Gold Coast: Apartments Research & Forecast Report Second Half 2012 – Apartment market heading towards a recovery
Here is a brief overview of the Gold Coast apartment market prepared with comments from author Lynda Campbell, Colliers International Research Manager the report highlights a number of trends from the Colliers International Apartments Research and Forecast Report – Second Half 2012
The report pinpoints the news that after hitting a low in December 2011 a lift in sales for a third consecutive quarter indicates that the new apartment market on both the Gold Coast and the Tweed Coast is heading towards a recovery.
The September quarter this year recorded 140 sales across high, medium and low-rise sectors, which was an increase of 5% on the previous quarter and 43% on the same period last year.
Although not yet evident, with an impending drop in supply there is now some expectation that this will lead to strengthening prices at some point down the track.
The number of new apartments on the market is sitting at its lowest level in nine years, with some areas having virtually no stock, particularly those areas on the southern Gold Coast. This trend is reinforced by the fact that no significant new stock entering the market in the short term and so availability will continue to fall and improve market confidence.
And as we have seen in other markets reductions to interest rates this year had also contributed to improving confidence on the Gold Coast. Visitor numbers to Surfers Paradise and Broadbeach are also up which is always a welcome economic boost.
Potential investors and owner-occupiers who take a ‘wait and see’ approach might be wise to see this stage of the market as a turning point that may not repeated for some time.
Lynda Campbell said the number of new apartment projects on the Gold Coast was continuing to decline.
“Five years ago there were 87 projects being actively marketed, but that was reduced to 50 by the end of 2011,” she said.
“With the sellout of 13 projects to date this year, and the removal of three projects due to apartments being put in rental pools, there are now only 40 projects on the market. These 40 projects contain a total of 3,854 apartments, 72 per cent of which are sold.
“Only seven projects have substantial stock levels – more than 50 apartments – remaining for sale, with the majority of buildings now selling down their final apartment stock.”
Ms Campbell said there were only two new apartment projects that had been added to the market this year – one medium rise (Mistral at Harbour Quays in Biggera Waters) and one low rise (Sykes Apartments at Southport), which had total of 75 apartments.
“The only projects that may possible be added during the remainder of the year and going into 2013 are Synergy at Broadbeach, the second stage of Pavilions at Palm Beach, a further stage of Emerald Lakes at Carrara and the next stage of Mistral at Harbour Quays.
“The Gold Coast currently has no major high-rise projects being marketed off the plan.”
While there were several new apartment projects mooted for the Gold and Tweed Coasts, in reality it was unlikely any significant numbers of apartments would be brought to the market in the near term.
According to Tony Holland, Colliers International Residential Project Marketing Director developers continue to deal with issues of approvals and finance, again this is another common theme we have noted all year, as are moves to improve planning.
“Changes within the Gold Coast City Council and the introduction of its Construction Kickstart program should bring some projects to market sooner than previously expected, but it will still be some time before we see multiple cranes on the horizon.”
However the projects that are most likely to enter the market in the near future are located at Broadbeach, Palm Beach, Carrara and Varsity Lakes, which will leave the southern Gold Coast with critically low levels of new apartment stock.
The final market up-date for Sydney to follow.