This article is from the Australian Property Journal archive
THE Gold Coast apartment market has recorded the highest volume of sales in more than 18 months, whilst Brisbane is slowly picking up.
According to Colliers International, sales volumes in the March quarter jumped 18%, breaking through the 200 sales barrier for the first time since June 2008.
There were 230 new apartment sales recorded, representing a 103% increase from the 113 sales reported in the same period in 2009. Conversely, supply levels fell by 26% to 1,707 apartments, which is the lowest figure recorded for five years, since December 2004.
The report found that based on the current selling rate, there is 1.8 years of supply, a significant reduction from the 4.8 years recorded during the March 2009 quarter.
Gold Coast project marketing director Brinton Keath said the increased sale rate and continued decrease in supply was a positive sign of market recovery.
“If the current upswing in sales numbers continues, we would expect to see pressure on supply levels within the next twelve months, particularly if no new projects are introduced to the market,” he added.
Gold Coast research manager Lynda Campbell said the high-rise sector has been the standout performer for the quarter, recording 169 of the 230 sales across the Gold Coast and Tweed Coast – the best figure recorded since the June 2008 quarter.
Gross sales value reached $143 million, with an average price per high-rise apartment of $849,395.
“This is a dramatic decline from the figure recorded during the December 2008 quarter of 11 years, and is a reflection of the increased sales rate,” she added.
Brisbane’s apartment market is continuing to gain momentum, having moved on from the economic slowdown in recent years.
Colliers research found that price remains the leading driver which impacts the success or failure of any residential project.
Within Brisbane’s ‘inner ring’, spanning the 5km radius from the CBD, there was a weighted average of $650,225 across the 244 unconditional sales recorded – a 4% increase from the December 2009 quarter – yet 3% below the same period 12 months preceding.
This analysis suggests that the off-the-plan market appears to have stabilised around the $600,000 mark, as sales remain consistently steady and there is limited weighted average change between quarters.
“This takes into consideration the bigger picture of the current market, primarily, a global economy which is overly volatile and extremely reactive to changes in international markets
“If new projects do not cater for the shifts in market demand for cheaper stock in the sub $500,000 price point but rather, continue to oversupply a softer middle market of $600,000 to $800,000 apartments, it will be difficult for the Brisbane real estate market to reach its full potential Brisbane research manager Lachlan Walker.
Walker said the market remains supply led.
The March 2010 quarter wrapped up with 1,102 new apartments available for sale in the ‘inner ring’. According to the report, the ‘Inner North’ was the top performing precinct, accounting for 62% of the year’s total.
Walker said demand was firmly focused on one and two bedroom stock during the March quarter, which between them totaled almost 100% of sales for consecutive quarters.
Residential project marketing director Ben Langfield the pipeline remains strong with around 3,000 new apartments predicted to enter the sales cycle through 2010.
“Price, however, will be the telling factor, being the leading driver which impacts the success or failure of any residential project currently in the market.”
“Moving forward, if apartment prices are not taken into consideration, and position to target the correct purchasing demographic, Brisbane may quickly become oversupplied,” he added.
“Competition amongst purchasers may occur for the first time in 2006, within the Brisbane market as these are released to the public,” Langfield concluded.
Australian Property Journal
