The fact we have very expensive property makes Australia very vulnerable to any sort of economic shock and the example I’m pointing to at the moment is what’s happening in the Gold Coast in Queensland where tourism numbers are down. It’s not macro economically significant for the entire country but what we’re seeing is quite acute distress in their property market because without the constant income growth they can’t sustain prices where they are.
According to property analysts RP Data, over the past decade there has been an average of 867 houses and 1087 units sold each month across the Gold Coast, but last December there were just 359 house sales and 396 unit sales – the lowest sales volumes over the past decade.
A LACK of new Gold Coast apartments for sale after 2012 is likely to see cashed-up foreign investors head to Brisbane and Sydney.There will be 1364 apartments for sale in new buildings between Surfers Paradise and the Tweed before the end of the year.But in 2012 the only new apartments added to the market will be 32 at Oracle in Broadbeach.There is nothing more locked in from 2013.Real Estate Institute of Queensland Gold Coast chairman John Newlands said one of the most significant impacts of the units shortage was that overseas interest could shift to places like Brisbane and NSW.“Foreign investors are required by law to buy new homes and units,” he said.“So if there is less for sale here, they will have to go elsewhere.”
“The first home owners grant does make it more attractive for first home buyers to buy property, but all it really does is simply increases demand to drive up the price of real estate by the amount of the grant. It is really nothing more than a Ponzi scheme.”