This article is from the Australian Property Journal archive
GOLD Coast apartments are expected to remain in high demand, after supply plummeted to a record over the first quarter.
According to the latest data from Urbis, there were just 411 new apartments still up for grabs at the close of the March quarter, the lowest volume recorded by the consultancy since they began tracking the market in 2014.
“The key statistic this quarter is the drop in the number of apartments for sale to a record low, which shows the supply side is still failing to keep up with demand. It’s unclear whether the supply shortage had any bearing on overall sales for the March quarter as the urgency to buy that we saw in 2021 is showing signs of easing,” said Lynda Campbell, director at Urbis.
As a result, even with the quarter seeing a significant drop off in new apartment sales compared to the same period in 2021, falling from 743 to 377 over the year, the coastal city is still facing a shortage of apartments, despite 11 new projects launching in the quarter.
“Sales have certainly eased off their 2021 highs in the latest quarter, but that’s not unexpected considering the high levels achieved last year,” added Campbell.
2021 marked a record year for new apartment sales for the Gold Coast, with 2,492 transactions, compared to the previous average 1,100 new apartments per annum, with the first quarter of the year alone seeing almost $800 million in new apartment sales.
Sales in the March quarter were actually lower in volume than last year’s lowest quarter, with 450 sales recorded over the three months to June.
Though, if these results were repeated throughout the course of the year, 2022 would still become the third greatest year on record for new apartment sales, following 2015’s high of 1,600.
“However, there are several large projects coming to the market and we will be watching these sales closely as the market digests rising interest rates and any new initiatives at the federal level,” said Campbell.
While the market will see this boost in stock from large-scale projects set tp launch throughout the year, currently quarterly sales rates suggest that the Gold Coast has just 3.3 months of supply left.
“The obvious concerns surrounding construction costs and supply chain issues means that we do not expect to see as many projects make it out of the ground as in previous years while volatility and viability are managed,” added Campbell.
Campbell also noted that the dominant buyer type in the market is still comprised of owner occupiers who are looking for expansive apartments, with 31% of all sales in the quarter at a sale price greater than $1 million.
As far as precincts in the city, the Central precinct—including Southport, Surfers Paradise and Broadbeach—saw the greatest share of sales with 243, while North Shore accounted for 90, all of which were in Hope Island.
At the same time the Southern Beaches precinct saw a decline over the period, reaching a its lowest volume since late 2017 at just 27 sales. This is at least partially a result of tight supply, with just 67 apartments still on the market by the close of the period.
