FIRST home buyers looking to enter the new apartment market are being starved for choice on the Gold Coast, according to Urbis Research.
The latest Gold Coast Apartment Report compiled by the analyst says only two projects cater to the sub-$400,000 market - Sage in Merrimac and Azzura Greens in Hope Island.
The analysis is based on a weighted average of sales prices within each project, with Sage recording an average price of $375,000, the same as Howard Group’s Southport project Sphere which has sold out.
The next cheapest is Majeed Tabrizi’s Tweed Ultima North development at Tweed Heads where prices average $408,333.
Azzura Greens, a resort-style development, is understood to have sold out of remaining apartments since the Urbis report was published leaving Sage as the only sub-$400,000 apartment project on the market.
While a raft of new developments are proposed for the Gold Coast’s coastal fringe market, little detail is available on pricing of these products.
New coastal projects, including Ho Bee Investments Rhapsody in Surfers Paradise and Morris Property group’s Synergy at Broadbeach, have average prices of $521,429 and $537,500 respectively. Both are attracting strong interstate investor interest.
Urbis says these projects have sold 14 and 16 apartments respectively in the second quarter of 2014, while Sage has sold 12.
These three projects were among the biggest movers in the Gold Coast apartment market in the quarter, sitting behind the 28 sales recorded for the upmarket Soul project where apartments average $1.35 million each.
Sage developer Minamarc says its project has garnered strong interest from Sydney buyers who are suffering from price fatigue in the NSW capital.
Sales manager Elena Marchetti says the project has been aided by new RP Data Research which shows that apartments in the Merrimac area have average vacancy rates of 1.03 per cent and average yields of 6.1 per cent.
"The majority of the apartments we have sold to date have been taken up by interstate investors and local first home buyers," she says.
RP Data also lists Merrimac as the most rewarding Gold Coast apartment market of the past year, with average prices jumping 25 per cent to $380,000.
Two-bedroom apartments at Sage are priced from $349,000.
Sydney buyer Nicholas Gee, who bought into the sage project, says he moved to the Gold Coast after struggling with the Sydney market where equivalent products are 50 per cent higher.
"In Sydney property prices are so high, that in many cases first time buyers like me would struggle to qualify even with the $15,000 government grant,” he says.