It’s been a decade since we saw this kind of demand (and undersupply) for Gold Coast homes. Does that mean it’s a good time to build new, or not?
South East Qld has been breaking records for its outrageous property boom over the past few months. Vacancy rates are at historic lows, and prices in some suburbs have increased by 17%.
It seems like that could spell disaster for new home builders, or make it a volatile time to buy. However, the major damage is to existing homes in the ‘middle ring’ – leaving new home builders with a few aces up their sleeve.
Price hikes due to Covid-19
When we look at why property prices are booming, we can see a new post-Covid-19 lifestyle emerging, and how it may positively affect the future of property on the Gold Coast.
A high proportion of demand is coming from interstate migration; cashed-up buyers looking for a coastal lifestyle, since they can now work from home or because they’ve finally returned home after pandemic travel bans were put in place last year.
We’ve emerged from 2020 with a new culture around enjoying life, slowing down, and having a better work/life balance. Which, in essence, is everything the Gold Coast stands for, and why it’s attracting so much buyer attention.
Thus, the overarching bonus to the property demand ‘problem’ is the boost to the Gold Coast economy and overall strengthening of the property market. That’s good news for new home builds, but not such a bonus for buyers of existing properties.
Gold Coast Mayor unlocking new land
The ‘middle ring’ around the Gold Coast’s CBD is the hardest hit by buyer demand, due to location, of course, but amplified by the sheer lack of sellers. Newer suburbs, on the other hand, aren’t held back by supply issues in quite the same way.
According to Mayor Tom Tate, potentially more land will be released in the northern suburbs of the Gold Coast to give new home builders even more wiggle room. The extra supply and lower demand for outer-suburb new builds may keep prices far more stable than the middle ring market.
And of course, living ‘outer-suburb’ on the Gold Coast still means beaches, hinterland and Brisbane city on your doorstep. As the Gold Coast continues it’s northern and western sprawl, it won’t be long before new estates become hot property too.
Rates and grants keep it affordable
Another good reason to build new right now is the record-low interest rates and government grants still on offer.
Low interest rates: the RBA’s last meeting on March 2 resulted in no change to the current all-time-low interest rate of 0.1%. While we can’t easily predict what’s coming as the world emerges from a pandemic, it’s still the best time – literally in history – to secure a home loan.
Government grants: the Qld Government First Home Owners’ grant is still on the table, offering a one-off $15,000 cash boost to first time homeowners. The $15,000 HomeBuilder grant is available for new-build contracts signed before March 31st, 2021, after being extended for three months. You could also be eligible for Stamp Duty Concession as well as the First Home Loan Deposit Scheme, which can save thousands on Lenders Mortgage Insurance and has been opened up for a 2021 intake of applicants.
All up, the savings in grants can add up to tens of thousands saved on your first home, as well as tiny mortgage repayments, allowing you to get ahead on your mortgage faster.
Avoiding the demand on existing properties
All told, it’s an opportune time for buyers to choose building new and avoiding the excessive demand on existing properties on the Gold Coast right now.
Home builders are getting low interest rates, excellent building incentives, more supply and – best of all – the choice to build the home you want, rather than taking what you can get from a skint and overzealous market.