The Gold Coast’s quarterly median house price has taken its first hit since September 2014 and experts say lending restrictions on investors are partly to blame.
Meanwhile the Sunshine Coast has emerged resilient, displaying the best quarterly growth in south east Queensland.
Median prices on Queensland’s southern beaches dropped 1.7 per cent to $605,000 – still up 6.1 per cent year on year, continuing to outpace the state capital.
Comparatively, the Sunshine Coast appears to be following a similar trend and closing the gap with the Gold Coast: now at a median of $580,000, 2.2 per cent up on the quarter and 5.5 per cent year on year.
Domain Group chief economist Andrew Wilson said the out-of-character slump on the Gold Coast could be because of a tightening of APRA lending requirements for investors, leading to the almost instant ratcheting up of costs on interest only loans.
“Gold Coast has been more of a destination for investors recently and I think we’ll see a roll back in rates of investment,” he said. “It’s not a blue sky type of market, it does have its barriers.
“I think it’s still a market that’s got some fences around it, typical for investors.”
Mortgage Choice Ormeau principal Delise Taylor agreed with Dr Wilson. Related: Rents and yields fall in BrisbaneRelated: Brisbane house prices go backward againRelated: Inside Paddington’s new Norfolk Estate
“[The Gold Coast] is highly driven by the investment market and new development that’s going through as well,” she said.
Ms Taylor said the restrictions in interest only loans, most commonly used by investors, were already excluding or disincentivising her clients.
“My normal everyday mum and dad investor didn’t expect this to happen or as quickly as it did,” she said. “The requirements became a hurdle that people just couldn’t jump over.”
Dr Wilson said he was surprised the Sunshine Coast had outperformed the Gold Coast over the September quarter.
“It’s done very well and I think that’s a market that can wax and wane but I think it’s under regarded in terms of its resilience,” he said. “The annual growth rates are very similar and there is some disparity between the medians.
“I’d noticed the demographic has changed, it’s very much a prosperity type of person visiting the coast now. I think it’s changing its profile into an elite market.”
The Sunshine Coast featured much less development, which made it more attractive for owner-occupiers, Dr Wilson said.
“I also think it’s much more of low rise, relaxed place,” he said. “It doesn’t have quite the entertainment focus the Gold Coast is built on.”
Ms Taylor said not to expect a massive upswing on the Sunshine Coast any time soon, however.
“The Sunshine Coast has been doing it tough, in terms of employment,” she said. “It’d be remiss of me if I said the Sunshine Coast is going to do wonders with the lack of employment, but things are growing, infrastructure is growing.”