Sales at Queensland's North Point development show value of detailed sales path: Peter Chittenden

Like many other markets across Australia, Queensland’s south-east including Brisbane and the Gold Coast have seen falling lot production over recent years. Since a peak in 2003-2004, supply has been in decline since 2007 and unlike trends in Victoria and NSW an up swing is not yet evident.

However in terms of land marketing, there are some good results being achieved and one estate in particular on the Gold Coast helps to highlight how the right combination of size, location and price will produce strong sales.

In what is described as ‘a bumper sales run’ we can see North Point at Hope Island (pictured below) as the fastest selling land estate in south-east Queensland and certainly as strong as many other locations along the entire eastern seaboard.

The recent strong sales are also seen as a further sign the Gold Coast’s property market is on the road to recovery. This good news comes from project marketing director Tony Holland of Colliers International's Gold Coast office. Tony believes that Gold Coast-based buyers have identified the unrivalled value at North Point, where waterside lots are selling from $215,000.

Price is always a central consideration and as markets in Brisbane, Perth and Melbourne start to converge North Point stands as good value as supply continues at low levels.

However as the south-east market continues to grow, the appeal of waterside lots is clearly set to remain very attractive.

Tony Holland reports that in less than 12 weeks, over 60 contracts have been issued for the estate resulting in sales valued at $15.8 million. An even stronger result when you consider that this is the first release of 73 home sites at North Point. Hope Island is a very desirable location and targeted marketing has helped to secure this result and importantly it represents a rate of sale that has not been seen in this area for many years.

The marketing has helped to reinforce the fact that locals know that North Point offers competitive prices for a quality location like Hope Island and this has been strongly realized in the sales results.

I asked Tony what were, in his experience, the key factors that had driven the results, and he pointed to some familiar territory.

“The local market is well aware of the lifestyle and location advantages of the area and they have enthusiastically embraced the terrific value proposition of this project,” he said.

“North Point has also come to the market at a time when the supply of residential land across the city was now starting to lag behind rising demand.”

The UDIA State of The Land Report shows that supply has yet to recover in Brisbane while Colliers International’s own research and forecast report for south-east Queensland communities found that land sales on the Gold Coast had jumped 45% in a six-month period while reflecting the UDIA figures approvals continued to slide and this fueling demand and prices were now moving up.

Another fact that is pushing demand in the area is population growth. The latest census data shows an increase of around 7,000 residents annually over the last five years creating demand for an additional 2,800 dwellings each year.

Dwelling approval rates over the past two years have fallen well short of this demand and if this continues it may well result in developers considering bringing forward the release of lots currently on hold.

From a marketing perspective Hope Island is a popular area and it is forecast to need 3,000 more dwellings over the next decade as the suburb’s population grows to more than 15,000 people and in any future growth land like that at North Point on the waterside locations.

Research from Colliers International and the UDIA also reveals the weighted average sale price of residential land on the Gold Coast was almost $245,000 and so here again we see that value is a key proposition well marketed for North Point’s success, as Tony highlights.

“Given the current market dynamics, North Point offers the chance to snap up land in a prestigious location at prices that start below the current average and so there is reason to see some clear upside for anyone buying now,” he said.

When we stop and look at the marketing activity it is clear to agree that astute locals are taking advantage of this rare window of opportunity. Colliers International Gold Coast and Foxwood Property Solutions are marketing North Point under instruction from Philip Campbell-Wilson of Ernst & Young, acting as receiver and manager and this fact will also have acted to encourage buyer interest in the estate.

North Point comprises a selection of both waterside blocks from $215,000 and premium waterfront home sites with marina berth priced from $430,000. Lots in the initial releases of North Point range in size from 415sqm to 584sqm, a range that is now seen as above average.

North Point offers a good example of how impressive results can be achieved from a well-planned and detailed sales path that is directly aligned to market conditions, but it should also be acknowledged that the wider market is still somewhat hesitant and so this volume of sales comes from leveraging all of the facets outlined.

Peter Chittenden is managing director for residential of Colliers International.