Low-rise receiver sales help drive 49% increase in Gold Coast apartment sales over March quarter: Colliers

Discounted sales of low-rise apartment by receivers have helped drive a 49% increase in Gold Coast sales over the March quarter, the first quarterly sales increase in 12 months. 

There were 113 unconditional sales on the Gold Coast and adjoining Tweed Coast, with the low-rise sector accounting for 46 of these. 

Despite this increase, quarterly sales remain at very low post-GFC levels – in March 2008 there were more than 500 quarterly sales. 

In doing so it overtook the high-rise sector sales rate for the first time in six years.

During the whole of 2011, there were only 103 low-rise apartment sales. 

“Several low-rise projects are in the hands of receivers resulting in price reductions and renewed marketing campaigns which has created the higher sales rate, and this is expected to continue,” commented Colliers in the March quarter update. 

Ilanah Aqua and Azzura Greens at Hope Island were the strongest performing low-rise projects across the Gold and Tweed Coasts, with 17 and 16 sales respectively for the quarter, driven by receivership sell-downs. 

According to Colliers, there are 10 low-rise projects on the Gold Coast containing 144 apartments available for sale. 

Based on the current increased sales rate, this stock could be exhausted within 9.4 months unless new projects are released to the market. 

Only four of the seven precincts covered in this report have low rise apartment stock and all have very low levels, with the exception of the north shore precinct. 

The north shore precinct was the best-performing low-rise precinct on the Gold Coast in terms of sales volumes, with 36 sales across three projects, while Surfers Paradise was the weakest. 

Surfers Paradise recorded only one project sale during the March quarter – XXV Breaker Street at Main Beach where two sales were recorded at $1 million each.

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With the north shore experiencing a higher-than-average sales rate, this stock level will be taken up quickly, leaving very low supply levels across the Gold Coast in the low-rise sector.

Across the region, the average sale price of a new apartment was approximately $640,848.

The report notes that the number of apartment projects have almost halved in the past three years, with just 47 projects being marketed currently compared with 80 in 2009 – the lowest level since 2004.

There were 1,245 apartments available for sale at the end of March 2012, equating to 33.1 months (2.75 years) of supply based on the current quarterly sales rate.

Only one new project was added to during the March quarter: Sykes Apartments in Southport, with one- and two-bedroom units being marketed from $285,000 to $385,000.

Three projects sold out at Coolongatta: Ciel, Elysee and Reflection Tower Two; two at Robina: Sidewalk on Scottsdale and St Kilda; and one at Broadbeach: Sierra Grand.

Tony Holland, Colliers International director of residential project market, says the increase in sales on the Gold Coast could signal a turnaround for the market.

“Confidence is clearly on the improve – the economic outlook for Queensland is good, recent changes in government at both a state and council level have created a more positive sentiment, and this month’s interest rate reduction of 50 basis points will also work to improve confidence,” he says.

“With no new stock entering the market in the short term, availability continues to fall, which will lead to supply shortages in some areas, particularly in the low-rise sector. Our research has found that for the first time in six years the low-rise sector recorded a higher sales rate than the high-rise sector, with 46 sales,” he says.

“Potential future supply of new apartments across the Gold and Tweed Coasts stands at around 12,500, 64%t of which are located between Hope Island and Surfers Paradise, but there is no certainty as to whether and when these will actually be built,” says Lynda Campbell, Colliers International Gold Coast research manager.

“The second half of 2011 saw the north shore precinct reporting sales volumes at their lowest levels since the end of 2008 but this has turned around to now be the best performing precinct on the Gold Coast, with a total of 42 sales reported for the quarter.

“The increased sales rate in the north shore precinct has resulted in a sharp decline in availability, particularly in the one-bedroom and one-plus-study sector, leaving almost no stock remaining,” says Campbell.