Gold Coast apartment sales and prices edge higher amid ongoing supply shortage
The latest market research from Colliers shows the sales of new apartments on the Gold Coast continues to only edge higher.
In the June quarter prices were pushed higher, even amid the city’s ongoing supply shortage and interest rate rises.
The research, supported by data from Urbis, has revealed 396 sales of new apartments in the quarter, up from 377 sales three months earlier, despite the Reserve Bank of Australia lifting the cash rate for the first time in more than a decade during the middle of the quarter last May.
Critically, the data shows the average price paid for these apartments was $1.117 million - or 3.8 per cent higher than the previous three months, which is just shy of the record high of $1.143 million reached in the September quarter of 2020 during the height of the pandemic.
Director of Colliers Residential Gold Coast, David Higgins said the latest report reveals a general trend of declining sales of new apartments since the record high of 742 in the March quarter last year.
“The latest quarter’s sales may be slightly higher than the March quarter but well down on the extraordinary peak we saw in the first quarter of last year,” said Higgins.
8 Mawarra Street, Surfers Paradise
“However, sales over the 18 months to June this year have all been significantly higher on a quarterly basis than the preceding 18 months and that reflects sustained demand in the market even through the first two interest rate increases.”
The number of apartments remaining for sale across the 81 Gold Coast projects surveyed for the report was 875 – up from 411 in the March quarter as more projects were released to the market.
But that still represents just 5.5 months of supply based on the current sales rate.
Colliers expects supply constraints and ongoing demand to continue driving apartment prices higher on the Gold Coast in the near term.
Director in Charge of Colliers Gold Coast, Steven King, said the findings in the report were reflective of the Gold Coast’s product shortage and continuing market strength.
“Supply of new apartments is falling due to the increased cost of construction, which for high rise apartment projects over the last 16 months has risen by more than 25 per cent,” said King.
“Demand for new apartments remains solid but with a reduced supply of new projects and apartments, we expect apartment prices to continue rising especially if the supply shortage becomes more critical.”
The report also shows the Gold Coast capped of the 2022 financial year with a total of 2,073 new apartment sales.
Three-quarters of these were located along the coastal strip from Southport to Coolangatta with almost half, or 49 per cent, in the Gold Coast Central precinct which includes Broadbeach and Surfers Paradise.
The Southern Beaches precinct from Mermaid Beach to the southern border accounted for 26 per cent of the year’s total sales.
8 Mawarra Street, Surfers Paradise
Among other key findings in the latest research is an increase in offshore investors entering the market during the June quarter with four per cent of total sales during the period requiring Foreign Investment Review Board approval. The number of FIRB sales was up three per cent compared with the March quarter this year.
“There’s an emerging trend of foreign purchasers gradually re-entering the southeast Queensland investment market,” said Higgins.
“We’ve also noticed that the dynamic interest rate environment has had less of an effect on owner-occupier stock above $1.5 million in comparison to the bottom end of the market. Should they continue, both of these emerging trends will add another layer of continued demand pressure in the medium term.”
Higgins said the apartment market has been dominating sales momentum across all property sales on the Gold Coast over the past year.
In the nine months from the 2021 September quarter to the March quarter this year, there was an increase of 55.1 per cent in house sales compared with a 104.4 per cent increase in apartment sales, led by a surge of buyer activity at the tail end of COVID.
“The Gold Coast metro’s house market shows continued signs of growth, but at a slower rate, which is welcome news for buyers,” concluded Higgins.