Gold Coast property bubble burst, but still bottoming out: Tim Lawless
The Gold Coast property market is one of a number of “lifestyle markets” that has been in a bubble that has now burst, according to RP Data’s residential research director Tim Lawless.
“I think there are some areas in Australia that have been in a bubble, and we’ve seen those bubble burst – look at the Gold Coast, or Cairns or a lot of the lifestyle markets around Australia,” Lawless said in a video interview with the Finance New Network.
“We have seen fairly dramatic falls in property values. Even some of the premium segments around the capital city markets. Look at the North Shore of Sydney or the Northern Beaches of Sydney as a pretty good example,” he added.
The most recent RP Data figures for December 2012 record a -0.8% fall over the year for Gold Coast/Brisbane property values.
The prevalent unit market though remains weak, with a 2.3% slump recorded in December and a 4.2% slump in values over the year to a median value of $352,000.Sales activity continues to slump in the Gold Coast new unit market with just 19 high-rise sales recorded over the November quarter, a 70% plunge from sales figure a year ago, according to the Midwood Report - all but three in the troubled, heavily-discounted Surfers Paradise Hilton development.
House prices on the Gold Coast have been more resilient, down just 0.8% for the year with RP Data recording a median value of $417,000
Figures compiled by RP Data show that Gold Coast recorded a slump in property values of 15.3% from the property peak in June 2009 to the end of July 2012, though this decline has started to moderate.
Lawless noted in October last year that the combined Gold Coast/Brisbane market has started to consolidate with values falling by 12.9% over the past two years.
Lawless told the Gold Coast Bulletin in August that the Gold Coast had recorded one of the biggest falls of any region and still had about six months to go until it bottomed out.
His talk of a bubble bursting on the Gold Coast may dishearten some investors and vendors with hopes of a better year in 2013, but they pale in comparison to a high-ranking Queensland public servant who compared the Gold Coast property market to herpes.
Speaking at a breakfast at the Urban Development Institute of Australia's Brisbane last month, David Eades, deputy director-general at deputy premier Jeff Seeney's office and a former Knight Frank valuer, joked:
‘What's the difference between herpes and the Gold Coast property market?
‘You can fix herpes’.
The joke outraged some of those who attended the breakfast prompting a letter sent to premier Campbell Newman and deputy premier Seeney by Gold Coast mayor Tom Tate.
Eades has since apologised for the remarks saying he maintains a “strong and positive attitude towards the Gold Coast as he always has”.
The joke was made in the context of Eades questioning whether the Gold Coast had the manpower to build the infrastructure required for the 2018 Commonwealth Games.
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The current policy solves a short-term problem by creating jobs in the building sector, but in the long run it is likely to place young first home buyers under financial pressure.