 10 unique designs and for buyers features will include now popular open plan interior with generous balconies. Additional features are the natural timber flooring and detailed cabinetry with a choice of locally themed colour schemes.
For both owner-occupiers and investors however, the size of the apartments is important because it helps assure the long-term appeal of the project by comparison to a trend towards much smaller apartments, which is now such a trend in the major centres.
On top of this, the first stage of Cambridge Residences is at least 18 months from settlement representing a huge opportunity to take advantage of the predicted Gold Coast residential upswing in 2015/16. As I outlined here recently, the Gold Coast market is the only eastern seaboard market not to have seen fast-paced price growth over the last 12-18 months and I can’t imagine that these apartments will be available at today’s prices in 2017.
Demand is Evolving
Another key fact that anyone remote from the area might not be aware of is the fact that Cambridge Residences is being built to address a significant trend that is now emerging on the Gold Coast. Over the last 3 years, whilst Gold Coast high-rise projects have been in somewhat of a hiatus, developers have adapted and unearthed a significant demand for affordable mid-rise apartments adjacent to major shopping, health and infrastructure. This shift in demand is being driven by two key factors.
Firstly by demand from local 50+ residents who are now or soon will be empty nesters, and downsizing into a low maintenance lifestyle where they can walk to everything. It’s a trend that is very familiar, sometimes called ‘local-change’ or ageing in place, and while 50 is not exactly old these days, this shift in demand is a longer-term demographic trend that will impact almost every market.
Secondly, we have investors who are attracted to an area like Robina by low vacancy and solid rentals generated by the huge workforces in the area. Investors are also driven by a lack of affordable quality stock in other markets, this same group would also include lifestyle investors who might move to the area in 5-10 years time.
The Development Team
Cambridge Residences is a Joint Venture between SPG Investment Holding Limited & Shino Development Group.
SPG Investment has a proven and diverse 20-year track record for developing quality properties across the east and south coast areas of China, that include hotels, urban complexes, tourism real estate and large residential developments.
SPG Investment is the second largest shareholder of Greenland Hong Kong Holdings Limited, jointly developing, constructing and holding The Peninsula Shanghai with The Hong Kong and Shanghai Hotels Limited, names that would be familiar to many reading this post.
Other members of the development team include, Eastview a leading project management, construction management and building company and TVS Architects an award-winning team of architects, who have completed a wide range of local, national and international projects.
Some General Trends
There is evidence that sales activity is on the increase while building activity is still low, and prices and rents are also slow. However as mentioned earlier the demographics of the Gold Coast are changing and the retirement and downsize market will be key over the coming decade.
However the rental market will continue to be driven by younger people, as they take longer to enter the home ownership market. Thus the demand for affordable housing will remain driven by all of the factors.
Prices Remain Competitive
As median prices continue to rise, particularly in Sydney and Melbourne, the price for an average home on the Gold Coast now sits at around $500,000 with land at $238,000 a block and established apartments starting at around the $360,000 mark.
Rentals have been rising over the last 2 years but that trend is expected to slow somewhat in 2015, which may well be more of a reflection of the wider economy, although the vacancy rates are still expected to remain low.
Demand will in part be driven by continued employment growth with some 13,500 new jobs forecast over the next 12 months and according to government figures continued growth of around 11% beyond that. Currently the local unemployment rate is around 6%, and a sudden shift either up or down in this figure would impact rental demand.
The weekend election results, were although a big swing in public sentiment, not completely unexpected, and they mark the end of a turbulent 3 years for Queensland.
What is clear is that the electorate does not like rapid change one bit, and even if reform was seen as necessary, it appears this needs to be achieved in a more measured way, with less social and economic shock involved.
This will not be a message that is lost on the new Labor Government, and so for local real estate markets I would not expect any dramatic shifts as Australia’s 6th largest urban centre continues to grow and mature.