North shore the standout Gold Coast new unit market in 2012, helped by receivership sales: Colliers

The north shore is shaping up to be the top-performing Gold Coast market as buyers take advantage of reduced prices on a number of projects in the hands of receivers.

There were a total of 54 sales recorded across nine medium- and low-rise projects on the north shore, making it the top-performing precinct for the third consecutive quarter, with a total of 156 sales for the first nine month of the year, according to September 2012 quarter figures from Colliers International, which were released just before Christmas.

The north shore precinct includes suburbs from Hope Island to Biggera Waters, about 15 minutes from Surfers Paradise.

The report provides an overall favourable impression of the Gold Coast apartment market, reporting 140 sales across high-, medium- and low-rise sectors over the three months to September – an increase of 5% on the previous quarter and 43% up on the same period last year.

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Tony Holland, Colliers International residential project marketing director, says price growth in the new apartment market is yet to be seen, but an “impending supply shortage would likely lead to strengthening prices at some point down the track”.

“Based on the current quarterly selling rate, the supply of new apartments could be taken up within 1.9 years, which is the lowest expected absorption period in two years, and if the sales rate increases this time frame will be reduced.

In contrast, the more up-to-date Midwood Report for the November quarter shows just 45 sales (19 in high-rise projects), a 50% drop on a year ago, and has more than 700 high-rise apartments available for purchase, indicating a much longer supply pipeline.

Colliers International reports 26 high-rise sales over the September quarter.

“The [north shore] figures exceed annual sales for 2011, 2010, 2009 and 2008. With one more quarter still to be reported, 2012 is shaping up to be a standout for this precinct,” says Colliers International research manager Lynda Campbell, who compiled the report.

“The increased sales rate during 2012 has been as a result of several projects falling into the control of receivers or financiers who have reduced prices and made concerted efforts to sell down remaining apartment stock.

“This has been an ongoing process and has resulted in stock levels reducing significantly, particularly at Hope Island where only 28 new apartments remain on the market, the majority of which we would expect to see sold over the next six months, if not sooner,” she saids.

Mistral at Harbour Quays (pictured above) was the best-performing project, recording 17 sales during the September quarter, followed by the now sold-out Ilanah Aqua development at Hope Island (pictured below), with 12 sales.

Mistral, currently under construction, features 60 one- and two-bedroom apartments being developed by the Emandar Group. There have been 33 sales recorded to date, with 27 apartments still available for purchase.

One-bedroom apartments start from $309,000.

The Emandar Group has told Colliers International that the remaining apartments are under contract, with the project expected to sell out during the December quarter.

If sales continue at the current rate and no new projects are marketed off the plan, overall supply could be taken up in just over 14 months.

Supply will dry up in just three months in the low-rise sector at the current sales rate.

Analysis by Colliers International shows there are around 1,400 apartments in various stages of planning and gaining approvals.

All planned apartments are in the low- and medium-rise sectors, with around 45% mooted for Hope Island.