Gold Coast developers optimistic, despite slow sales

Developers are optimistic about demand for new housing on the Gold Coast picking up over the next 12 months despite another lacklustre quarter.

Currently only two projects are selling more than eight lots per month, however 12 projects aim to sell at that rate next year, according to the latest Prodap report, a regular survey of over 150 active developers operating on the Gold Coast.

The projects to achieve sales of more than eight lots per month over the September quarter were Delfin Lend Lease’s Woodlands development at Waterford, which recorded 38, sales and Stockland’s Highland Reserve project in Upper Coomera, which recorded 25 sales.

One of the historically best-performing estates, The Observatory at Reedy Creek being developed by Stockland, recorded only 10 sales in the quarter, with plenty of stock remaining.

However a “surprisingly high number of developers expect to produce in excess of 100 lots over the next 12 months. This reflects an average sales rate of eight per month per project”.

The pick-up in residential land development is expected despite there being over 1,300 lots available for sale on the Gold Coast representing about 13 months’ worth of supply.

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Developers expect to increase their supply of new lots over the next 12 months ending September 2012 to be equivalent to two and a half years of supply at the current take up rate.

“Perhaps the developers are anticipating a revival of sales, or perhaps they are just being optimistic about their own particular project,” says Bill Morris, author of the report.

This rate of new development could be even higher if the Commonwealth Games bid is successful. The successful bidder will be announced on November 11.

“A Gold Coast win will have a huge impact on employment over the next six years, with a budget of $2 billion allocated by the state government for new facilities,” says Morris.

“The core of these facilities will be a competitors' village to house an estimated 5,000 competitors in studio apartments.

“The site for the village is to be at Parkwood on the existing trotting and greyhound club land.”

Currently though sales continue to wallow at record lows, stock levels are not oversupplied even at the low sales level, and packaged housing production is low, putting upward pressure on rents.

Low sales levels are attributed to low interstate migration into Queensland ( less than 10,000 per year), which is affecting the demand for Gold Coast housing generally.

The suburb of Upper Coomera, where Coomera Waters is being developed by Austcorp, achieved the greatest number of land sales over the quarter at 68 while Pimpama recorded the highest number of house and land package sales with 17.

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Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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