When you're buying commercial property in Surfers Paradise, it's worth keeping an eye on how land values are stacking up. They can show the strength of both the residential and commercial markets, and might reflect how much demand there is for property in a certain area. The Valuer-General's Property Market Movement Report for 2015 is one good source of this information and raises some promising figures about commercial and residential land across Queensland.
The report valued around 75 per cent of all properties in Queensland to determine median prices. It breaks the property market into a number of regions, but commercial investors in Surfers Paradise and the Gold Coast could find some encouraging trends.
The report found that most of the Sunshine State's major centres experienced rising values over 2014, which could reflect how strong both the commercial and residential markets are tracking along. According to the report, in the Gold Coast council area, land values have improved 10.7 per cent. In fact, the median price for residential land rose 9.5 per cent in value.
There is also rising demand for development land, which is something that the Housing Industry Association (HIA) in Queensland confirmed after analysing the Australian Bureau of Statistics building approval figures. Approvals jumped 48 per cent in January according to HIA's Queensland executive director, Warwick Temby.
"While this spike is not expected to be repeated very often it highlights the underlying strength of demand for home building in Queensland," he said.
Detached home approvals also performed strongly in January, increasing by 3.3 per cent. However, while land values remained relatively unchanged away from the coast and west of the motorway, waterfront residential land saw sizeable increases over the year. However, multi-unit projects have been a big driver of this result, with approvals up 11 per cent over the month. The Valuer-General's report also noted that there were moderate rises in values with residential units.
Commercial property investors in Surfers Paradise could take this as an auspicious sign. Not only could it reveal that the market is continuing to improve, but as more people build homes, it is likely that demand for commercial property will also increase in the surrounding areas. In fact, the report noted that commercial land values seem to have reaped the benefits of high demand in these highly populated areas.
Population growth also has a large impact on demand for land. The Treasury's Intergenerational Report for 2015 has some interesting predictions for Australia's population over the next 40 years, forecasting it to swell from 23.7 million currently to near 40 million by 2055.
Queensland has already experienced strong population growth. According to the ABS, the Sunshine State's population grew 1.5 per cent over the year to June 2014. Given that the Intergenerational Report predicts the population to grow 1.3 per cent year on year, this could provide some opportunities for commercial investors in Surfers Paradise. Commercial and residential land values will likely increase as more people call the area home.
The Intergenerational Report also had some intriguing things to say about the country's ageing population. By 2055, the number of Australians aged 65 plus is forecast to double. The report also points out that Australians have among the longest life expectancies in the world, which means a demographic shift could well be in store. These people could remain in the workforce for a great period of time than ever before, which puts some pressure on commercial space as businesses expand.
Strong population growth and an improving property market in Queensland could be a great combination for commercial property investors in Surfers Paradise. With the future looking bright, get in touch with the professional at Ray White Surfers Paradise about your commercial asset options.