Gold Coast apartment market down but not out as supply hits new record low
The Gold Coast apartment boom may have come off its 2021 highs, but solid sales reported in first three months of the year reveal continuing momentum as new apartment supply hits a record low.
Data compiled by property consultancy shows the Gold Coast recorded 377 new apartment sales in the March quarter, well off the 2021 high of 742 in the equivalent quarter last year.
The result also falls short of last year’s low of 450 sales for the June quarter.
Yves, Mermaid Beach
Despite 11 new projects launching during the quarter the data continues to highlight the ongoing shortage of new apartments with just 411 new apartments remaining for sale at the end of March, which is the lowest number ever recorded by Urbis since it began monitoring the new apartment market in 2014.
Based on the current quarterly sales rate, the Gold Coast has just 3.3 months of supply remaining, although Urbis notes that this figure will change once a number of large-scale projects are released to the market over the coming months.
“Sales have certainly eased off their 2021 highs in the latest quarter, but that’s not unexpected considering the high levels achieved last year,” said Urbis director Lynda Campbell.
“The key statistic this quarter is the drop in the number of apartments for sale to a record low, which shows the supply side is still failing to keep up with demand. It’s unclear whether the supply shortage had any bearing on overall sales for the March quarter as the urgency to buy that we saw in 2021 is showing signs of easing.
“However, there are several large projects coming to the market and we will be watching these sales closely as the market digests rising interest rates and any new initiatives at the federal level.
“The obvious concerns surrounding construction costs and supply chain issues means that we do not expect to see as many projects make it out of the ground as in previous years while volatility and viability are managed.”
Off the back of an impressive run of sales last year with a record 2,492 new apartments sold, the current quarterly sales rate could translate into another high-performing year the market.
Prior to 2021, the Gold Coast market absorbed an average of 1,100 new apartments a year with a high of 1,600 in 2015 and a low of 800 in 2017. If the March-quarter sales of 377 are repeated throughout the year, 2022 is on track to becoming the third biggest year for sales behind 2015.
“The dominant buyer profile for Gold Coast apartments remains owner occupiers looking for larger apartments,” said Campbell.
“Almost a third of the sales – about 31 per cent – were at price points above $1 million, which reflects the general increase in apartment values.”
The Gold Coast Central precinct, which includes Southport, Surfers Paradise and Broadbeach, had the highest number of sales in the March quarter with 243 sold, followed by the North Shore, which includes Hope Island, where all 90 sales were made.
The Coastal Fringe precinct and the Southern Beaches precinct – which is from Mermaid Beach to Coolangatta – both saw a drop in sales, with the Southern Beaches precinct falling to 27, the lowest since late 2017.
Urbis puts the drop in sales across these areas down to limited supply, with just 67 apartments remaining in the Southern Beaches precinct at the end of March.