Gold Coast and Sunshine Coast have typically been less affordable property markets than Brisbane has been. The disparity has remained relatively consistent over time. With mortgage repayments at 22% of incomes in Brisbane in 2017 compared to 28% in the other two centres. This disparity in Gold Coast is partially due to the larger percentage of the population base working in the tourism and hospitality sector and the higher percentage of people no longer in the work force.
The economy in the Gold Coast is largely driven by tourism, hospitality and construction. Recent population growth is largely driven by the livability and amenity of the area. According to SGS Economics & Planning; while tourism is likely to remain a mainstay of the city’s economy, the region will need to diversify into other sectors to reduce its dependence of the industry, and grow jobs in more knowledge intensive sectors.
Gold Coast’s Population growth rate has been higher (per capita not total people) than greater Brisbane, increasing by 129k people over the past 10 years. Growth has slowed in recent years. It is expected that the population will continue to grow but at a slower rate; in line with greater Brisbane and the rest of South East Queensland (per capita).
Because of the strong involvement in the tourism and construction sectors, this market is strongly affected by the RBA interest rate. When interest rates increase, people travel less so yields in holiday homes drop. Also when interest rates rise it gets more difficult for developers to build and so construction slows. This leads to a slightly more turbulent market with larger differences between the good days and the bad. As an example, the housing market in Gold Coast dropped 12% from 2009 through to 2013. From 2013 to 2017 the market out-performed the Brisbane market growing 27% while Brisbane grew 22% (BIS Oxford economics).
We discuss some of the other fundamentals driving this market and what we expect to see this market do over the short to medium term in 6th episode of Coffee & Property