Gold Coast property market turning around strongly as stock levels fall: Andrew Bell

Expectations that the Gold Coast is heading for a massive oversupply  of apartments have been greatly overstated, according to Andrew Bell, CEO of Ray White’s Surfers Paradise Group, who believes the market is beginning to turn around.

“Over the past two years all forecasters and researchers predicted an oversupply of high-rise apartments, with one prediction of five years’ oversupply,” says Bell.

“These forecasts completely misread the market,” he says.

Coming on the back of an attack from Channel 7’s David Koch, who called the Gold Coast and Sunshine Coast “catastrophes”, Bell says there has been no shortage of buyers at the start of 2012, with his office notching up 50 sales in Oracle, the luxury apartment development on Broad Beach, in the first six weeks of the year.

Bell also highlights research by the Midwood Group showing there were 73 apartment sales in the quarter to November 2011, the highest in 15 months, leaving only 552 apartments available for purchase – the lowest level of stock in nine years.

He says the issue is not current sales rate, “as that can change rapidly – and is”, but “dwindling stock supplies that take years and years to turnaround”.

According to Bell, Queensland unit development approvals are at levels last seen in the 1980s, with no super high-rise buildings under construction.

“All remaining stock for sale is in completed buildings – there is only one medium high-rise building under construction – Eclipse (a 56-apartment building on Broad Beach) due for completion in 2012,” he says.

“There is no official start date for construction of any new high rises, although plans have been approved for several developments.

“Any new building will be anywhere from three to five years until completion – longest void of construction in Gold Coast’s recent history,” he says.

According to Bell, there are many indicators the market is turning around, including declining unemployment (down from a peak of 8.1% to 6.4% in November 2011), the economic stimulus from winning hosting rights for the 2018 Commonwealth Games (Bell equates this to the impact of the mining boom on nearby towns), a 9.5% increase in daily visitors from Brisbane and a relaxation of student visa requirements that will boost the local education industry.

In addition, he says foreign investment, which has declined over the past five years, is on the rise.

He quotes recent Colliers research that shows that Chinese buyers accounted for nearly a third of foreign purchases of Queensland residential real estate during the 2010-11 financial year, with record amounts spent on Gold Coast property.

“Chinese were the strongest with 32%, followed by Japan, NZ, Russia, Singapore, Hong Kong and South Africa,” he says. 

Bell says Chinese investment in the Gold Coast is tipped to snowball after China-based Ridong Group secured a $1 billion triple-tower project at Surfers Paradise. 

Year-on-year figures to August 2011 released by the Midwood Group record 242 apartment sales on the Gold Coast compared with 236 over the previous 12 months.

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