Buy low, sell high - no better place to do this than the Gold Coast

www.goldcoastbulletin.com.au/news/gold-coast/gold-coast-beachfront-market-rises-as-luxury-living-back-in-fashion/news-story/bf97db0b8e6ef147fdccdd5e2d1aed18

Last year this Mermaid Beach pad sold for $8.4 million. This month it is under conditional contract for $3 million more...

This is what I love about the Gold Coast market. Volitility is your friend, as a trader and investor, IF YOU KNOW WHAT YOU ARE DOING!

Every cycle its the same on the GC. The smart money moves in over a relatively stagnant 5 year period, and then for a few years all goes NUTS! That's when the smart money get out, selling at crazy prices to cashed up (or leveraged) buyers who want the dream and have "FOMO" fear of missing out. Then bust, and repeat.

I've seen established players repeat the cycle 3 times over the last few decades. They are the long term big winners. And I've also see the losers. They typically disappear after their big losses never to be seen or heard from again, but they is always a new supply of buyers who fall in this category...

 

So why not put options on these houses then re-sell?

 

High volatility is funny business and a double edge sword. Regional tend to exhibit higher volatility than capital cities.

It's even harder to get timing right in smaller places so proceed with the usual caution.

Amazing, this selling houses to each other to create(transfer) wealth business.

 

You basically can do if your deposit is low enough and settlement period is long enough. I've seen it happen during prior booms. Put down 5% and seek a 3 month settlement period. Can work but you can also be stuck with your property if you have an "expired option". Then you need to either get the finance and pay up or forfeit the deposit.

 

Exactly. Massive "wealth creation" happens with Gold Coast beach side during booms. Everyone benefits - lawyers, accountants, bank loan officers and finance companies, property agents, labourers - key is just to cash out in time.

We are far far from a peak though. Gold Coast is just warming up!

 

They have in times past ej89.

Hedges Avenue was alive with some enterprising vendors placing call options on each others properties to raise prices and a frenzy of sorts was occurring in the street. They sucked in banks and valuers. The only cost was the stamp duty payable on the spread of on-selling the option to the final suckers who actually settled on some of these properties. With re-valuations the stamp duty was actually capitalised into their loans Unfortunately the zenith was 2008 and well............. some people saw their values erode to 50 % of purchase price till the bottom arrived in late 2012 to early 2013.

There is recovery now and it has a while to run yet, however the trophy homes might be affected again when the next Armageddon occurs here in four or five years time. It will be led by the glut of apartments under construction and hopefully be contained to those types of properties. It is a cyclical place. Commercial here now is at its peak as many properties are selling before auction on ridiculously low yields. Wait till interest rates rise in a year or two. The commercial market will soften also.

 

Everyone is rubbing their hands together now laughing to the bank.
As far as cycles go, 10 yrs of flatlining while Syd and melb moved.. Still rather have my money in Melb as it is a major centre

 

This approach makes little sense if you are an investor now and out to make money.

 

Do you think this cycle for gold coast is any different to the past? Boom and bust with a flatline in between.
- I don't think I have ever met an investor out to loose money lol

 

That right. You want to make money. So rather than buying a market that has peaked, Sydney for example, you buy somewhere that is about to boom, Gold Coast for example.

Same with Perth. Sooner or later history repeats and that's when the smart money buys into markets poised for sharp gains.

 

I agree.
However I don't want to make money and then have nil growth for 1-2 ugly Gold Coast cycles..

 

Ghost
Not saying gold coast is the answer but you do realise tgat between 2004 and 2013, sydney had no growth?

Melbourne did nothing between 2010 and 2014

Cycles effect every market and theres no hard or fast rule that sais a bigger market is less volatile - sydney

 

Nice

 

Player
Property is all about cycles, that's it in a nutshell, I guess if we understand what is rising and what is falling then we all have a very good chance of making money, perhaps cant get it right all the time, but you dont need to as long as you get right most of the time.

MTR

 

I think the Gold Coast is somethere these spikes and lows happen all the more too because of the beauty of the beaches and excitng atmosphere.People come for a short break and feel great on emotion -so buy in-Then realise the costs to hold and that many others bought in the same as they did on "the feeling",causing oversupply and loss .
Its definately a place to time the market!'
look at the High rise at the moment-(not that i like those due to over supply but some beachside propertys are still way under build cost,so these are an option to get in now and sell at peak in a couple of years.

 

Perfectly aware of cycles and states.
Just getting at - Gold Coast is not the holy grail and I wouldn't be ridding it all the way to the bank, as part of a divisified portfolio sure it is great!

 

I would say, right now, if you are a cyclical investor looking for a gain next 3-4 years, Gold Coast likely is indeed the holy grail, at least in terms of the Australian market. I can't foresee anywhere else which will pop as much over this time period, especially if you buy beachside of the GC highway.

Longer term, if you are talking multiple cycles, you will find, Brisbane, Gold Coast, Melbourne and Sydney all perform relatively similarly. But I guessing that places in each of these locations that are geographically limited in some way (eg ocean view, beachside etc) outperform overall.

The biggest mistake an investor can make is to be buying stuff "because its gone up a lot". Whether is shares, commodities, or Sydney property, this is actually a key sign I look for to either exit a market, or stay away from it. What you should be doing is looking for stuff that "has gone down a lot" where you have identified fundamentals that indicate a turnaround is likely. And right now, the Gold Coast is definitely in that category. Next 4 years is going to be nuts. So lets see- who is buying now, and who are the ones going to be buying in 4 years "because Gold Coast is going up a lot".

 

Got to be investment opportunities on this build out too.

 

Nah mate, how you supposed to run the show at the friendly BBQ if you can only say your place had dropped by so much and you got an extra discount on top by jumping in at the end of the crash, surely the game is to say I just bought a unit in Sydney, has gone up 40% ..... lol & then to say Sydney is the best & I smashed a few first home owner prospective s from the media on the way in so they have lot's of stuff to write about.

 

not sure i agree with this part. Longer term id expect sydney snd mel perhaps along with bris to post similar numbers.
The gc has very different drivers that those three ( who also have differing drivers but increasingly common drivers). The gc has no commonality in long term with those.