Gold Coast apartment sales rate cruising past last year
Gold Coast apartment sales volumes for the year to date have already exceeded the whole of last year - with one quarter to go.
Colliers International’s research and forecast report for the second half of 2013 found that the September quarter had 184 sales. This takes total for 2013 to 552 - slightly higher than the 546 for all of 2012.
While a large proportion of sales can be attributed to a small number of projects, the majority of projects have seen upward movement in sales rates. Across the board, the sales rate for the September quarter rose to 6.3% per project - the highest level since the start of 2008.
But, while sales strengthen, stock levels decline, the report says. Based on the current quarterly sales rate of 184, stock could be exhausted within 13 months, marking the fastest take-up rate in five years.
During the September quarter, three projects sold out - Aquilo, Winged Keel and Drift Apartments stage one - leaving only 800 apartments on the market. This is the lowest number since December 2001. The five year chart illustrates the continual decline of stock levels from a high of around 2,400 in early 2009 to the current level of 800. While several projects (Sapphire at the Broadwater, Phoenix and Pure) are on the market, sales figures are unavailable at this stage. The report says these projects will have "some upward impact on supply levels but they are reportedly selling well so impact will be minimal".
The report found:
High rise
Fourteen high-rise projects across the Gold and Tweed coasts recorded 85 sales during the September quarter. Southport Central III and Soul were the top performers with 16 sales each followed by Synergy with 15 sales. The supply of high-rise stock continues to decline from the most recent peak of around 1,600 in mid-2009 to the current 650. Most high rise sales occurred in Broadbeach, Surfers Paradise and Southport and these suburbs also hold the largest supply of new high rise apartment stock. Only two high rise sales occurred at the southern end of the coast during the September quarter.
Medium rise
The medium rise sector out-shone high rise during the September quarter, with 92 sales across 10 projects. The North Shore Precinct recorded 93% of all medium rise sales with Aquilo reporting 55 followed by Salacia Waters (13) and Harmony Broadwater (12). Based on the current selling rate, medium rise stock could be exhausted in as little as four or five months. Only 138 medium-rise apartments remain on the market - most within the North Shore Precinct.
Low rise
The low rise sector has almost come to a stand-still across the Gold Coast with only seven sales during the September quarter and only 11 apartments remaining on the market. There is a definite under supply in this sector with limited supply in the planning stages as most developers move from three levels to four and five to maximise returns. Where possible, approvals for low rise projects are being increased which will result in an upward swing in the medium rise sector.
Outlook
The outlook for the Gold Coast is looking brighter than it has for several years. Interest rates are at the lowest levels in decades, the population is rising, dwelling approvals are increasing, residential vacancy rates are decreasing and tourists are returning.
The state government declared Southport a priority development area in October. This will take Southport to another level and build on the current development activity. Several new development applications have been submitted to council and more will follow. Leading up to the Commonwealth Games, Southport will become a development ‘hotspot’, taking the attention away from traditional apartment tower suburbs of Surfers Paradise and Broadbeach.
Surfers Paradise and Broadbeach will continue to attract high rise development, particularly along the light-rail corridor.
Precinct updates
Broadbeach
The Broadbeach Precinct recorded the second highest sales rate during the September quarter with a total of 34. For the second consecutive quarter, Synergy was the best performing project with a total of 15 sales, followed by the two Oracle towers with 10 sales in Tower II and seven sales in Tower I. Provided no new stock is added to the market and the current sales rate continues, Broadbeach could be sold out within 18 months.
Surfers Paradise
Surfers Paradise reported 31 sales during the September quarter. The best performing project was Soul with 16 sales followed by Hilton Orchid Tower with nine and Hilton Boulevard Tower with six. Based on the current selling rate, the remaining stock in Surfers Paradise could be exhausted within 16 months. The Hilton and Soul towers have been the subject of speculation and media comment since suffering the effects of the Global Financial Crisis. However, the tide has turned and sales are being made in these iconic buildings. Both Hilton towers are over 90% sold with minimal stock remaining. The Soul building had some of the highest price points across the Gold Coast with sales in the September quarter averaging $2.58 million. Prices ranged from just over $1 million up to $4.6 million.
Southport/Labrador
With Southport to become a priority development area the suburb is set to attract development, along with existing projects such as the light rail ($1.8 billion), recent completion of the Gold Coast University Hospital ($1.76 billion), the on-going redevelopment of the Broadwater Parklands and the expansion at Griffith University.
The Southport/Labrador Precinct reported 26 sales during the September quarter with Southport Central III recording the highest sales rate of 16.