Gold Coast receivers' auction sale at 33% discount on property's prior sale

The Ray White Surfers Paradise Group’s annual auction event saw 108 residential properties, from Gold Coast flats and villas, to highrise apartments and hinterland homes, go under the auction hammer yesterday. Some 50 offerings found buyers.

The Ray White Surfers Paradise chief executive Andrew Bell had predicted the success rate would exceed 50%, so its initial result was clocked just short at 48%.

More than $22 million worth of property sold under the hammer with 12 properties sold pre-auction. There was no shortage of buyers with 372 registered bidders.

Apartments sold from as low as $178,000m which was a one-bedroom apartment in the Florida compex. The ninth floor Gold Coast Highway block offering had last sold at $97,500 in 1998, thereby reflecting its value gaining at an annual rate of 3.96%.

There was a $720,000 two bedroom Park Lane, Main Beach sale, which reflected 4.4% annual growth since its 1999 last sale. The vendors had wanted $1.1 million on its initial listing last October. It's a resident-only block with the weekly body corporate fees at $175 for the 185 square metre apartment.

There was a two-bedroom, sixth floor, 125 square metre Breakers North unit sale at Old Burleigh Road, Surfers Paradise at $710,000, which reflected 5.8% annual price growth since its previous 1985 sale of $140,000.

The Event, Ray White’s annual Gold Coast ­auction gala, attracted bidding from the packed room of buyers who were all hoping they had ­just purchased in a rising market.

Andrew Bell acknowledged conservative buyer intentions with vendor expectations still a bit ahead of what buyers will pay. There was a mix of owner-occupiers and investors, the majority Australia-based.

"That’s why we saw a lot of $1,000 to $2,000 incremental bids,” Mr Bell told the press, noting there had typically been three or four bidders for each property.

Mr Bell indicated he doesn't predict strong price growth during 2014 with the market strengthening from the bottom up after a tough few years.

There were only the three mortgagee sales at this year’s auction including an older style Paradise Waters home (pictured below).

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The three-bedroom Admirality Waters house was sold at $1.4 million, a 33% discount on its previous sale price. The 746 square metre property, sold by receivers who had set a $1.2 million reserve, had previously traded at $2.1 million in pre-GFC 2007. Its official land valuation was $1 million. It had also sold in 2005 at $1.775 million.

In the Gold Coast hinterland, a large five-bedroom family home with pool at Bonogin sold for $570,000. It had traded at $745,000 in 2005. The 9,100 square metre property at 336 Smith Road was marketed as a "bush bargain."

Another property, with townhouse potential, was sold for $745,500 at Southport. It was a highset three-bedroom home on a 1,214 square metre block last traded at $800,000 in late 2009. It also sold at $732,500 in 2008. The Ray White selling agent David Djurovitch told Property Observer the buyer will seek to obtain development approval. It had been offered with the prospect of between three and five townhouses, down on prior marketing campaigns when it was suggested between four and six townhouses could be secured subject to council approval.

Property has regularly been sold at a loss across the Gold Coast since the delayed onset of the global financial crisis to the popular Queensland strip, which has been among the most affected of Australia's lifestyle property markets.

About 33% of Gold Coast properties were sold last year for less that what was originally paid, according to the most recent statistics from RP Data with apartments in particular, rather than houses, selling still at a loss. By comparison, RP Data has less than 5% of properties resold at a loss in Sydney and Perth.

According to RP Data-Rismark’s Home Value Index, Gold Coast home values increased by 2.2% throughout 2013.

This was a composite of a 2.2% rise in house values, and a 0.1% fall in unit values. RP Data’s senior research analyst, ­Cameron Kusher, suggested house values on the Gold Coast are 14.1% lower than their previous peak, with units some 16.4% lower.

More than $570 million worth of units sold at Surfers Paradise in 2013, making it the top grossing region in Australia.

Colliers International’s Tony Holland recently suggested the Gold Coast was not purely about yield and capital growth – but about a lifestyle choice.

“You compensate the lack of yield with the lifestyle benefit,” he told the Australian Financial Review.

The Event 2014 will include the prestige auction offerings on January 30 at Palazzo Versace.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of Australia's most respected property journalists, having been at the top of the game since the early 1980s. Jonathan co-founded the property industry website Property Observer and has written for national and international publications.

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