The Real Estate Investment Market - Gold Coast

Queensland is the fastest growing state and is home to 4 million people – 20% of Australia’s population. In recent years, Queensland has accounted for 33% of the nation’s population growth. The main drivers of this exceptional growth have been a surge in the state’s economy from increased export activity, and the numbers of those who have moved from the southern states to seek the more relaxed lifestyle Queensland offers (around 1,000 new residents each week).

According to the latest Midwood report, approximately two thirds of interstate migrants to Queensland choose South East Queensland as their destination. The report further predicts that this movement will more than likely continue for the foreseeable future. In fact this “rush for the sun” has made South-east Queensland one of the fastest growing regions in the world. A recent study of population trends in Australia, the US and New Zealand by accounting firm KPMG found that South-east Queensland was beaten by only Phoenix in terms of population growth as people continue to press into the so-called sunbelt regions. Consequently, demand for housing in this region is expected to continue to be quite high. Housing prices should continue to show growth over the next few years and rental yields are predicted to remain quite stable.

The “jewel in the crown” for South East Queensland is the Gold Coast, now the largest city outside the five mainland State capitals.

The cities features are:

• An attractive lifestyle coupled with a superb sub-tropical climate
• Safe, friendly communities who have enthusiasm for life, change and a willingness to achieve
• Extensive cultural, social and sporting amenities
• Quality education provided through public and private schools and universities
• Modern and affordable health services which are amongst the best in the world
• Competitively priced housing and industrial land
• Proximity to the Asia-Pacific region
• A growing skilled and educated workforce, with competitive labour costs
• World-class modern infrastructure

These features are driving the city’s population growth to record levels as Brisbane commuters take advantage of the world class Pacific Motorway to live on the Gold Coast.

China’s Real Estate Investment At Crossroads

China’s real estate market recovered rapidly in 2009, becoming one of the major driving forces for economic recovery during the global crisis.

However, real estate developers’ luck seems to have come to an end. On Jan. 9, China’s State  Council published new policies to strengthen the supervision of the real estate sector.

The new policy, known as the “11 Measures”, aims to restrict speculation in the real estate market. A 40% down payment  is required for purchases of second homes, whether the purchase is made to improve living conditions or on speculation.  The purchase of a first home requires a down payment of 20%.

Speculation contributed greatly to China’s real estate boom. The country’s rapidly growing middle class considers buying  property to be an effective way to beat inflation. China’s manufacturers, who suffered from the global crisis, withdrew their  money from the manufacturing sector and invested in the real estate market. Thus property prices went out of control and  rose rapidly in the second half of 2009.

The “11 Measures” reflect the Chinese leader’s determination to control property prices. In December 2009, Prime Minister Wen Jiabao said that the central government had noticed the rapid increase in property prices. He added that  the real estate market needs a market mechanism as well as government control. On Jan. 19, Wen reaffirmed the goal of  inhibiting speculation and investment behaviour in the real estate market.


Every time China’s central government has tried to control real estate prices, it has succeeded. In 2007 China saw property prices rise more in the first ten months than in the period from 2000 to 2006. In October, the government issued policies to counteract the increase. In the first half of 2008, more real estate policies followed, and the government adopted tight monetary policies. These  actions resulted in decrease in property prices in late 2008 and early 2009, and brought the real estate industry to a predicament.

Figure 1. The year-on-year growth of property prices in 70 major Chinese cities from 2007 to 2009

Source: National Bureau of Statistics of China
Now China sees certain economic recovery and plans to exert control over the real estate sector again.



The “11 Measures” is not the only method adopted by the government to  control prices. China’s Ministry of Finance raised the sales tax for secondhand houses effective Jan.1, 2010. The Ministry of Land and Resources plans to strengthen regulations to prevent land hoarding in 2010. These two ministries also raised the down payment for land from between 20% and 30% to 50%.

The People’s Bank of China, the nation’s central bank, on Jan. 12 declared an increase in the required reserve rate of 0.5 percentage points. This action signals that China is moving away from its loose monetary policy and raised the question of whether there is enough money to support China’s real estate market, which is one of the biggest financial bubbles in the world.

Are China’s policies effective in influencing the real estate market? The policies have already resulted in expectations of falling prices in the real estate market, thus inhibiting speculation. Potential buyers are increasingly choosing to postpone purchases in the hope of lower prices. Beijing and Shanghai are the benchmark cities of China’s real estate industry. In the first half of January 2010, house sales decreased by 56.6% month on month in Beijing and 53.0% in Shanghai.

Besides those measures taken, the central government has not implemented the property tax, which may be the most effective measure to curb the soaring property price in China. Since 2003, the country has been running a property tax simulation in some cities, and is likely to institute a property tax at the beginning of 2011. The tax will increase the cost of holding property,
and thus the burden of speculators, significantly. The property tax will shock China’s real estate market.

However, local governments, which rely heavily on land sales and construction fees and taxes for funds, do not want property prices to fall. According to a report released by the China Federation of Industry & Commerce in 2009, government costs (land, fees and taxes) account for 49.4% of a real estate company’s total costs. Therefore, local authorities have no motivation to reduce property prices.

Nevertheless, local authorities still have to comply with central government policies. In 2010, as China’s economy continues recovering, the country will surely tighten up its monetary policy step by step.  Microeconomic control and monetary policy have affected the real estate sector in the past, and will determine its future

The contributors are research analysts with China Knowledge Consulting.
The firm provides businesses seeking business opportunities in China.
Opinions expressed are their own.

By Grace Tian, Tony Wang 26 Jan 10
(Article Reproduced from following URL)

http://www.chinaknowledge.com/Newswires/CA_Detail.aspx?cat=BIZ&ID=216

The Gold Coast Lifestyle

The Gold Coast is Australia's 6th largest City and the region is proving increasingly attractive to investors, migrants, leisure and business travellers. It is one of the fastest growing cities in Australia and shares the title with Brisbane as one of the most desirable places in the world to live, ranked on political, social, economic and environmental factors, personal safety and health. Spanning two local government areas – Gold Coast City and Tweed Shire Council – the population tops just under 500,000 in one of Australia's fastest growing communities. The population is expected to tip 700,000 residents by 2021.

Famous for its weather boasting 287 days of warm, bright sunshine per year! Summer is from December to February with an average temperature of 19-29 degrees Celsius (66 to 83 degrees Fahrenheit). Winter is from June to August with an average temperature of 9 - 21 degrees Celsius (48 to 69 Fahrenheit). The subtropical climate with an average water temperature of 22 degrees encourages an outdoor lifestyle anytime of the year.

About Real Estate World Group

The Real Estate World Group Team is led by Manager Director David Lamers.

Returning to Real Eestate World Group full time after a recent stint as General Manager of Ray White Shanghai, David Lamers' ealier experience includes several years in a senior capacity with leading Real Estate Agencies in Queensland where he significantly grew sales in many key projects which the companies were marketing.

David has received many awards for outstanding sales in Real Estate. David’s determination and drive has made him a force in the international Real Estate Property Market. He has developed key relationships witha wide range of  high profile Developers and Agencies world wide.

David has also spent several years in China building relationships with players in the Chinese/Australian property market.

David and the team at Real Estate World Group bring many years of cumulative experience to their role of helping International and Australian investors find quality prestige properties at the right price. Our range of industry contacts and specialised experience makes us uniquely situated to make the challenging process of finding the ideal property investment smooth sailing for the astute investor.

Self Managed Super Fund (SMSF) and Property Investment