Focus on Gold Coast Q1 2019 Research

RESIDENTIAL RESEARCH

LIVING & STUDYING BUYING PROPERTY WHY INVEST?

Contents 1. Gold Coast— The transforming city page 2

2. Living on the Gold Coast page 3 proximity to Brisbane (approximately an 3. Studying on the Gold Coast Destination hour by car), many local residents make page 7 their way down to the Gold Coast for a Gold Coast weekend getaway. Many also visit from 4. Housing on the Gold Coast The Gold Coast is known as being interstate and Asia for a long weekend of page 10 ‘Famous for Fun’ with many local and activities.

5. Renting on the Gold Coast international events held throughout the page 11 year. It’s also known for being Australia’s Surfers Paradise is also located on the theme park capital. Many of Australia’s Gold Coast, with fine dining restaurants, 6. Buying on the Gold Coast largest theme parks are located on the cafés and bars with a pedestrian-friendly page 12 Gold Coast and within close proximity to shopping district. each other. The destination is popular 7. Buying as a First Home Buyer with families, catering to all age groups Many international, flagship and luxury page 13 and particularly in school holiday times. brands are located at Pacific Fair shopping centre, in Broadbeach, 8. Buying as a Foreign Investor page 14 The Gold Coast accommodates a vast including a dining and cinema precinct. array of renowned restaurants, art Marina Mirage in Main Beach also offers 9. Owning on the Gold Coast galleries, independent fashion houses luxury shopping, with high-end fashion page 19 and vibrant retail strips. Given the close and eateries.

10. Selling on the Gold Coast page 20

Feature: International Visitors to Queensland, by Country of Residence 10 reasons to invest on the Total number, year ending September 2018 Gold Coast

page 22 China New Zealand U.K U.S Japan Other Countries Other Europe Germany Taiwan Korea India Hong Kong Singapore Canada Other Asia Malaysia France Scandinavia Italy Netherlands Switzerland Indonesia Thailand

0 100,000 200,000 300,000 400,000 500,000 600,000

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Carrara Markets, with fresh produce to homewares across 10 acres, are Distribution of Population Greater cities (excl. Gold Coast LGA), Jun-17 Australia’s biggest permanent markets. FAST FACTS While Australia’s largest outlet centre Harbour Town, includes clearance, brand, 6,000,000 GOLD COAST plus specialty stores. 5,000,000  Located in South East

4,000,000 Queensland, along the East International Coast of Australia. 3,000,000 Visitors  Australia’s six largest city, with The number of international visitors to 2,000,000 approximately 592,500 Queensland grew 4.6%, to total residents estimated living in the 1,000,000 Gold Coast local government 2.8 million, in the year ending September area in 2017. 2018. The most number of international 0

visitors came from China (502,000), New Perth  Geographic area of 1,330 sqm.

Hobart

Darwin

Sydney

Adelaide

Brisbane Canberra

Zealand (485,000), United Kingdom Melbourne

(235,000), United States (227,000) and  Summer months are relatively Gold Coast LGA Coast Gold Japan (206,000) as shown in Figure 1. hot and humid (mean maximum 25°C) with warmer winters (mean average 15°C). Compared to a year earlier, in

Queensland, international visitors from  Most daily sunshine is nine (9) the Netherlands grew by 27.2% in the hours in the month of year ending September 2018, while Korea December. and Singapore increased by 17.1% and Projected Population  Gold Coast operates under the 13.9% respectively. According to Queensland Treasury Australian Eastern Standard projections, the Gold Coast LGA Time (AEST) time zone at all population is projected to grow annually times of the year. by 2.2%, to 866,650 persons by 2036.  From the Gold Coast, average flying travel time is approximately eight (8) hours to Singapore and eight and a half (8.5) hours to Kuala Lumpur. From Brisbane airport, Projected Population, average flying travel time is Gold Coast LGA nine (9) hours to Jakarta and Estimated no. of total persons, year ending June Hong Kong, 11 hours to Shanghai and 13 hours to Gold Coast’s Beijing. 1,000,000 Demographic  Located in the ‘Sunshine State’ 900,000 and home to one of the most Profile renowned natural wonders of 800,000 the world—the Great Barrier Population Reef. 700,000 Gold Coast LGA population has been significantly rising. Over the year to 30 600,000 June 2017, an increase in the estimated resident population was recorded at 500,000 2.7% to 592,350 persons. 400,000 According to the Australian Bureau of 300,000 Statistics (ABS), this is well above the overall Australian population growth of 200,000 1.6%. 100,000 When compared to the Australian capital 0 cities, the Gold Coast LGA population is 2012 2016 2021 2026 2031 2036 ranked the 6th largest, ahead of Canberra, Greater Hobart and Greater Darwin.

Age Distribution Technicians and trades workers (14.9%), clerical and administrative workers The Gold Coast LGA residents were (13.6%) and managers (12.4%) were the primarily young to middle aged at the next most common occupations. time of the last Census in 2016.

Approximately 33.2% of the population Of all the employed people in the Gold was aged between 15 and 39 years old; Coast LGA, 4% worked in hospitals. compared to the national average of Other major industries of employment GOLD COAST 33.9% for this age group. The median included cafés and restaurants (3.1%), age of the population in the Gold Coast ANNUAL EVENT accommodation (2.6%) and supermarket LGA was 38 years, similar to the national and grocery stores (2.4%). CALENDAR average. Children aged 0-14 years

comprised 18.1% while people aged 65+ JANUARY years made up 16.4% of the population. Travel to Work  Magic Millions Polo, Sales & Racing Carnival In the Gold Coast LGA, at the time of the  Australia Day celebrations Multiculturalism Census 2016, the most common FEBRUARY methods of travel to work for employed The Gold Coast LGA population  Sand Safari Arts Festival people were by car, as a driver (68.9%). comprised 36.1% of people being born  Gold Coast Chinese New Year Other responses were worked at home Festival outside of Australia, higher than the (5.9%), car, as a passenger (4.8%),  Gold Coast MS Swimathon national average of 33.3%. The most walked only (2.6%) and by bus (1.1%). prominent countries of birth include New MARCH  Australian Surf Life Saving Zealand (8.0%), England (5.2%), China On the day, 4.2% of employed people Championships (1.3%), South Africa (1.2%) and Japan used public transport (train, bus, ferry, APRIL (0.8%). In addition, approximately 33.4% tram/light rail) as at least one of their  Cooly Classic Ocean Swim of Gold Coast’s residents’ parents were methods of travel to work and 75.2%  Gold Coast Film Festival born overseas, lower than national (34%).  Quicksilver Surf Pro used car (either as driver or as

passenger). MAY Religion  Surfers Paradise LIVE music festival The Catholic religion was practiced by  Sanctuary Cove International 20.8% of Gold Coast residents at the Boat Show Key Employment  Blues on Broadbeach Music time of the Census 2016, this was Festival followed by Anglican at 16.1%, then Hubs

JUNE Uniting Church with 3.9%. No religion was the most common response on the  Premier Invitational Soccer Commercial Tournament Gold Coast with 31.8% of the population.  Australian Open Bowls The distribution of employment

opportunities are wide across the Gold JULY Language Coast, although there are pockets of  Gold Coast Airport Marathon  Groundwater Country Music Other than English, Mandarin (1.7%) is concentrated areas for office workers. Festival the most common language spoken in a AUGUST Gold Coast household. Other typical Southport is the largest office market on  Gold Coast Festival of Lights languages include Japanese (1.0%), the Gold Coast, followed by Robina-

SEPTEMBER Korean (0.6%), Spanish (0.6%) and Varsity Lakes, Bundall, Surfers  Swell Sculpture Festival Cantonese (0.5%). Paradise and Broadbeach. Most accessible by: train, light rail, bus OCTOBER and car.  Supercars Gold Coast 600 Education  Harrigans Rod & Custom Car Show In the Gold Coast LGA, 30.5% of the  Coolangatta Gold Endurance population were attending an educational Industrial Race institution at the time of the 2016 Census. Industrial areas are more spread across NOVEMBER Of these, 21.1% were in a university, the local government area varying from  Australian PGA Championship tertiary, technical or further education warehouses and industrial unit estates.  Gold Coast Seniors Health and institution. Most accessible by: bus, car and/or train. Lifestyle Expo

DECEMBER Suburbs along the Pacific Motorway  Mayor’s Christmas Carols & Work include: Yatala, Stapylton, Ormeau, Markets The most common occupation of Gold Pimpama, Coomera and Nerang.  Gold Coast New Year’s Eve Party Coast residents are in Professional Suburbs on the Gold Coast Highway Services—at 18.3% compared to the include: Arundel, Molendinar, Ashmore, national 22.2% average. Southport, Burleigh Heads, Currumbin.

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Gold Coast Major infrastructure network

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single student visa regardless of their Schools Universities chosen course of study and the Student Schools in Australia generally comprise a Most universities have a main campus Guardian Visa—Subclass 590 where mix of local and international students. with several smaller campuses located student guardians can apply for the new The education system is broadly divided across multiple states and territories; in Student Guardian Visa. into primary (aged 5-12) and secondary CBD, metropolitan and regional areas. (aged 13-18). There are two main types This provides a wide range of options All students and student guardians will of public and private schools: when studying in Australia with many generally be required to lodge their visa universities also setting up campuses application online by creating an based in major international cities. Public Schools ImmiAccount. Public schools are financially and administratively operated by the State International Government and provide free education to domestic students. First preference is Students normally given to those living within a Reflecting the good reputation particular catchment area from the internationally, universities in Queensland APPLICATION school. Student visa holders must pay a accommodate a large international PROCESS FOR fixed fee for each year of education, student base. International student INTERNATIONAL dependent on the type of visa held. enrolments in Queensland increased 11.2%, to 123,750, in 2017. Higher STUDENTS Selective public schools are financially Education had the most demand in and administratively operated by the student enrolments with 45,800, while State Government. Selective public international enrolments in Schools TO SCHOOL schools are regarded as more prestigious represented a total 5,650 students. Expression of interest form: must due to the academic selective nature. be completed prior to the school Students must sit academic examination Across all education sectors, the largest year in order to guarantee a and excel in order to be offered a group of international students enrolled in position for the student. position from the respective school. Queensland are from China (26,700), India (11,750), Brazil (11,250), South Wait for offer: If all requirements Additionally, these selective public Korea (7,200) and Colombia (5,350). are met, the school will offer a schools do not usually limit their intake to formal placement in writing. catchment areas. Due to their public The application process for international nature, student visa holders must pay a students applying to Australian Apply for a Student Visa: With the fee for each year of education. universities is similar to local students. formal school offer, students can The length of the application process can then apply for the SSVF online. Private Schools often be longer than local students, as more information is required before Independent schools are financially and acceptance. administratively privately operated. TO UNIVERSITY Independent schools therefore hold more Most universities will require an IELTS Apply directly online: through the control over the quantity and quality of (International English Language Testing university website and provide all teachers, classroom sizes, amenities and System) examination conducted, an required evidence. In most co-curricular activities. Fees for internationally recognised education instances this is prior education, independent schools are usually high, but qualification and a portfolio of previous financial and English language can be considered to provide an work experience where applicable. competence. investment for superior education and amenities to students. The Simplified Student Visa Wait for Offer: If all requirements are met, the university will offer a Religion-based schools hold faith at the Framework (SSVF) formal placement in writing. core of their education—however they The Simplified Student Visa Framework continue to follow the state government (SSVF) is designed to make the process Apply for a Student Visa: With the education curriculum. These religion- of applying for a student visa in Australia formal university offer, students based schools are usually non- simpler to navigate via two subclasses: can then apply for SSVF online. government, and thus often have higher fees than government subsidised Student Visa—Subclass 500 where schools. international students can apply for a

Private Schools for International Students, Gold Coast Sample of private schools registered to accept international students, 2018

Suburb School Religion Gender Year Levels

Arundel A.B Paterson College Non-denominational Co-ed pre-K-12 Ashmore Trinity Lutheran College Christian Co-ed K-12 Benowa St Kevin's School Catholic Co-ed pre-K-12 Carrara Emmanuel College Multi-denominational Co-ed pre-K-12 Coomera Saint Stephen's College Catholic & Anglican Co-ed pre-K-12 Coomera Coomera Anglican College Anglican Co-ed pre-K-12 Daisy Hill John Paul College Ecumenical Co-ed pre-K-12 Jimboomba Hills International College Non-denominational Co-ed pre-K-12 Kingston Groves Christian College Christian Co-ed pre-K-12 Merrimac All Saints Anglican School Anglican Co-ed pre-K-12 Mount Tamborine Tamborine Mountain College Non-denominational Co-ed 7-12 Mudgeeraba Somerset College Inter-denominational Co-ed pre-K-12 Ormeau Livingstone Christian College Christian Co-ed pre-K-12 Park Ridge St Philomena School Catholic Co-ed pre-K-12 Reedy Creek King's Christian College Non-denominational Co-ed pre-K-12 Reedy Creek Hillcrest Christian College Inter-denominational Co-ed K-12 Reedy Creek Gold Coast Christian College Seventh Day Adventist Co-ed K-12 Southport The Southport School (TSS) Anglican Boys pre-K-12 Southport St Hilda's School Anglican Girls pre-K-12 Upper Mt Gravatt Clairvaux MacKillop College Catholic Co-ed 7-12 Waterford Canterbury College Anglican Co-ed pre-K-12 Yatala Rivermont College Non-denominational Co-ed pre-K-12

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Universities, Gold Coast Universities accepting international students Annual Average World Australian Number of International Adjusted International University Name Ranking Ranking International Students % of Graduate Salary Student Fees 2017 2017 Students Total Students

Griffith University 353 8 $48,531 8,432 19% $24,000 Bond University 880 13 $49,204 1,763 35% $33,000 Southern Cross University 1,054 40 $47,728 1,921 14% $21,000

Definitions World Ranking is calculated by averaging the ranking produced by QS World University Ranking, the Shanghai Academic Ranking of World Universities and Webometrics web publishing rankings. Australian Ranking is calculated from the combined score for World Ranking (reputation), Graduate Satisfaction (ratings) and Adjusted Graduate Salary (results). Adjusted Graduate Salary is a measure of how well students are doing in the job market some months after graduating based on graduate salaries, rates of unemployment and the proportion of students who go onto further study. Annual International Student Fees are an estimate only. It is highly recommended to engage directly with the Australian university for information on the course and fees applicable. Further information is available at univeristyreviews.com.au

The Gold Coast accommodates three universities accepting enrolments from both local and international students. With the linking of the G:Link light rail station at Helensvale railway station, has allowed better connection of the Gold Coast with Brisbane. For those interested in applying to study for a course in Brisbane, these universities are listed below.

Universities, Brisbane Campuses Universities accepting international students Annual Average World Australian Number of International Adjusted International University Name Ranking Ranking International Students % of Graduate Salary Student Fees 2017 2017 Students Total Students

University of Queensland 60 6 $49,752 11,236 23% $34,000 Queensland Uni. of Technology 292 11 $47,548 7,525 16% $28,000 James Cook University 377 16 $53,404 6,211 29% $25,000 University of Southern Queensland 805 22 $52,191 4,548 18% $21,000 University of the Sunshine Coast 1,535 24 $47,046 1,921 14% $21,000

The Gold Coast is well-placed for those and residential areas located directly who aspire to still own the ‘Great Distribution of Tenure, Gold Coast north of Railway Street and south of Australian Dream’ - a house standing on % of private dwellings Queen Street. a ‘quarter acre block’ - for a relatively  The PDA contains a diverse mix of affordable price. Although with our fast- uses centred around Nerang and Scarborough Streets. paced lives, many are now choosing low maintenance living and opting for  Includes retail, commercial, financial, educational, legal and community apartments in complexes with high uses. amenity. This is becoming particularly  The residential areas offer a diversity popular with downsizing households. of dwelling type and size.

To deliver new well-planned Dwelling Types communities ‘growth by consolidation’ Standalone houses (also known as in ‘Shaping SEQ’, has been identified in landed) do continue to be the most key locations including: dominant dwelling type in the Gold Coast  Light rail urban renewal corridor: LGA, representing 58% of all dwellings. Southport (Gold Coast CBD), Surfers This trends lower than the national RENTED Paradise, Broadbeach, Helensvale. average of 73% given the greater volume OWNED WITH MORTGAGE OWNED OUTRIGHT  Gold Coast rail transport corridor: of higher density properties. NOT STATED Robina, Nerang, Helensvale. OTHER  Gold Coast Health and Knowledge Similarly, semi-detached, row or terrace Precinct: Robina, Varsity Lakes. houses and townhouses with a compact  Future passenger transport corridor backyard, comprised a 21% share, above between Broadbeach and the national average of 12.7%. Coolangatta.

A little under 20% of dwellings are flats or Considering ‘growth by expansion’ has apartments – compared to the national been identified in key locations average of 13%. This continues to including: increase demand for public parklands Growth precincts and shared facilities. The Queensland government has  Coomera identified locations across the Gold Coast  Pimpama suitable for development for new homes  Upper Coomera Ownership and jobs.

In Australia, most residential dwellings Gold Coast sites identified for specific Prime properties are purchased as freehold property, that accelerated development as Priority Prime properties, considered the top 5% is, the land and building are owned Development Areas (PDAs) by the state of the residential market by value, are outright, in perpetuity, under the Torrens government, with a focus on economic mostly located close to, or dotted Title system. growth currently include: around, Gold Coast beaches or river The same exists for Strata Title, although Parklands fronts. There are many well-respected ownership allows individual ownership of private schools on the Gold Coast part of a property (or ‘lot'), combined with  The development of the PDA continuing to attract local and shared ownership in the remainder, or supported the delivery of the Gold international families to the coastal city. common property, through a legal entity Coast 2018 Commonwealth Games Village (CGV). called the owners corporation (see further Mermaid Beach is considered the most  Promoting longer-term development information on page 19). expensive suburb on the Gold Coast, opportunities on the site. and fourth in Queensland, by median

Across the Gold Coast LGA, on the night Southport value, according to CoreLogic. This is of the Census 2016, 26% of residential followed by Surfers Paradise, private properties being lived in were  The PDA is located over the existing Broadbeach Waters, Clear Island owned outright, whilst 34% were owned Southport CBD. Waters, Bundall, Paradise Point, with a mortgage. The remainder (37%)  Includes the former Gold Coast Runaway Bay, Coolangatta and were being rented from a landlord. hospital site, Broadwater Parklands Tallebudgera Valley.

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The process of renting (also known as in a trust. At the termination of the leasing or letting) a residential property tenancy agreement, if the property is can vary in each state, but generally the vacated and left in a suitable condition, main factors for a tenant to consider are the bond will be repaid in full to the outlined below. tenant.

Tenancy Agreement Utility & Service Charges A tenancy agreement (property lease) is a Responsibility for utility charges will be contract where one party conveys stipulated within the tenancy property to another for a specified period agreement—this is not always covered by of time, in return for a regular payment. the landlord. Although, the landlord must When leasing out a property, the owner pay for the actual installation and initial receives an income, but there are connection costs for electricity, gas, oil maintenance costs and responsibilities and water supply. If these need replacing, for the landlord. then the landlord must replace them to the minimum efficiency standards. Before signing a tenancy agreement, a tenancy application must be submitted to Inspections & Repairs the real estate agency (property manager) with proof of identity, ability to meet Throughout the tenancy, the property will rental payments and good references. be periodically inspected by the landlord or property manager. A minimum of seven (7) days notice will be given with Rent the purpose of these inspections being to As stipulated in the tenancy agreement, check the maintenance of the property. the tenant agrees to regularly pay rent to the landlord. Most times this is Repairs to the property that are due to conducted via a property manager and the normal wear and tear of the property rent can be paid weekly, fortnightly or must be paid for by the landlord. monthly. Any future increases will be Repairs classified as ‘urgent’ must be stated within the tenancy agreement as completed as soon as possible, while the landlord cannot increase the rent until ‘non-urgent’ repairs must be taken care the end of the fixed term, unless of before the 14 days of notification. otherwise stated. Furniture Term Generally, residential properties do not The length of a tenancy agreement can come furnished, although this becomes vary, however the standard term is more common closer to the CBD. This usually six (6) or twelve (12) months for will be clarified in the tenancy agreement. the initial agreement although alternate periods may be negotiable dependant on Terminating the Tenancy the requirements of the landlord and/or tenant. Once a tenancy agreement A tenancy can be terminated at the expires, the tenant can request a new conclusion of the tenancy agreement. fixed term, or alternatively the tenant can However, both landlord and tenant can stay in the premises at the same rent and request to end the tenancy for a variety of conditions until advised. reasons. Certain conditions must be met before the tenancy agreement can be terminated, including days of notice, Bond number of notices and reason for A bond is a lump sum payment paid termination. upfront by the tenants as security before moving into the property. This lump For further information, contact sum—usually four (4) weeks rent—is held Residential Tenancies Authority.

The Process inspection to guarantee the quality of made should the market slow over this the building and be aware of time. It’s wise for this type of investment, The process to purchase a residential maintenance required. especially with smaller and unknown property can vary widely but the most developers, that contracts are reviewed common steps are outlined below. For Negotiate by private treaty the highest by legal representation and the ‘sunset further information and clarity, consult price willing to be paid for the property clause’ explained, which places a with your legal representative. with the vendors (via the selling agent) or deadline for the construction timeline.

alternatively bid at public auction. Should a development not proceed, Finance Representation deposits will be returned, but could be at Before starting the journey to purchase a Holding deposit is recommended for a the expense of missed interest and residential property, carry out due private treaty until cooling off ends (say, capital gains through other investments. diligence of the subject property and $1,000) until formal finance is approved; surrounding area to ensure the price at this time the full deposit (say, 10%) is There can also be more tax depreciation expectation can be achieved with the paid. If bid was accepted at auction, the available on new properties, meaning allocated budget. full deposit is payable at this time (say, maximising benefits and improving after- 10%) with any cooling off period now tax cash flow for investment properties. The lending environment has become void. The deposit is generally paid by challenging in recent years, when seeking cheque or electronic transfer (private a loan from a financial institution. Many treaty only). General Costs local banks will only lend if 20% of the Contracts are signed and exchanged When buying property in Australia, there purchase price has been saved and there are both federal and state taxes and a by both parties and it’s time the solicitor is good evidence the property loan can range of fees that are implemented. (or conveyancer) finalises the formal be repaid regularly with the property loan based on market value. Shop around as paperwork with the lender. Loan mortgages and deposits can vary documents are signed. Transfer Duty significantly between providers. Transfer duty (also known as Stamp Settlement occurs when the property Duty) is levied by the state government officially changes ownership, following on the purchase of property. Legal Representation one final inspection on the day and the

Engaging a solicitor or conveyancer prior locks are changed. to purchasing the property is highly Legal Fees recommended so they can review the Buying Off-The-Plan Legal fees will vary between legal firms contract before signing, and then stay and may be dependent on property In most cases, buying off-the-plan (OTP) engaged throughout the process until the value. Generally fees range from $1,000 is the commitment to buy a property property settles (when the property to $3,000 plus GST. that’s not yet built. officially changes ownership).

An OTP property can be better priced Land Transfer Fee Buying Established Property than established stock as developers are When a property changes ownership, a Search for a property priced to match keen to secure sales in the project so document known as a Land Transfer is requirements for location, proximity to lenders will provide funding and lodged and registered with the Office of transport, work and education and the construction can commence. There is State Revenue, and a fee is charged. It is quality, size and age of the dwelling. also the potential flexibility at this time to this document that records the change of Staying abreast of comparable sales will make design changes to an apartment or ownership. The cost to register the title assist in the negotiation process. house prior to turning sod. varies in each state of Australia. A solicitor or conveyancer will perform this Inspect the property at an open house or In most cases a deposit, typically 10%, is task on your behalf. by private appointment. Request a copy paid to the developer and the remaining of the contract and have solicitor (or is paid on settlement of the property, conveyancer) read over the document. allowing more time to save throughout Mortgage Application Fee the construction period. Through this A fee charged by the state government Gain pre-approval for loan from lender time, market forces may push market for the registration of a mortgage. A and confirm qualification from FIRB if values up, at an advantage to the buyer, lender will perform this task on your required. Arrange a pest and building at the same time consideration must be behalf.

12 FOCUS ON GOLD COAST Q1 2019 RESEARCH

Both the Australian and state home. The scheme allows Australians to governments provide incentives for make voluntary contributions of up to First Home Owner Grant Eligibility Australian first home buyers. $15,000 in any one financial year, to a Criteria maximum $30,000 across all years. This First Home Owners’ Grant includes undeducted (non-concessional) Incentives for personal contributions, deducted Queensland; including Gold Coast & Brisbane (concessional) personal contributions and First Home Buyers Threshold (the property must valued less than) salary sacrifice contributions. These in Australia contributions, which are taxed at 15%, Buyer of new property $750,000 along with deemed earnings, can then be Conditions First Home Super Scheme withdrawn for a deposit if the eligibility The Australian Government, from 1 July criteria is met. Dwelling must be new, unless specified; 2017, has allowed individuals to make Persons must be a minimum age of 18 years; voluntary concessional (before-tax) and Concessional contributions and earnings non-concessional (after-tax) contributions that are withdrawn will be taxed at At least one applicant is a natural person and an into superannuation funds to fast-track marginal rates less a 30% offset. Australian permanent resident or citizen; the time taken to purchase a new home Contributions made under this scheme under the First Home Super Scheme are not a new type of contribution. They The contract date must be on or after 1 July 2018; (FHSS). Since 1 July 2018, individuals are voluntary contributions made to your You or your spouse must not have previously can apply to release these voluntary superannuation fund. As a result, a received a first home owner grant in any state or territory of Australia. If you received a grant that you contributions, along with associated separate special account doesn't need to later paid back, together with any penalty, you may earnings, to assist in purchasing their first be established nor does the fund need to be able to reapply for the grant; be notified. You or your spouse must not currently or previously For further information, contact the owned property in Australia that you lived in, or owned a home before 1 July 2000 whether you lived First Home Super Scheme Eligibility Australian Taxation Office. Criteria, Australia in or not. However if you owned an interest in First Home Super Scheme (FHSS) residential property since this time, for investment purposes (with evidence), you may be eligible; Conditions Incentives for First Must live in new home as principal place of First home buyer – never owned property in Australia Home Buyers in residence continuously for at least 6 months within – this includes an investment property, vacant land, the first 12 months of settlement. commercial property, a lease of land in Australia or a Queensland company title interest in land in Australia; First Home Owners’ Grant Must live in the premises you are buying, or intend Queensland First Home Owners’ Grant is to as soon as practicable; home is valued at $500,000 or under, the currently available. An eligibility criteria first home concession amount will match Must intend to live in the property for at least must be met before the grant is issued. six months of the first 12 months you own it, after it the home concession rate resulting in no is practical to move in; duty payable. First home vacant land concession only applies to vacant land Superannuation contributions can be from any age First Home Owner Grant Available valued under $400,000. but persons must be a minimum age of 18 years to First Home Owners’ Grant request for funds to be released; Queensland; including Gold Coast & Brisbane Only one of these concessions can be Not previously requested the Commissioner to issue claimed, with similar eligibility as the First a FHSS release authority; Grant Home Owners’ Grant, plus, one must not Eligibility is assessed on an individual basis—so One-off $15,000 dispose of the property before moving in. multiple persons can access their own FHSS Additionally for a home, one must live in contributions to purchase the same property; on a daily basis within a year of If any persons have previously owned a home, it will settlement and for land, only one home not stop any other persons being eligible to apply; can be built, one must be certain there is Stamp Duty Concessions not already an existing dwelling and live Don't sign contract to purchase or construct the home until money is released or there may be FHSS The first home concession only applies there daily within two years of settlement. tax liability; this may take up to 25 days. to a home valued under $550,000, where purchasers may be eligible for a stamp For further information, contact the duty reduction on a sliding scale. If the Office of State Revenue.

Current regulations for

foreign investors purchasing

residential  Must apply and gain approval from the FIRB prior to purchasing property on the property in Australia.  A temporary resident is a person Gold Coast  Applications are generally approved who is residing in Australia and if the property purchased adds to holds a temporary residency visa the housing stock, including new which permits them to stay in dwellings that are yet to be Australia for a continuous period of occupied or sold, off-the-plan more than 12 months (regardless of properties under construction or yet how long remains on the visa); or to be built. This includes vacant has submitted an application for land for residential development permanent residency and holds a where ongoing construction begins bridging visa which permits them to within 24 months. stay in Australia until that application has been finalised.  Non-permanent residents are forbidden to purchase established  Are required to notify FIRB prior to dwellings as investment properties purchasing property in Australia, or as homes. Although there could including an established dwelling, a be an exception if the established new dwelling that has been dwelling is being redeveloped into purchased directly from the multiple dwellings, and as a result, developer and has not been For further information: there is an increase in the dwelling previously occupied for more than count. Over the development 12 months in total and vacant land period, the house must remain for residential development where unoccupied. ongoing construction begins with 24 Foreign Investment Review months. Temporary residents are Board [FIRB]  Foreign buyers can purchase an off not permitted to buy established -the-plan dwelling, when another dwellings as investment properties. firb.gov.au buyer has failed to reach settlement—reverting to its previous  May acquire one established status as a new dwelling. An dwelling only and it must be used as apartment or house that has just their main residence (home) in Department of Immigration been built, or is still under Australia. Such proposals normally and Border Protection construction and for which the title meet with no foreign investment has never changed hands, is not objections subject to conditions; border.gov.au considered an established dwelling. such as, that the temporary resident sells the property when it ceases to be their main residence.

Non-Permanent Temporary Resident Resident (Temporary (Foreign Investor) Residency Visa)

14 FOCUS ON GOLD COAST Q1 2019 RESEARCH

The Australian Government welcomes foreign investment into Australia’s residential property market. The current rules around foreign investment in residential property aim to direct investment into new housing, increasing the housing supply and support local economic activity.

 Acquiring second-hand dwellings for the purpose of providing housing for their Australian-based staff normally meet with no objections subject to the conditions set by FIRB.  Investment migrants under this  Investment migrants under this scheme are required to invest at  The company must sell the property scheme are required to invest at least AUD$15 million into complying if it is expected to remain vacant for least AUD$5 million into complying investments in Australia for a six months or more. In remote and investments in Australia for a minimum of 12 months before rural locations foreign companies minimum of four years before becoming eligible for permanent may rent out dwellings acquired becoming eligible for permanent residency; a more expeditious under this category only where they residency. pathway than the SIV. are unable to sell the property.  The SIV scheme is intended to  The PIV scheme is aimed at  Whether a company is eligible, and target the migration of high net- attracting applicants with business the number of properties it may worth individuals to Australia with and entrepreneurial skills and capital acquire under this category, will the longer-term aim of transferring to enhance investment into depend upon the scope of the wealth of international businesses innovative Australian businesses foreign company's operations and and individuals to benefit Australian and the commercialisation of assets in Australia. businesses and the broader Australian ideas, research and economy. development.  Foreign companies would not be eligible under this category where  The SIV scheme was introduced on  The PIV scheme was introduced on the property would represent a 24 November 2012 and is operated 1 July 2015 and is operated by the significant proportion of its by the Department of Immigration Department of Immigration and Australian assets. and Border Protection. Border Protection.

Significant Investor Visa (SIV) Premium Investor Visa (PIV)

Foreign Company Investment Migrants with Australian (High Net Worth Individuals) Business

Additional Costs for Fees payable by Foreign Investors, Foreign Buyers Residential property Based on Property Value, AUD All foreign persons — that is, temporary residents and non-residents — can apply $0 - $1,000,000 $5,600 to purchase vacant residential land for development and newly constructed $1,000,001 - $1,999,999 $11,300 dwellings in Australia. $2,000,000 - $2,999,999 $22,700

Non-resident foreign persons are $3,000,000 - $3,999,999 $34,000 generally prohibited from purchasing $4,000,000 - $4,999,999 $45,400 established dwellings in Australia.

However, temporary residents can apply $5,000,000 - $5,999,999 $56,700 to purchase one established dwelling to use as their residence while they live in $6,000,000 - $6,999,999 $68,100 Australia, although on the condition the $7,000,000 - $7,999,999 $79,500 property is sold when it ceases to be their principal place of residence. $8,000,000 - $8,999,999 $90,900

Once a property has been identified to $9,000,000 - $9,999,999 $102,300

purchase, an application must be made $10,000,000 or more tiered per million to the Australian Foreign Investment Review Board (FIRB).

It is highly recommended that an application is submitted prior to the advance of any transaction—to ensure complete legality of the purchase. The FIRB provides an interactive fee Additionally, approval from FIRB is estimator. property-specific—one application per property. Duty Surcharge

When the application is submitted, the The Queensland state government government investigates to ensure that imposes a duty surcharge for foreign the purchase of the property will be in the investors, payable in addition to general country’s best interest. state-based transfer duties known as the Additional Foreign Acquirer Duty. A decision on the application is made within 30 days—unless complications or Since 1 July 2018, foreign purchasers are alterations occur, in which it may take up required to pay an additional 7% of the to 90 days. sale price.

Other states with foreign investor duties Foreign Investor Application include New South Wales (8%) as of 1 Fee July 2017, Victoria (7%) as of 1 July 2016 and Western Australia (7%) as of All foreign investors must pay a fee 1 January 2019. before their foreign investment application will be processed.

Foreign investors are required to pay Duties payable by Foreign $5,600 to purchase a new property if Investors, Residential property valued under $1 million, with additional Based on Property Value, AUD, Payable in addition to general state-based transfer duties fees payable per million in the value of the property. Queensland; including Gold Coast

Duty Surcharge on Purchase Price; This fee does not provide any assurance 7% from 1 July 2018 of securing the property and strict penalties are applied for those who breach the rules.

16 FOCUS ON GOLD COAST Q1 2019 RESEARCH

Estimated Property Purchase Costs, Gold Coast All costs represented in AUD, As at 1 January 2019

Purchase Price 350,000 500,000 750,000 1,000,000 1,250,000 1,500,000

Transfer Duty 3,500 8,750 19,600 30,850 45,230 59,600

Land Transfer Fee 790 1,310 2,190 3,060 3,940 4,810

Legal Fee (includes GST payable) 1,500 1,500 1,500 2,000 2,000 2,000

Mortgage Application Fee 190 190 190 190 190 190

General: Estimated Total Costs 5,980 11,750 23,480 36,100 51,360 66,600

Foreign Investor Application Fee* 5,600 5,600 5,600 5,600 11,300 11,300

Foreign Investor Duty Surcharge @7% 24,500 35,000 52,500 70,000 87,500 105,000

Foreign Investor: Estimated Total Costs 36,080 52,350 81,580 111,700 150,160 182,900

Estimated Property Purchase Costs, Gold Coast All costs represented in AUD, As at 1 January 2019

Purchase Price 1,750,000 2,000,000 2,250,000 2,500,000 5,000,000 7,500,000

Transfer Duty 73,980 88,350 102,730 117,100 260,850 404,600

Land Transfer Fee 5,690 6,560 7,440 8,310 17,060 25,810

Legal Fee (includes GST payable) 3,000 3,000 3,000 3,000 3,000 3,000

Mortgage Application Fee 190 190 190 190 190 190

General: Estimated Total Costs 82,860 98,100 113,360 128,600 281,100 433,600

Foreign Investor Application Fee* 11,300 22,700 22,700 22,700 56,700 79,500

Foreign Investor Duty Surcharge @7% 122,500 140,000 157,500 175,000 350,000 525,000

Foreign Investor: Estimated Total Costs 216,660 260,800 293,560 326,300 687,800 1,038,100

18 FOCUS ON GOLD COAST Q1 2019 RESEARCH

WHAT IS THE On the Gold Coast, costs and taxes ROLE OF AN associated with the ownership of a Additional Costs as property can vary dependent on the a Landlord OWNERS services the building provides. CORPORATION? Property Management Fees

General Costs Letting Fees are usually equivalent to The rights and responsibilities of two (2) weeks rent paid to the agent as a both the owners corporation and Land Tax fee for finding and securing a tenant. its members is different in each Management Fees cover any costs Land tax is an annual state tax that is state but generally comprise: associated with managing the property calculated based on the aggregated and range from 7% to 8.5% plus GST. taxable value of all land owned (or jointly  Maintain and repair the common owned) by an individual. Land Tax is not property of the strata scheme; applied if the property is your principal Utility and Service Charges  Manage the finances of the residence. The owner must pay for the use of strata scheme;

utilities (electricity, gas, oil and water Council Rates supply). Although if the owner leases the  Maintain required insurances property to a tenant, some of these can including public liability and This varies across states and local building insurance where be passed on but this must be stipulated government areas. This is the tax the applicable; within the tenancy agreement. However, council charges owners for the services the owner must pay for the actual to the property—generally paid quarterly  Keep records of all details of installation and initial connection costs. or annually. notices given under the relevant state strata management legislation; Income Tax Landlord Insurance Landlord insurance is designed  A strata register must be Income tax is payable on gross rental established and maintained, specifically to cover rental properties. income, less any allowable deductions detailing the owner’s name or Depending on the insurance provider, it incurred in earning that income. As there agent’s name and address for protects the home from damage, theft, each lot within the strata are a number of potential allowable severe weather or rent default in some scheme; deductions, it is recommended that an cases. To decrease risk, landlord Australian Tax advisor is consulted. insurance is highly recommended.  Administration of any by-laws for the strata scheme; Owners Corporation  To provide a grievance register. If the purchased property is Strata Titled Additional Costs for (a building with common areas and facilities for the use of all occupants of Foreign Owners the building), an owners corporation will be established for the building. Foreign-Owned Vacant Residential Property Levy A regular fee must be paid to the Owners The Australian government charges an Corporation to maintain these common annual levy for foreign-owned vacant areas. This can include elevators, foyers, residential property (ghost tax). The levy swimming pools and spa, gymnasiums, is equivalent to the FIRB application fee plants and foliage, lighting, staircases, imposed at the time the property was fences, visitor car parks and security. purchased if they fail to occupy or lease for at least six (6) months of the year. A group of elected people manage the operations and decision-making of the Absentee Land Tax common area of the property. Surcharge In most states, the owners corporation The Queensland state government has comprises of an executive committee imposed a 1.5% absentee land tax (generally individual owners of the surcharge for foreign investors. This is apartments) who make decisions on the payable in addition to general land tax behalf of their owners. and is based on the taxable value.

There are costs and taxes to consider when selling residential property in Additional Costs for Australia. Foreign Owners General Costs Capital Gains Tax Clearance Legal Fees Certificate Foreign and temporary tax residents are Legal fees include, but are not limited to, no longer entitled to access the CGT the costs for preparing a contract for main residence exemption from 7.30PM sale. The solicitor or conveyancer fee (AEST) on 9 May 2017. could be dependent on value of property,

and may vary between state and territory Although, existing properties held prior to as well as the particular solicitor chosen. this date will be grandfathered until 30 The cost may range between $2,000 and June 2019. $4,000, plus GST.

A CGT withholding rate for foreign Real Estate Agent Fees investors is applicable for all contracts An agent fee is the commission paid by with a market value over $750,000 when the owner, to the agent, for selling the signed on or after the 1st July 2017. property—either tiered rate or a fixed rate. Do ensure you understand the This requires 12.5% of the purchase breakdown of the fee structure as price to be withheld by the purchaser and commissions will vary between states, remitted to the Australian Taxation Office and price point. Fees often range (ATO) unless a clearance certificate has between 2% and 3% of the value of the been provided by the vendor. The money property sold. withheld is a portion (not in addition to) from the agreed sale price.

Marketing Costs If a purchase price negotiated between a When an agent is selected to sell the purchaser and vendor is on an ‘arm’s DOWNSIZER property, the fee breakdown will often length basis’, then the purchase price stipulate the budget associated to the may be used as a proxy for market value. INCENTIVE marketing and advertising of the property. Additionally, there may be a The ATO can only grant a clearance Downsizers (aged 65+ years) period allocated to marketing with certificate to a vendor who is considered can make a non-concessional multiple open house inspections over to be an Australian resident. (after-tax) contribution into their Superannuation account of up several weeks. Budgets for marketing, to $300,000 from the sale of media, as well as length of advertising Do note a residency status for tax their family home. should all be discussed with the agent to purposes is not necessarily the same as ensure maximum advertising potential. that for immigration purposes; or for the Introduced from 1 July 2018, FIRB. It is recommended to seek the legislation states the professional legal advice to further clarify property sold must be the Capital Gains Tax the residency definition for this person’s home (main residence Capital gains tax (CGT) is a federal tax and be eligible for the main legislation. residence exemption for capital levied on the gain or loss upon the sale of gains tax) and held for at least an investment property. The foreign resident CGT regime for the past 10 years. withholding tax applies to taxable The tax is implemented on the difference Australian property including vacant land, This will increase their tax-free between the cost of acquiring the buildings, residential and commercial fund limits. Couples will be able property, and the value when sold. The to contribute up to $300,000 property, leaseholds and strata title difference is then added to the income each, giving a total contribution schemes. per couple of up to $600,000. tax for the individual or company for that financial year, and taxed accordingly with For further information, contact the those rates. Australian Taxation Office.

20 FOCUS ON GOLD COAST Q1 2019 RESEARCH

In recent years, the federal and state governments have introduced foreign investor fees, tax surcharges and levies. Below is a summary of the current process for foreign buyers when purchasing, owning and selling Australian residential property.

The Process for Foreign Buyers when Purchasing, Owning and Selling Residential Property, Gold Coast As at 1 January 2019

BUYING

Check if the Applies to all Property-specific; Must be made Developer has a Australian APPLY TO FIRB one application prior to purchase Exemption residential per property Certificate properties

+ PAY FIRB Above If within several APPLICATION FEE Below = $11,300 + fees Contact ATO if categories the based on AU$1M = $5,600 are tiered per over $10M highest fee value million applies

Decision is Must be in the Approval or fee AWAIT FIRB Strict penalties normally made best interest of does not secure APPROVAL occur if in breach within 30 days Australia sale

Qld TRANSFER DUTY (incl. Brisbane & SURCHARGE Gold Coast) on market value = 7%

OWNING

AUSTRALIA > Equivalent to not genuinely on VACANT Applicable if application fee Annual levy rental market for RESIDENTIAL vacant or paid at time of 6 months of year PROPERTY purchase

Imposed if Absentee Owner Qld > taxable land is = 1.5% $350,000 +

SELLING

A clearance Clearance CAPITAL GAINS TAX 12.5% of the Applicable to all certificate must certificates (CGT) on market purchase price contracts over be provided by granted to Aus. value withheld $750,000 the vendor residents

The Gold Coast LGA population has been significantly rising. Over the year ending June 2017, an increase in the estimated resident population was recorded at 2.7% to 592,350 persons. According to the Australian Bureau of Statistics (ABS), this is well above the overall Australian population growth of 1.6% and on par with the rate

of population growth in Melbourne. When compared to the Australian capital cities, SIGNIFICANT the Gold Coast LGA population is ranked the 6th largest, ahead of Canberra, Hobart POPULATION and Darwin. According to Queensland Treasury projections, the Gold Coast LGA GROWTH. population is projected to grow annually by 2.2%, to 866,650 persons by 2036.

A demographic shift is occurring on the Gold Coast with compounding growth in the number of residents aged 65+ years. This age group represented 14% of the Gold Coast LGA population in 2011 (73,000) to stand at 91,400 residents in 2016; growing to a 16.4% share. By 2036, it has been projected by the ABS this group will grow to almost double (174,000 residents) and represent 20.2% of the population; overtaking the number of residents aged 30-45 years. The 65+ years cohort are fast becoming attune to the apartment lifestyle, enjoying the amenity, retail and transport within DOWNSIZER close proximity. The pressure on apartment supply in good locations will only ramp DEMAND. up with the upward trajectory in the ageing population.

The total wealth of Australian High-Net-Worth individuals (HNWIs) continues to rise. The Gold Coast saw more than 1,000 net inflow of HNWIs in 2017; taking more than one-tenth of Australia’s 10,000 new HNWIs each year, according to New World

Wealth. By definition, this is someone with net worth of US$1 million, excluding their primary residence. Australia remains the top country ranked by HNWI net inflow for WEALTH the third consecutive year. FLOWS.

The number of international students enrolled to study in Queensland education facilities rose 9.6%, in the year ending June 2018, according to the Department of Education and Training. Higher education facilities saw growth of 9.8%, while international school-aged students grew 7.5%. The Gold Coast is fortunate to GROWTH IN accommodate three world-class university campuses and numerous private schools INTERNATIONAL accepting international students. The SSVF has made the process of applying for a student visa in Australia easier to navigate for both students and guardians. STUDENTS.

International departure capacity at the Gold Coast Airport expanded by 56.2% between 2012 and 2017 as reported by OAG Schedules Analyser. This is earmarked to grow further opening more routes to South-East Asia in the coming years. RISE IN Tourism Australia calculated a growth in international visitors on the Gold Coast by INTERNATIONAL 3.8% over the year ending March 2018, with a little over 1.1 million visitors. VISITORS.

22 FOCUS ON GOLD COAST Q1 2019 RESEARCH

Gold Coast LGA houses and apartments are relatively well-placed for value across the major Australian capital cities. The median value for an apartment in September 2018 was $425,000 on the Gold Coast, whilst Sydney was $734,800 and Melbourne $496,500 according to APM. This was similar for houses on the Gold Coast with the RELATIVE VALUE TO median value being $620,000; significantly lower than Sydney ($1.1m) and OTHER MAJOR Melbourne ($853,000). The Gold Coast is firmly back on the radar for those now priced out of the these cities. CAPITAL CITIES.

The second strongest annual capital growth was recorded for Gold Coast apartments across the six major cities, at a sustainable 1.2%, in September 2018.

This exceeds the annual national average of –1.4% and falls slightly behind APARTMENT Melbourne at 1.5% (APM). CAPITAL VALUE GROWTH.

Gross rental yields on the Gold Coast have gained strength of 10bps over the two years ending September 2018, to stand at 5.80% for apartments, bucking the

national downward trajectory (APM). Over this same time, Gold Coast median rents moved from being $390 to $420 per week, total growth of 7.7%. RENTAL YIELDS REBOUNDING.

The Gold Coast experienced one of the lowest vacancy rates in the country at 1.7% in September 2018, well-below the Australian weighted average of 2.6% (REIA). The consistent population growth coupled with limited new housing supply being

constructed has seen the vacancy rate trend below market equilibrium (of 3%) since LOW VACANCY AND December 2012 (REIQ). The undersupplied Gold Coast market has averaged a LESS APARTMENTS vacancy rate of 1.9% since this time, pushing up median apartment rents 1.3%, on BEING BUILT. average, per quarter.

The Knight Frank Wealth Report 2016 identified residential hotspots likely to enjoy market outperformance over the coming years, led by economic and employment growth, new infrastructure, regeneration, quality of education, environment and lifestyle. Gold Coast was recognised globally as a top second-home destination, with infrastructure investment with the G:Link light rail, Commonwealth Games GLOBAL facilities (held in 2018) and proposed airport expansion. Competitive prices, when HOTSPOT FOR compared with Australia’s top cities, plus strong fundamentals – local population SECOND HOMES. growth and expanding tourism –will underpin demand along the 57-kilometre coastline.

RESIDENTIAL RESEARCH Michelle Ciesielski Director, Head of Residential Research, Australia +61 2 9036 6659 [email protected]

Ben Burston Partner, Head of Research & Consulting, Australia +61 2 9036 6756 [email protected]

RESIDENTIAL Sarah Harding Partner, Head of Residential, Australia +61 2 9036 6752 [email protected]

RESIDENTIAL SITE SALES Paul Henley Partner, Head of Commercial Sales, Australia +61 3 9604 4760 [email protected]

VALUATIONS & ADVISORY Knight Frank Residential Research provides strategic advice, consultancy services and RESIDENTIAL forecasting to a wide range of clients worldwide including developers, investors, Chris Hill funding organisations, corporate institutions and the public sector. All our clients Partner, Head of Residential Valuation and Advisory, Australia recognise the need for expert independent advice customised to their specific needs. +61 438 807 249 [email protected]

MEDIA ENQUIRIES Rebecca Sands Director, PR & Communications, Australia +61 2 9036 6833 [email protected]

Focus On Sydney Focus On Melbourne Focus On Brisbane Focus On Perth Q1 2019 Q1 2019 Q1 2019 Q1 2019

Branded Residences Australian Residential Australian Prime The Wealth Report Report 2019 Review Q4 2018 Residential Review 2018 2018

Knight Frank Research Reports are available at KnightFrank.com.au/Research

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