The Gold Coast may have been thought of as one of the country's most up and coming areas for some time now, but next year could be when it really starts to thrive.
SQM Research has released its Gold Coast Market Snapshot, which predicts the region will outperform many other parts of the country for real estate investors in 2016. As a result, the three-star rating issued by the group back in 2011 has now been revisited and increased to 3.75 stars.
Managing Director of SQM Research Louis Christopher suggested the region has dealt with many of the major negative events in an impressive manner. This has led to "favourable economic factors" emerging throughout the area, which could provide an impetus to buy commercial property in Surfers Paradise.
One of the main reasons the Gold Coast is well-placed to make the most of economic conditions is because it relies so heavily on tourism. The recent depreciation in the Australian dollar has meant tourist numbers are improving, leading to increased investment opportunities in this particular part of Queensland.
There is also the fact that the region will be hosting the 2018 Commonwealth Games. These are set to be held from 1-15 April, which This will no doubt give the Gold Coast both national and international appeal. Previous Games held in Sydney, Perth, Brisbane and Melbourne have been shown to have a positive impact on the local economy.
SQM Research also indicated that the Gold Coast is still experiencing price readjustment following the market crash of recent years. As a result, people have the opportunity to buy commercial property on the Gold Coast and other nearby locations for a price that is perhaps still slightly lower than the market rate.
It's not only the tourism industry that the region has to be thankful for. There is also the fact that its population is expanding, therefore placing increasing pressure on property supply.
As SQM Research indicates, the Gold Coast hasn't yet experienced a building boom. Until this happens, pressure will continue to mount on existing properties and lead to price increases.
In the current economic climate, rental costs are rising at a rate of around eight per cent per year. This could offer investors significant returns in the long term, especially as SQM believes the region's success is only likely to improve.
As with any market, there are some headwinds that could become apparent over the coming months and years. SQM forecasts that while the prospect of the Commonwealth Games is having a positive effect at the moment, there could be a slump in 2019 after the tournament has taken place.
Any economy that's reliant on tourism also has the potential to face difficulties. The dollar may be enticing visitors at the moment, but just how long is this likely to be sustained for?
The low interest rate has given many buyers an incentive to enter the market, although there's no guarantee it will persist for much longer. Some analysts such as the Housing Industry Association believe it could be a while before a rate rise occurs, but there are no guarantees.
Commercial property purchases need to be well-considered in order to be effective. This is where the expertise of Ray White Commercial can come in useful, as we have a presence throughout the Gold Coast. Our local knowledge is second to none, so you can realise your property ambitions in this highly sought after part of the country.