Published on September 30, 2015

David Koch

"Smart money is starting to get into the Gold Coast" - David Koch

Nick has spoken many times on the how to read the media relative to the property market.  When to follow its lead and when to be very wary.  See Nick's article about this here: ‘PROPERTY CLOCK’ WOUND BY HIDDEN MEDIA CYCLE'.

Nick suggests there is a period of mixed messaging from commentators and in the media at both the bottom and the peak of the market. This period of mixed messaging, when a market turns, can last for 18 months to two years. In the case of Gold Coast the market bottomed about two years ago and we saw an extended period (12 to 18 months) where excess stock was absorbed.

Price growth doesn't generally occur in this phase, rather a rebalancing of the supply / demand ratio that leads to price growth (in the growth phase).

As stock levels dry up and confidence returns a market enters what we call the 'growth phase'. By this time the market commentary tends to be only positive, thus buyers return and prices begin to rise; 18 months to two years after the market turned.

Nick believes the Gold Coast market bottomed and turned in late 2013 but it has only been in more recent times that sales evidence confirms this was the case.

Gold Coast has absolutely been in growth phase for between six and 12 months now.  Yes, growth has been relatively moderate thus far; 11 percent over the last 12 months, with evidence suggesting this is just the beginning of a prolonged  upward swing. 

Conversely, Sydney has been sitting somewhere near 12 o'clock for some time and the mixed messages as to whether the Sydney property market has already peaked or has more growth ahead of it have been playing out in the media for over a year now. Recent sales auction clearance rates (an indicator of depth of market) have held reasonably firm but suburb price growth seems to be more in the outer suburbs.  Some experts believe Sydney has passed it's peak while others still believe it has a little while to run.  Either way however the overwhelming sentiment is that Sydney has had it's time and based on Nick's theory, that market has already turned with the evidence of that still to appear.

Gold Coast Market

We believe the past two years has offered opportunity to enter the Gold Coast market but now there is overwhelming evidence to give certainty to those who needed to see the market upswing. Our focus is limited to selected suburbs that have solid infrastructure and or planned infrastructure, opportunity for jobs, population growth and preferably limited supply.

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This is what Kochie said:
FINANCIAL expert and Sunrise host David Koch has backed the Gold Coast to ­deliver rivers of property gold.

“Every investment follows a cycle. A boom is always followed by a bust, and every bust is followed by a recovery … it’s just a matter of timing,” Mr Koch said.

“And the outlook for Gold Coast property now looks ­pretty good.”

The former financial journalist was vilified three years ago for predicting the Gold Coast market would be catastrophic for a prolonged period. Now, he said he might find himself back on the Christmas card lists of Gold Coast real ­estate agents.

Mr Koch quotes independent property advisory and research group SQM Property’s latest research, which predicts local dwelling values to rise 7 to 11 per cent next year and become one of the best-performing regions in the country.

Speaking to the Bulletin yesterday, Mr Koch said: “A recovery always follows a bust. We’re seeing a recovery. When the property market for the rest of the country is looking pretty soft, the Gold Coast is looking good.”

About a year ago he predicted in his column the “smart money was starting to get into the Gold Coast”.


“Now we’re starting to see some good returns. I was thinking of investing 12 months ago but got distracted with some other things I was investing in.” 

See full article here

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Katrina Lockhart