“This is definitely the time to buy,” Poke, a 44-year-old sales manager at World Gym in the Gold Coast suburb of Ashmore, said after the auction on Aug. 8 at which 16 properties were offered. “Interest rates are at an all-time low, it’s the bottom of the market and prices are on their way up.”
Buyers are finding bargains along Gold Coast’s 43-mile, high-rise-dominated resort strip, where home values have plunged as much as 50 percent in some parts since 2010 and the median price is a third below Sydney’s. Prices in the area known for its surfing beaches rose 0.8 percent in the 12 months through June, compared with 3.8 percent across Australia’s biggest cities, according to researcher RP Data.
“This has been a property crash in its truest sense, but we’ve been seeing some signals that the market is finally bottoming out,” said Louis Christopher, managing director of Sydney-based data firm SQM Research Pty. “But it’s early days.”
The Reserve Bank of Australia’s 2.25 percentage points ofinterest rate cuts since November 2011 pushed variable home-loan rates to the lowest since September 2009. The record-low 2.5 percent benchmark rate contributed to a 7 percent jump in home prices in the biggest cities in August since a May 2012 bottom, according to Brisbane-based RP Data.
Helping Gold Coast home prices is the city’s tourism-driven economy, which is recovering as a 16 percent drop in the Australian dollar between April and August encourages more people to vacation at home. The number of local visitors rose 10 percent in the year to March 31, according to Queensland state’s tourism agency.
Home prices could rise by as much as 10 percent in the next two years as demand increases, according to forecasts from Sydney-based researcher Australian Property Monitors and realtorsRay White Surfers Paradise and Crown Realty International.
Prices in Australia’s major cities are climbing, rising 7 percent in Sydney, 4.3 percent in Melbourne and 2.5 percent in Brisbane, the Queensland capital about 100 kilometers (62 miles) north of Gold Coast, in August from a year earlier, according to RP Data.
Housing affordability in Australia has improved over the past two years with the proportion of Australians’ income required to meet mortgage repayments at 28.7 percent, the lowest level in a decade, the Real Estate Institute of Australia said in a statement on its website yesterday.
Buyers from other parts of the country are drawn by the area’s cheaper prices, said John Newlands, Gold Coast spokesman for the Real Estate Institute of Queensland and principal at Professionals Newlands Real Estate.
“Earlier last year there was no one at open houses,” Newlands said. “Now we’re getting a bit more traction, with three to five groups showing up. And at auctions, we’re seeing multiple bidders, and even price duels,” particularly for lower-priced apartments, he said.