The Gold Coast suburbs set for historically high capital growth

For more than 50 years, South East Queensland and in particular the Gold Coast have held the mantle of the fastest growing region within Australia.

That population growth came largely from young families and mostly non-professionals attracted by affordable real estate prices, and retirees attracted to the warmer weather and a more relaxing, casual lifestyle.

What drove the real estate market, which was notorious throughout that half century as a boom and bust market, was predominantly the huge buying and selling cycles of holidaymakers.

The Gold Coast has always been the favoured holiday destination of so many Australians, many of whom would buy a holiday apartment/house in the good times, which caused real estate prices to rise sharply. But when the economy went into any form of downturn or recession they would sell their holiday home, causing real estate prices to decline.

The Gold Coast was somewhat of a rollercoaster market.

The 2018 Commonwealth Games was a game changer for the Gold Coast, with more than $18 billion spent on infrastructure upgrades and improvements. The city was transformed.

Apart from light rail, the addition of many new sporting facilities, road improvements and the like, the city saw an $825 million refurbishment of Pacific Fair to make it one of the best shopping centres in the Southern Hemisphere.

The Star Casino spent $345 million on refurbishment and has since put hundreds of millions into building new residential towers. HOTA was built to add a huge cultural base to the city, and so on.

While the locals had a new degree of appreciation for the transformed city, it wasn’t until the pandemic of 2020 that it truly changed in so many ways.

With the Gold Coast being seen as one of the safest Covid-free areas of Australia, it became a flight location for many people from around Australia, particularly from Victoria and New South Wales.

What quickly happened was that those tens of thousands of people who came with the intention of a six or so month visit, fell in love with the city, and decided they wanted to move there permanently, as so many have done over the past four years.

Migration of wealth

What has now happened is not just the migration of households to the Gold Coast but the migration of incredible wealth.

The type of people moving to the Coast are not just young families attracted by the lower real estate prices or retirees trying to make their nest stretch a little further.

Many of Australia’s wealthiest people have brought their personal wealth and proceeds of the sales of their interstate real estate, and this huge demand has resulted in record real estate price growth.

What is currently happening is the snowballing effect.

Those who have moved here over the past four years have had family and friends visit frequently and as those groups of people have seen how much their family and friends have enjoyed the Gold Coast, and having experienced that for themselves, they also have decided to move.

This wealth is now not only permanently centred on the Gold Coast but will trigger, and is already triggering, further improvements and has encouraged the city of the Gold Coast to approve further expansion of the development of the region in ways that would otherwise not have been possible.

While it is no longer known for its cheap real estate prices, it most definitely is regarded as a city providing great value. Homebuyers and investors alike are now confident it has rid itself of the cycle of rises and falls in property values, as a result of this migration of wealth underpinning the city’s real estate values.

While no longer regarded as a location for cheap real estate, it is regarded as one of the safest parts of Australia in which to buy real estate.

Further expansion, capital growth likely

While the city can expand a little further, it is very close to getting to full capacity and as such the scarcity of available properties will continue to see property values increase off the back of greater demand for real estate than the supply.

Gold Coast is also one of the parts of Australia where there is the greatest shortage of rental accommodation.

A harsh reality for renters is a likely source of comfort for investors who will not only enjoy excellent capital gain on their properties, but some of the best rental yields in the country.

Certain pockets still provide incredible buying opportunities for investors in, for example, Southport (officially named as the CBD of the Gold Coast).

This is the area in which not only is there the base of Government and semi-Government departments but also so much of the diverse education sector.

Southport is where the prominent medical facilities are, including the Gold Coast University Hospital, which means there is an incredible demand for rental accommodation.

Southport, once regarded as a sleepy hollow, is now in great demand and an ideal location for investors to buy.

Other suburbs that have not yet seen the same significant growth in property values but will do so moving forward include Robina, Carrara and Labrador. These are shoulder suburbs to areas that have already seen phenomenal price growth and that price growth will, and is already, rolling into adjoining suburbs.

With the housing shortage set to be a feature of Australian real estate for the next decade, there will be areas that standout because of their huge population migrations.

These suburbs will continue to be the greatest beneficiaries of the price growth in real estate and rental values over the next decade.