Property and Blogging

The Gold Coast apartment market is looking up with soaring sales of new stock at the highest level in a year and more than double where they were six months ago - according to the latest Colliers International Gold Coast Apartment report.

There are 178 new apartments sold across the Gold Coast and northern NSW during the quarter, up from 117 in the March quarter, with September 2008 and its last quarters reporting 121 and 77 transactions respectively, says the report.



“This is the third quarter in a row where there has been improvement in sales volume and, as such, I think we can now clearly say the market has bottomed out and is on the improve,” says Brinton Keath, the project marketing director of Colliers International Gold Coast.

“Besides that, the gross sales value have increased, while supply levels have decreased - both of these are positive signs for the market,” says Keath.

In addition, he says that a number of quality projects providing larger owner-occupier style units have noticed good upswing in sales, which has also helped drive up the quarterly sales figure.

"What we are seeing at present across all our salesroom floors is lifting activity with investors and owner-occupiers becoming increasingly confident to re-enter the market,” he adds.

On the other hand, Keath also cites that, despite the noticeable increase in sales activity, he is not expecting any strong price growth over the coming 12 months. “This is the amount of time we believe it will take for the current supply levels to be soaked up,” he adds.

About three months ago, Colliers International says that the city's supply level of new apartments has tumbled, from 7.3 years in December 2008 to 4.6 years just three months later, while the rate of new apartment sales on the Gold Coast and northern NSW jumps 52% in the past three months to June this year.

Keath was also quoted in June, commenting that the increase in inquiry from Brisbane and interstate based investors looking for Gold Coast apartments, which converted into sales, has had the most impact to sales for that quarter, while he then added, “Although activity has picked up of late, the new apartment market is not yet out of the woods…..We are just at the beginning of the market turning.”

Coming back to this quarter, he says, in contrast to past quarters, it is now investors who are driving the market, not first home buyers who have been extremely active since the boosted First Home Owner Grant was announced by the Federal Government late last year.

However, Keath notes one of the best news over the past months is probably the resurgence of locals back into the marketplace, particularly for new apartments priced up to $900,000. He further added that properties priced below $600,000 are again proving the most popular.

"Completed stock is attracting the most interest, accounting for 53% of sales, as investors feel confident in securing apartments at today's prices and interest rates. With talks of interest rates are about to climb and the market is at the bottom, there is a clear sentiment in the market that now is the time to get in,” Keath notes.

Meanwhile, Colliers International Gold Coast’s research manager Lynda Campbell, who compiled the report, says four projects were sold out during the last quarter - Sunland's Avalon and Circle on Cavill, with both the South and North towers achieving sell-out, and Gallery Vie in Varsity Lakes.

At the same time, Campbell says that six new projects had also been included for the survey, representing the largest number of new developments to be included since the June 2008 quarter.

"Despite the new projects coming on-line, the supply level on the Gold Coast and Tweed is now sitting at 3.4 years, the lowest we have seen since June 2008.With several projects shelved and the majority in our survey either completed or under construction, this supply level is poised to continue to fall as sales rates increase, and we foresee the city could face an undersupply of new apartments in the future,” says Campbell.

That being said, Campbell also reveals that high rise sector has accounted for the lion's share of sales during the quarter, with 129 unconditional sales for a gross value of $95.6 million.

Medium rise apartments, defined as four to eight storeys in height, accounted for 27 sales, while there were 22 sales in the low rise sector, which encompasses buildings up to three storeys in height.

“The best performing project was Meriton's Brighton on Broadwater, with 42 sales, contributing to Labrador and Southport's position as the most active precinct during the quarter. In total, 89 sales were recorded across the nine apartment projects in Labrador and Southport, making the area the most active of all seven precincts including in the study. Whereas, the precinct taking in Surfers Paradise, Chevron Island and Main Beach was the next best performing, with 32 sales during the quarter”, says Campbell.

Earlier, the Colliers International Property Watch report dated February 2009, in assessing suburbs on the Gold Coast and northern NSW that have the potential to perform positively over the coming year- concludes that Gold Coast is a unique part of Australia with a great variety of living options ranging from absolute beachfront, river, canal, golf course and lakefront to hinterland acreage properties.

“These varied choices continue to make the Gold Coast a popular place to live. Many factors have combined to create a strong population growth, and there are no indications that this will not continue.

“With population growth comes demand for residential accommodation and non-residential development, this continued demand should hold the Gold Coast in good stead going forward”, says the above Property Watch report.