Real Estate investment in Australia: Brisbane and Gold Coast property markets expand residential and commercial properties
The two Australian cities offer alternative sub-tropics solutions to accommodate the ever-growing population and demand for luxury property
Brisbane and the Gold Coast’s Central Business Districts (CBDs) are less than an hour’s drive apart. Add the Sunshine Coast as far as Noosa Heads, plus Toowoomba in the hinterland, and suddenly a sprawling metropolis of 3.3 million has evolved.
The latter two are expanding ever — outwards and upwards. Greater Brisbane, by contrast, is filling in the gaps between its city hubs. Not only is residential and commercial property far more affordable here, whole new designer suburbs can still be built with easy access to the River City or to the City by the Sea and their two busy international airports.
Singapore developer Robin Loh bought 20 square kilometres of grazing land behind upmarket Broadbeach on the Gold Coast in the 1980s. His concept was a master planned suburb called Robina. Today, this is home to over 30,000 people. Facilities include the massive Robina Town Centre, the Gold Coast’s premier Robina Stadium, Bond University, golf courses and inter-city and light rail systems. Gold Coast Airport is 20 minutes away, Brisbane Airport an hour.
More recently, China’s richest man, Wanda’s Wang Jianglin, weighed in with an AUD 970 million (approx. USD 723 million) luxury highrise hotel and apartment development in Surfers Paradise called Jewel. Other heavyweight Gold Coast investors include Hong Kong billionaire Tony Fung, Jack Luo’s Beijing-based Tandellen Group, and CCCC International, which has acquired Australian construction company John Holland. Different times, different strategies perhaps.
National newspaper The Australian, quoting latest 2015 figures, says “Chinese buyers have splurged nearly AUD 1 billion (approx. USD 746 million) on Queensland properties, more than double the previous year”.
Brisbane and the Gold Coast were prime targets, and analyst Michael Matusik said buyers focused on new apartments sold off the plan in major projects. They also bought rural properties and land. Queensland was the only state in Australia to record land purchases by foreigners, indicating interest in big commercial properties and agriculture.
Chinese investors accounted for AUD 383 million (approx. USD 286 million) of the AUD 1 billion (approx. USD 746 million) spent by foreign buyers in Brisbane itself, and they outlaid AUD 373 million (approx. USD 278 million) on the Gold Coast, which was two thirds of the foreign total. Singapore leapfrogged the U.S.A. as the second-biggest source of foreign funds in real estate, at AUD 421 million (approx. USD 314 million), which was nearly three times more than the year before.
“I’ve not seen buying like this in 25 years in the industry”, said Matusik. “There is a steeply increasing number of Chinese players. Some of it is flight capital, and some is the expectation of living here one day in the future”.
A balmy sub-tropical climate adds to the allure. Sydney and Melbourne can suffer from cold winter weather and bushfires in summer, whereas outdoor swimming is possible year-round in Queensland. Gold Coast, near the New South Wales border, is at 28 degrees South, similar to the area between Fuzhou and Hangzhou, at 28 degrees North on the China Coast. However, it gets warmer as one continues north in “the Sunshine State”.
The 2018 Commonwealth Games on the Gold Coast, where 700,000 visitors are expected, has boosted investment, fanned also by a relatively low Australian dollar,which has fallen more than 30% against the American dollar in the last five years. The Real Estate Institute of Queensland put the median price of a home on the Gold Coast at AUD 557,000 (approx. USD 415,000), just over half the cost of an abode in Sydney.
Foreign money flows are still pouring into Sydney and Melbourne real estate however, and the Foreign Investment Review Board’s latest 2015-2016 report says that despite the best efforts of banks and regulators to “stem the flood”, Australian property markets don’t seem to be showing signs of slowing yet.
“Tighter lending conditions may see the markets ease”, says an ANZ Bank economist, “but don’t hold your breath. We have yet to see any hard evidence of this happening”. New South Wales recently introduced a 4% stamp duty surcharge and 0.75% land tax surcharge on foreign buyers. Victoria increased its stamp duty for foreigners from 3% to 7%, while Queensland introduced 3% stamp duty. Maximum loan values have been lowered, and mortgage assessments are more stringent.
Yet, UBS economists warn that the greater risk could be a further crackdown on money transfers out of China. Noting the arrest of 450 suspected underground bank operators this year, UBS quotes a South China Morning Post story saying Chinese mainlanders can change up to USD 50,000 in foreign currencies per year, “fuelling demand for ways to skirt the limits as some investors, fearing a falling yuan, seek to stash capital in overseas markets”.
“Interest rates are at historic low levels”, counters formerly Singapore-based Richard Bean of Austprops, a buyers’ representative. “This alone ensures continued growth. The recent sale of a Gold Coast beachfront home for AUD 25 million (approx. USD 18.6 million) has sparked that market, and prices have firmed for river and canal homes at over AUD 5 million (approx. USD 3.73 million) if they have good aspects and views”.
ON THE MARKET
1020 EDGECLIFF DRIVE,
This five-bedroom residence in a famous Gold Coast gated resort is located on a rare double allotment that has a 55.7 ft. water frontage with private jetty, and an equally impressive street frontage. The property features a huge master suite, fabulous terrace entertainment areas, an expansive open-plan kitchen and a lap pool.
PRICE: AUD 5.5 million (approx. USD 4.12 million), CONTACT: LJ Hooker Surfers Paradise www.surfersparadise.ljhooker.com.au
37 MACQUARIE STREET TENERIFFE, BRISBANE
The Catalina homes of Macquarie Street are widely regarded as some of Brisbane’s most exclusive real estate. This four-bedroom riverfront residence on the Teneriffe Peninsula is located two kilometres from the Brisbane CBD. A perfect inner city sanctuary, it has stunning river views and a three-car garage.
PRICE: AUD 5.37 million (approx. USD 4 million), CONTACT: Ray White New Farm www.rwnf.com.au
This article was first published under Special Reports in Palace 18.