News

Are Gold Coast apartments a good investment?

By Greg Bell

Where does the Gold Coast fall in terms of yields and long-term success? Let's take a look at whether or not apartment units on the Gold Coast property market are a good investment.

Investing in apartments

Apartments, in general, can be a great addition to your portfolio when you invest in them correctly. If you can get your hands on the right property, there are many benefits. Here are some of the most notable advantages of investing in apartments:

  • Secure income stream: If you can buy an apartment unit in a location that has a low vacancy rate, there will likely be a more reliable income stream as a result of renting the space out.
  • Good starting point for new investors: This can be a great chance to diversify your portfolio with a relatively low chance of overturning.
  • Asset value appreciation: With a relatively more affordable point of entry, apartments can easily appreciate in value with the right investment choice.
  • Simple maintenance: While there is still some maintenance required on the landlord's part, apartments usually do not need the same level of property management as a house would.

There are many other circumstantial opportunities that are found through apartment investment. As always, it's important to consider what choices would be best for you and your portfolio.

In general, rental vacancies have been low in certain areas and higher in others, so it can help to watch migration patterns to see popularity rates. For example, the population growth rate has been steadily increasing and is projected to rise by 1.47% in 2023, making it a good location for property investment.

Current rental yield of apartments as an investment

The Gold Coast has been seeing extremely high rental property yields for investors. According to SQM Research, apartments and other similar units report a yield of about 5.8%. This can be compared to the housing yield, which is still considered progressive, but lower than apartments at 4.5% and 4.7%.

This is impressive, especially compared to the interest rate average, (which is about 3%) and the CPI, which is estimated at 3.8%. If you choose to rent your apartments, there is a great chance that you will see significant returns over time. This can act as a hedge against inflation in other areas of your portfolio. Look for places with historically low vacancy rates and high rental yields.

Historical Gold Coast market apartment prices

Gold Coast property and real estate market property prices have been extremely hot in the past few years, and while it is cooling slightly, the apartment market is still favouring investors. Ray White Surfers Paradise found that the migration from our southern states and interstate buying contributed to the strength of the Gold Coast market in 2021 and early 2022.

According to ABC, "a record 2,492 new apartments were sold last year, above the five-year average of 1,100." This increase has resulted in a low supply in the market for renters and a high return on investment for those who own the units. The low supply was created by high demand, a slow supply chain shipment in general, high construction costs and low labour shortages.

The Gold Coast housing market in general has been extremely attractive for investors. QBE's Australian Housing Outlook reported that the Southeast Queensland real estate market outperformed most other markets, including Brisbane, Perth and Adelaide. The depth of the market has yet to be reached and there is room for improvement, which makes it a good time to seek an addition to your portfolio.

Top Gold Coast apartments to invest in

It is important to consider what you are hoping to get out of your property investment choices. When looking to buy a unit or apartment, think about whether the end goal is diversification, income turnover or rental yield pursuit. However, there are some basic apartment locations that may have a higher success rate for a property investor.

Highland Park is a popular suburb and has also seen some price growth for investors for both houses and apartment units. The Urban Developer reports that Highland Park has the "most sought after suburb with the median unit price soaring 45.9% over the year." The location has continued to attract investors, buyers and families.  According to realestate.com, Highland Park has seen a compound capital growth rate of 34.9% for houses and 37.8% for units, based on the past five years of data.

To learn more about the best Gold Coast apartments to invest in, reach out to the professionals at Ray White Commercial Gold Coast.

Up to Date

Latest News

  • How Australian tourism can boost your investment

    After two years of a slow international travel market, tourism in Australia had taken a massive hit. Now that vaccinations are rolling out, global travel is being more widely encouraged and things are picking up pace once again. By the end of 2022, experts are predicting that the tourism industry … Read more

    Read Full Post