_Focus on | 10 reasons to invest on the Gold Coast
Significant Population Growth
The Gold Coast LGA population has been significantly rising. Over the year ending June 2017, an increase in the estimated resident population was recorded at 2.7% to 592,350 persons. According to the Australian Bureau of Statistics (ABS), this is well above the overall Australian population growth of 1.6% and on par with the rate of population growth in Melbourne. When compared to the Australian capital cities, the Gold Coast LGA population is ranked the 6th largest, ahead of Canberra, Hobart and Darwin. According to Queensland Treasury projections, the Gold Coast LGA population is projected to grow annually by 2.2%, to 866,650 persons by 2036.
Downsizer Demand
A demographic shift is occurring on the Gold Coast with compounding growth in the number of residents aged 65+ years. This age group represented 14% of the Gold Coast LGA population in 2011 (73,000) to stand at 91,400 residents in 2016; growing to a 16.4% share. By 2036, it has been projected by the ABS this group will grow to almost double (174,000 residents) and represent 20.2% of the population; overtaking the number of residents aged 30-45 years. The 65+ years cohort are fast becoming attune to the apartment lifestyle, enjoying the amenity, retail and transport within close proximity. The pressure on apartment supply in good locations will only ramp up with the upward trajectory in the ageing population.
Wealth Flows
The total wealth of Australian High-Net-Worth individuals (HNWIs) continues to rise. The Gold Coast saw more than 1,000 net inflow of HNWIs in 2017; taking more than one-tenth of Australia’s 10,000 new HNWIs each year, according to New World Wealth. By definition, this is someone with net worth of US$1 million, excluding their primary residence. Australia remains the top country ranked by HNWI net inflow for the third consecutive year.
Growth in International Students
The number of international students enrolled to study in Queensland education facilities rose 9.6%, in the year ending June 2018, according to the Department of Education and Training. Higher education facilities saw growth of 9.8%, while international school-aged students grew 7.5%. The Gold Coast is fortunate to accommodate three world-class university campuses and numerous private schools accepting international students. The SSVF has made the process of applying for a student visa in Australia easier to navigate for both students and guardians.
Rise in International Visitors
International departure capacity at the Gold Coast Airport expanded by 56.2% between 2012 and 2017 as reported by OAG Schedules Analyser. This is earmarked to grow further opening more routes to South-East Asia in the coming years. Tourism Australia calculated a growth in international visitors on the Gold Coast by 3.8% over the year ending March 2018, with a little over 1.1 million visitors.
Relative Value to Other Major Capital Cities
Gold Coast LGA houses and apartments are relatively well-placed for value across the major Australian capital cities. The median value for an apartment in June 2018 was $427,000 on the Gold Coast, whilst Sydney was $737,000 and Melbourne $496,000 according to APM. This was similar for houses on the Gold Coast with the median value being $625,000; significantly lower than Sydney ($1.14m) and Melbourne ($882,000). The Gold Coast is firmly back on the radar for those now priced out of the these cities.
Apartment Capital Value Growth
The strongest annual capital growth was recorded for Gold Coast apartments across the six major cities, at a sustainable 1.7%, in June 2018. This exceeds the annual national average of –2.2% and is on par with Perth (APM). The Gold Coast LGA is currently trending below the five year annual average recorded at 3.6%, although capital growth has picked up to record 14 quarters of consecutive growth, an equivalent to an average of 1.0% each quarter.
Rental Yields Rebounding
Gross rental yields on the Gold Coast have gained strength of 10bps over the two years ending June 2018, to stand at 5.80% for apartments, bucking the national downward trajectory (APM). Over this same time, Gold Coast median rents moved from being $390 to $430 per week, total growth of 10.3%.
Low Vacancy and Less Apartments Being Built
The Gold Coast experienced one of the lowest vacancy rates in the country at 2% in June 2018, well-below the Australian weighted average of 2.5% (REIA). The consistent population growth coupled with limited new housing supply being constructed has seen the vacancy rate trend below market equilibrium (of 3%) since December 2012 (REIQ). The under supplied Gold Coast market has averaged a vacancy rate of 1.9% since this time, pushing up median apartment rents 1.3%, on average, per quarter.
Global Hotspot for Second Homes
The Knight Frank Wealth Report 2016 identified residential hotspots likely to enjoy market out performance over the coming years, led by economic and employment growth, new infrastructure, regeneration, quality of education, environment and lifestyle. Gold Coast was recognised globally as a top second-home destination, with infrastructure investment with the G:Link light rail, Commonwealth Games facilities (held in 2018) and proposed airport expansion. Competitive prices, when compared with Australia’s top cities, plus strong fundamentals – local population growth and expanding tourism –will underpin demand along the 57-kilometre coastline.