Gold Coast Sales Market Booms, As The Rental Stress Continues To Rise Across The Entire Country!
A simple social media tile that we posted last week demonstrates the current strength of the property market here on the Gold Coast.
The social media tile stated that over the past five weeks, Ray White Robina had placed 23 Robina properties under contract which equates to approx one in three sales in the suburb of Robina over that time period.
For full transparency, the breakdown of the 23 sales were 12 houses and 11 units.
This is certainly a large enough sample size to give us the most up-to-date data in the suburb of Robina and the insights from these sales shows that prices in Robina are rising sharply.
This also seems to be the sentiment from sales that our office and other officers are recording right across the Gold Coast but for the time being, let's focus on Robina and look at our own office numbers.
Firstly, please keep in mind that it was published last month on both realestate.com.au and RP Data that the average price for Robina homes over the March 2023 - February 2024 period was $ 1,087,500.
If we were to drill down on just four bedroom homes, then the official average price in Robina over the same timeframe was $1,237,500.
Using our own data, over the past five weeks from February 1st to March 5th our average sales price for a house was recorded at $1,435,000. The median price of our 12 sales was $1,350,000.
It was also revealed that the average price for a unit over the same time period in Robina was $717,500.
Over the past five weeks our average sale price for a unit in Robina was $840,000. Our median sale price was in fact higher than the average with the median sale price coming in at $ 860,000 for the 11 Robina unit sales sold over the past five weeks..
Whilst we must emphasise that these are just our sales, the reality is we have seen many incredible prices over this five week window with new records broken, and then broken again from our agency as well as other agencies in the area.
The numbers all provide strong evidence that prices are currently rising sharply fuelled by cashed up buyers who have incredibly few choices due to low stock levels.
The fact that we have had a whopping 1338 buyer inspections through our Robina open for inspections alone over this time suggests that we have potentially another 1315 active Robina buyers still searching for their next purchase following our 23 Robina suburb sales over this time.
It will be interesting to see the actual price increases when government statistics become available for the January to March quarter.
Many property observers tend to forget that there is a long delay in receiving accurate information due to the time lag from a property going under contract to then settling - sometimes many months later.
The one thing we can advise potential sellers of with a high degree of certainty is that right now the buyer pool is incredibly healthy and we are officially in a very, very strong buyers market.
One must ask the question - Has there ever been a better time to sell ?
Whilst the sales market is booming, the rental stress that continues to rise across the Gold Coast and the entire country also continues to grow.
A report released by the Australian Financial Review this week with the headline "Soaring rents put 800,000 tenants at risk of being displaced" discusses the urgency of the situation.
The sad fact illustrated in this article was that the Gold Coast currently has 33,982 households at risk of being displaced.
The full article from the AFR is our lead story this week.
We have also attached the latest CoreLogic National Housing market report for the month of March which once again shows that property price rises are accelerating.
There is no doubt that the growing gulf between the so-called haves and the have nots is widening by the day as house prices and rents rise and cost of living pressures also grow.
We start this week with the AFR article below
Soaring rents put 800,000 tenants at risk of being displaced
More than 800,000 renting households across the country could be priced out of their current suburbs, displaced by wealthier tenants who are themselves moving into more affordable areas as rents soar to new highs, new data shows.
Analysis by Kent Lardner, director of Suburbtrends also finds that those in the lowest socio-economic groups, represented by over 150,000 households – are bearing the heaviest burden.
“The mounting pressure from the relentless increases in rents are prompting wealthier households to seek out cheaper rental homes, crowding out those in the lower socio-economic ladder,” he said.
“The intense competition for a limited pool of rental properties and a dire shortage of affordable housing options mean this problem will ripple out to the poorest suburbs, leaving those in the lowest socio-economic households under the most strain over the medium to long term.”
Data from CoreLogic shows rents hit a fresh record last month, jumping by 8.5 per cent to $614 nationwide. Sydney climbed by 9.4 per cent to $751, Melbourne rose by 10.8 per cent to $574.
Using a 30 per cent income-to-rent ratio as a benchmark for housing affordability, the data shows that households allocating more than this portion of their income to rent are being systematically edged out to more affordable areas, according to Mr Lardner.
“This displacement pattern, spreading from one suburb to the next, marginalises those unable to keep pace in the competitive rental market,” he said.
This was evident by the higher vacancy rates in the more affluent suburbs at 1.8 per cent, compared to just 1.3 per cent in the poorer areas.
Inner Melbourne has the highest number of households at risk of being displaced nationwide at 47,980, followed by the Gold Coast at 33,982, according to Suburb trends data.
Nearly 28,000 renters in inner-city Sydney and its inner south face the prospect of being pushed further out, while an estimated 25,000 renters in south east Melbourne are under pressure. In Parramatta, an estimated 24,000 tenants are at risk of displacement, while Brisbane’s inner city has more than 21,000.
A separate study by the Australian Centre for Housing Research at University of Adelaide found that wealthier tenants such as rentvestors are becoming a significant force in the rental market.
The report titled Our Housing Australia found that rentvestors now account for around 10 percent of the renting population in Australia. This equates to around 300,000 rentvestor households, which roughly matches the number of households classified as social renters.
Rentvestors, who are typically first-time buyers, rent a home to live in while owning an investment property.
Emma Baker, professor of Housing Research at the University of Adelaide and co-author of the report, said the rise of rentvestors has the effect of crowding out lower income renters as rental supply dwindled.
“I think rental cost is being pressured by wealthier people that wouldn’t normally be renting, but now opting to rent,” she said.
“The effect of having a bigger population who are renting for at least some time has added some extra pressure to rental affordability. This means the lower end of the rental sector are suffering quite a lot, so the pressure is being pushed down.
“Those renters would have been in social housing 30 years ago, but are now in the private rental sector competing for tenancies with people who are relatively well cashed-up and probably in it for the long haul as well.”
Chris Leishman, professor of Housing Economics at the University of South Australia and co-author of the report, said some wealthier renters were also likely to be people who were priced out of homeownership and have to save for a deposit longer.
“They tend to be at the higher end of income distribution, so they can outbid lower-income renters. So in many ways, low income households face those conditions caused by higher income households,” he said.
“I think that’s why in the end, the rental sector is like a sorting system. So people who can’t enter homeownership but have more resources would rent and outbid lower and moderate income households.”
Tim Lawless, CoreLogic research director, said more families could be pushed out further afield and away from employment opportunities.
“That’s the unfortunate reality of a rental market that’s as tight as what it is at the moment and with rental affordability pressures becoming quite challenging, I think we will see further restructuring of demand and see the number of higher income households rise in rental markets.”
Click here to view the CoreLogic National Housing Market update for March 2024
https://www.youtube.com/watch?v=ez4cjzELWO8