IT GOES against the apparent steady boom of the Gold Coast property market, but separate reports have named five Coast suburbs that buyers should steer clear of.
Four local areas have made the top 100 most-risky suburbs across Australia — Broadbeach, Surfers Paradise, Hope Island and Southport.
So what has landed some of the region’s most popular suburbs in the danger zone? According to research house RiskWise Property Review, there is a large number of units in the pipeline which are likely to lead to significant oversupply.
“Our research shows that 10,614 new units will be added to the Gold Coast property market over the next 24 months. This represents a small increase and is unlikely to have any significant impact on the market,” said RiskWise CEO Doron Peleg.
“However, Surfers Paradise and Broadbeach have a larger number of units in the
pipeline, and these areas carry a high level of risk.”
“Since many units in these areas are sold off-the-plan, potential buyers face three types of major risks being equity risk, cashflow risk and settlement risk.”
Broadbeach, with a median unit value of $510,000 has 1125 properties in the pipeline, with the percentage of existing stock sitting at 18.4 per cent, and a vacancy rate of 3.4 per cent.
Surfers Paradise, which has a median unit value of $394,000 has 2294 properties on the way.
However, Mr Peleg said the level of supply in other areas was expected to be absorbed by significant population growth forecast.
Ray White Surfers Paradise CEO Andrew Bell said current estimates on migration numbers to the Gold Coast indicate 5000 new dwellings would have to be build each year.
“On this basis, the forecast is we need about 40 per cent of all constructions to be for apartments, 23 per cent for small lot homes, 20 per cent for townhouses, 15 per cent for traditional detached housing and two per cent for retirement aged care,” Mr Bell said.
“The current construction wave that we are seeing is not only making up for the past years where we had under construction but also meeting current demand.”
Meanwhile, a separate report has named on northern corridor suburb as a ‘negative growth trap’.
Coomera witnessed a decline of 5.5 per cent in its housing market over the 12 months to November 2017, according to a property investment specialist.
Suburbanite founder and director Anna Porter produced the report using CoreLogic data, to determine 24 suburbs across Australia that investors should steer clear of.
It follows commentary from industry experts that buyers will flock to the northern corridor as a result of infrastructure investment like the Coomera Town Centre, that’s due for completion later this year.