Anecdotal evidence that Gold Coast's struggling apartment market is on the mend has been validated with the release of new research by property advisory firm, Urbis.
The Urbis Gold Coast Apartment Insight report, shows there are only 634 new apartments available for sale in Gold Coast and Northern NSW, and the current level of apartment supply sits at the lowest level seen in a decade.
“Low supply, continued market absorption of new product, and the construction of appealing infrastructure is all working together to bring the Gold Coast Apartment Market back to life,” said Jon Rivera, Associate Director of Urbis Economic & Market Research team.
The report shows that there clearly are still challenges in the Gold Coast Apartment Market, but the market is tightening.
There have been 205 sales in the March quarter, and 299 in the December 2013 quarter, up 44% from the prior 6-month period, and setting the scene for the rest of the year.
“In a market where there has been only nine new projects come to market via presales, performance is strong. It is what happens next that has everyone watching,” said Jon Rivera.
Several new projects are planned for release across the Gold Coast in the June, September and December 2014 quarters, which are likely to lift sales volumes over this period says the Urbis team. These are positioned in hot spots that will be supported well by the new infrastructure planned in the region.
The Gold Coast Light Rail, which will open in mid 2014, and the declaration of Southport as a Priority Development Area, are already luring investors and developers in search of multi-residential sites.
The Urbis team said that the one significant challenge in the Gold Coast market that remains is price point, which is lagging behind other locations in South-East Queensland making it harder for Developers without building arms to develop profitably. Developers however appear prepared to speculate on an upwards shift to property prices that will allow them to profit in the future.
“We expect new projects coming to market immediately will need to do so at highly competitive price points. Sales will be tight initially. It will certainly take a particular type of developer to achieve profitable outcomes in the current market. But if there is a shift upwards, that will likely change.” said Jon Rivera.
According to senior Urbis Gold Coast Consultant, Lynda Campbell, the signs of future performance are strong.
“This year, after the strengthening in housing pricing across SEQ, we expect we’ll see the return of the empty nester market to the Gold Coast. They’ll be more focused on apartment and low maintenance lifestyle choices than ever before."