This article is from the Australian Property Journal archive
THE Gold Coast’s apartment market will continue to experience an undersupply unless companies embrace the developer-builder model in greater numbers, while the state and federal governments will need to boost support for construction labour numbers as south-east Queensland gets set for an infrastructure boom leading into the 2032 Olympic and Paralympic Games.
Around 1,000 apartments were launched on the glitter strip in FY2024 with an additional 1,100 apartments commencing construction, according to Charter Keck Cramer’s State of the Market report. Both launches and commencements have come off their respective peaks in 2022 and 2023 as the market has moderated, despite ongoing demand from seachangers, treechangers, and rightsizers.
“It’s been happening a lot in Sydney for the last cycle or more – a big developer has a building arm and they can control costs and product and brand and keep everything in-house. What’s happening on the Gold Coast right now is developers are getting the sales, they’re getting the finance, but they’re going to the market and the third-party build is not available to build,” Charter Keck Cramer national executive director of research, Richard Temlett told Australian Property Journal.
“The developer-building model is the type of model that can work very well and some developers are starting to do that in the Gold Coast out of sheer necessity, otherwise they’re not going to get their projects built out.”
Temlett said an impost to companies embracing the model – even if they were financially able to – was “actually just getting the expertise in-house”.
Rightsizers driving southern Gold Coast market
This cycle has seen the emergence of the apartment market in the southern portion of the Gold Coast, with higher end smaller scale downsizer projects receiving strong demand in locations such as Burleigh Heads, Palm Beach and Coolangatta from “rightsizers”. This is in contrast to the typically larger scale apartment projects historically delivered in the glitz and higher amenity centralised locations such as Surfers Paradise and Broadbeach.
“Downsizers and, baby boomers on the Gold Coast, are often rightsizers, looking to the right size, age and place. They’ve got money that they’ve made from their detached dwellings.
Temlett said the concept of rightsizing on the Gold Coast could be broken down into further categories.
“Baby boomers and downsizers typically have a large house. They’ll sell the house. They’ll go into a smaller apartment. What we’re finding is there’s actually a lot of buyers, especially on the Gold Coast, that are doing the opposite. They’re buying more space. They’re going to these enormous apartments because they can afford it, often bigger or the same size as their house, which is quite different to typically what you observe in Melbourne, Sydney or Brisbane, where they’re normally downsizing space.
“There’s the rightsizers in the market that are actually upgrading space, and that’s the really higher, luxury-end project that are full-floor apartments, four or five levels or so. It’s not so much unique, but it’s happening quite a lot in the Gold Coast.
“There’s the other segments of the rightsize market, that are still downsizing from a larger house to a smaller apartment, but they’re still very nice apartments. They’re not the investor-grade apartments.
“People on the Gold Coast are going, well, I want something that’s more functional and maintainable for me, but I don’t want to necessarily lose all the space. And so they lose some space in obviously not having a garden, but the actual size of the apartment is bigger than the size of the house.
“That was going to occur on the Gold Coast, it’s just been brought forward as a function of the pandemic –, probably by a market cycle.”
Labour shortage risk
Temlett said that much like Brisbane’s apartment market, there is going to be the major risk leading up to the Olympics of competition for both labour and materials.
There is a $7.1 billion venue infrastructure program in place for the 2032 Games.
“Definitely what the Queensland government should do is what the Western Australian government is doing with its visa subsidy program and actually getting skilled workers,” Temlett said, referring to Western Australia’s visa subsidy program in which the state government essentially sponsors tradies to come in and pays the visa fees.
“The risks are very similar on the Gold Coast as they are in Brisbane.
“Similar to Brisbane, the state government can’t underestimate all that infrastructure coming in and the pressure it’s going to put on the building industry. The building industry needs to be supported and the actual capacity of the industry needs to be expanded by getting skilled workers in – there’s already a housing shortage in in that area of Australia.”
Australia as a whole needs an additional 83,000 tradies to meet the National Housing Accord target of delivering 1.2 million homes over the next five years, according to the Housing Industry Association.
Data from the National Centre for Vocational Education and Research showed building and construction apprenticeship numbers have plummeted by a further 22% year-on-year.
May’s federal budget included a $91 million investment to increase the building and construction workforce numbers.
