There is something special about prestige property. Yes, that might be implied by the prefix ‘prestige,’ but as we will discover – the prestige property market (especially within South East Queensland) is proving remarkably resilient to national and international real estate market movements. Indeed, according to Knight Frank research, the Gold Coast’s prestige property home has continued to outperform all other major Australian cities.
With average property values in Sydney and Melbourne declining, the Gold Coast Markets have remained stable, but prestige property values in the Gold Coast are still increasing. There are many reasons for this, not least a surge in demand for prestige property rentals.
Simply put, there are not enough prestigious homes to keep up with rental demand, which is only increasing across all sectors of the real estate market. The Gold Coast sports some of Australia’s most expensive prestige property rentals, for example, a Main Beach property rented for $7500 a week on realestate.com.au in July 2022.
This is fantastic news for investors looking for great returns as well as property owners considering selling their property. Strong rental yields give a solid foundation to support current property values, meaning that owners should feel relatively confident that they have not ‘missed the boat’ when getting top dollar for their property. On the contrary, there is probably no better time to appraise your property to see what it is worth today.
During the height of Covid, with intermittent lockdowns, border closures and the ongoing restrictions on people’s lives, the Gold Coast was a prime destination for sea changers and those looking to ‘wait it out’. Since restrictions have been lifted, many have chosen to remain, and in the meantime, have been happy to continue to rent.
At the same time, this well-heeled demographic is increasingly looking to buy, as they have integrated more into the Gold Coast community and lifestyle. The result is that when a prestige property is placed on the market, there is a considerable demand, supporting property values and driving rental yields. As rental yields increase, prestige properties become more attractive to investors looking for great returns and to park their money during times of growing inflation.
It takes considerable effort and resources to build a prestige property, even at the best of times. Rare and hard to source building materials, specialist building and design skills, unique fixtures and fittings, designer appliances and technology, the list is exhaustive. Unfortunately, inflation, uncertain market forces, cost of fuel (and therefore shipping), long wait times for delivery (as well and an extensive list of other variables) mean that the price of building has risen massively. It has never been more expensive to build a property in Australia.
Now, whilst this is bad news for builders and off-plan home buyers, it is excellent for current prestige property owners, as it means their ‘asset’ costs more than ever to create.
As the dark yet still relevant proverb goes, “A bird in the hand is worth two in the Bush”. Building costs are not the only variable driving and supporting prestige property values, but uncertainty around build times means buyers are even more attracted to existing properties!
As many holding Crypto portfolios would no doubt attest – there comes a time when they must ‘realise’ their investment and cash out. With demand so high, if you have been considering selling your property, now would be the time to do so. Click here to book a comprehensive, up-to-date property appraisal today.
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