Why this original 1970s Gold Coast home just sold for $6.5 million

Getting into beachfront real estate on the Gold Coast just got harder.

This very original 1970s beach house may look like your average suburban home but this week it changed hands for an eye-watering $6.5 million.

Proving it’s anything but ordinary, 25 Hedges Avenue, Mermaid Beach was snapped up by a mystery buyer in an off-market deal brokered by Michael Kollosche of Kollosche Prestige Agents.

While the house may not look $6.5 million, it’s all about the location – set on Mermaid Beach‘s Millionaire’s Row, it happens to be positioned on a stretch of beachfront that is quickly becoming priced out of most people’s reach, including cashed-up Sydney and Melbourne buyers.

But if you think 15 metres of absolute beach frontage on a 607-square-metre block is expensive now, $6.5 million is going to look cheap in no time, Mr Kollosche says.

“There’s still a lot of forward growth in these assets,” he says. “People will be looking back on these prices in two years time saying that these prices were such good value.

“The Mermaid Beach market is very tightly held and so property prices are performing stronger and stronger, month on month,” Mr Kollosche says.

Earlier this year, 25 Hedges Avenue made headlines when a local buyer pulled out of a contract, forfeiting their $100,000 deposit in the process.

• Related: Chinese buyers on Gold Coast spree
• Related: What’s behind the Gold Coast boom
• Related: Nearly $7 million profit in two years

They then went 600 metres up the street and bought a vacant block at 127 Hedges Avenue for $6.3 million instead.

A new buyer came forward not long after, despite the property having been taken off the market, quickly making an offer and the deal settled this week.

Not surprisingly, the new owners plan to demolish the two-level brick house to make way for a brand new multimillion-dollar beach mansion, which they will eventually make their principal place of residence.

Land on the beachfront is at a premium, even more so than existing houses, Mr Kollosche says.

David Henderson, one of the owners of 2013 Melbourne Cup winner Fiorente, recently reduced the price of his sprawling beachfront mansion at 187-191 Hedges Avenue to $16,995,000.

It was previously listed at nearly $20 million and so far hasn’t found a buyer, however Mr Kollosche believes properties like this, which cost Henderson $13.65 million for the land alone, will be worth $30 million in the near future.

“Smart buyers will move in on properties like that because it represents excellent value,” he says. “The number of buyers does narrow as you go up in price but it’s worth waiting.”

Domain Group chief economist Andrew Wilson says the Gold Coast has now surged ahead of Brisbane and the Sunshine Coast.

“It’s clearly out on its own … We’ve got the Gold Coast up around about 8 per cent on a year-on-year basis at the moment, while Brisbane and the Sunshine Coast are about 4 to 5 per cent,” he says.