28/08/2024
Cracks Emerging in the Gold Coast Real Estate Market?
Since the onset of the COVID-19 pandemic, the Gold Coast real estate market has consistently outperformed most major cities in Australia. However, in the face of continuous rate hikes and a growing affordability crisis, new trends are suggesting a potential downturn in the market.
Over the past 18 months, a persistently low supply relative to demand has supported rising housing values despite high interest rates, escalating living costs, worsening affordability, and deep-seated consumer pessimism. Affordability challenges are becoming more acute, with housing values consistently outpacing income growth. Currently, there is a 9.7% gap between housing value growth and income growth. Additionally, the percentage of income needed to support a mortgage on the Gold Coast is significantly above the national average, with residents needing 61.3% of their income to support a mortgage compared to 48.9% nationwide.
An ongoing imbalance between supply and demand has also contributed to these trends. The number of advertised properties on the Gold Coast has consistently been below the national average, sometimes falling as much as 20% below, indicating a shortage of properties available for purchase. Despite the rising trend in property values, there has also been a decline in turnover, with the Gold Coast now sitting 7.3% below the decade average nationwide. The scarcity of advertised inventory helps explain the low turnover amid rising values.
So, what does this mean for the market's future?
Despite the short supply levels, the median time on the market has risen significantly this year due to affordability struggles. Typically, spring sees an increase in advertised stock on the market, but given the current affordability challenges, cost-of-living pressures, and rate hikes, buyer activity is expected to remain low. This likely means that although there has been a steady increase in prices, supply may soon outpace demand, creating further pressure on the selling market. This could result in longer selling times and potentially impact selling prices.
Should you sell or hold off?
The Gold Coast market remains strong, and despite the projected influences, now could still be an excellent time to sell. With the market conditions still favourable, you can expect great results this spring. However, as the market is constantly evolving, it’s more important than ever to select the right agent or agency to represent your property. Choosing an accomplished agency with a proven track record in changing markets can make all the difference. Agencies with a larger footprint and extensive network are likely to have greater success in finding the right buyer for your home. While the market is unpredictable, with the right guidance and strategic approach, you can maximize your outcome and make a confident decision moving forward.
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