Forget boom and bust as Gold Coast apartment market stabilises: Knight Frank

Forget boom and bust as Gold Coast apartment market stabilises: Knight Frank
Forget boom and bust as Gold Coast apartment market stabilises: Knight Frank

The Gold Coast unit market is becoming more solid and steady, according to Knight Frank.

Chris Litfin, Knight Frank project marketing head, said there had been changes in the market in recent years, including a move towards smaller developments.

This was adding less supply and with buyers taking more time to make decisions had led to more stability.

She says: "previous property cycles were generally centred around major developments with many hundreds of apartments in single buildings – as an example, Soul had around 300, Oracle had around 500 and Circle on Cavill delivered over 600."

"But generally the buildings being built at the moment are a lot smaller than they used to be. Some have a few hundred apartments, but most are around 100 or less."

An example she gave was Broadbeach, in which only two of the seven apartment developments – Qube (pictured below) and Signature - have over 200 apartments, with the remaining Broadbeach projects – Vue, Koko, Ivy95, Elysian and Opus - delivering around 100 apartments or less.

Forget boom and bust as Gold Coast apartment market stabilises: Knight Frank.

"Now there is less total supply across seven developments in Broadbeach, for instance, than there was across a few developments in the late 2000s, and it’s normal for buyers to take between six weeks and two months to make a decision due to the added choice, rather than the few weeks they took back then."

"They’re comparing these developments carefully, looking at the facilities on offer and the location, and doing thorough research before buying."

Litfin said overall, the Gold Coast residential apartment market was now much more stable, with two of the stabilising factors being the moderation in supply and region’s growth in population, which has resulted in steady long-term demand.

In 1960 the Gold Coast had a population of 50,000 and now it’s more than 600,000. 

"The older population on the Gold Coast is growing significantly, which is only going to add to the demand for apartments," Liftin concluded

The Australian Bureau of Statistics data from the 2016 Census shows the over-65 demographic made up around 16% of the total population, but by 2036 the population is expected to double, accounting for over 20% of the total.

Forget boom and bust as Gold Coast apartment market stabilises: Knight Frank

The latest Knight Frank Australian Residential Development Review 2018 also found apartment stock on the Gold Coast is being built to cater more for owner-occupiers, with a move towards more bedrooms.

It found two-bedroom apartments have been favoured in developments built between 2014 and 2017, making up 43% of total stock, followed by one-bedroom apartments (39%), three-bedroom apartments (15%) and studios (3%).

But it further found that of the buildings under construction there is a trend towards less one-bed apartments being built – making up only 25% of stock - in favour of more two-beds (49%), three-beds (17%) and studios (4%). Four-bedroom apartments are expected to grow to a share of 4% of all new completions in 2018-21.

While the Gold Coast apartment market is seeing strong activity from downsizers, Litfin says, "it's only a matter of time before investors – particularly those from interstate - started becoming more active".

The apartment market had the highest gross rental yield for major cities along Australia’s East Coast of 5.8%, according to figures from Australian Property Monitors, and vacancy rates were the lowest in the country, sitting around 1%, according to REIQ figures.

Tags: 
Gold Coast Apartment Market

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