BEACHFRONT APARTMENT SALES OVERSHADOWED BY FRINGE MARKETS
13 March 2015, Written by Nick Nichols
APARTMENT sales on the Gold Coast continue to streak ahead, with the latest quarter recording a figure almost twice the five-year average.
Property researcher Urbis, in its Gold Coast Apartment Essentials report, has revealed sales of 304 new apartments in the December quarter which marked the year's strongest period of sales.
The sales compare with a five-year average of 170 per quarter, and were well ahead of the 10-year average of 250 per quarter as the market was buoyed by a flood of new developments in the city's Coastal Fringe precinct.
The fourth-quarter result was up 140 on the September quarter and brought total Gold Coast apartment sales in the calendar year to 825.
Urbis senior consultant Lynda Campbell says the market continues to be driven higher by projects outside of the Coast's traditional beachfront strip, known as the Gold Coast Central markets of Southport, Surfers Paradise and Broadbeach.
The Coastal Fringe accounted for 126 unconditional contracts on new apartments, compared with 88 in the Gold Coast Central district.
This figure represents almost half the available stock remaining in the Coastal Fringe precinct which Campbell expects will continue to drive Gold Coast apartment sales for the remainder of this year.
She says new products are bringing more lifestyle developments to the traditional suburban market, arguing that they will provide strong competition for new Gold Coast Central developments.
Campbell says affordability has been the contributing factor to the surge, with Coastal Fringe apartments selling at a weighted average price of $423,651 each, compared to Gold Coast Central's average of $696,875.
Gold Coast Central has 676 apartments remaining for sale, while the Coastal Fringe has just 259, says the Urbis report.
The North Shore precinct, which includes Hope Island, Helensvale and Runaway Bay, also had a strong sales run with 85 sales over the quarter, up from just three in the September quarter. The precinct has 94 apartments remaining for sale.
Urbis says while older projects struggled to find buyers, newer developments achieved record breaking figures in the North Shore precinct.
Campbell says owner-occupiers dominated the affordable Coastal Fringe market, which includes Bundall where Matthews Property Group is undertaking the Waterford Apartments.
Waterford accounted for 75 sales in the fourth quarter, as the project capitalised on its proximity amenities of the central district and the employment centres in and around Bundall.
Campbell says while Bundall is proving popular with apartment buyers, growth there will be restricted by site availability.
Urbis described 2014 as the Gold Coast's most active year for new apartment sales for several years, starting with 29 projects and finishing with 36 projects totalling 3500 apartments. Just 1084 of those apartments currently on the market. Based on current sales trends, Urbis says the current supply "could be exhausted in 11 months".
The Gold Coast market has a potential future supply 19,828 apartments, based on projects either mooted or under way, but Urbis classifies just 54 per cent of that figure as approved.
Campbell says Gold Coast Central will regain the sales crown once developments such as the Jewel triple-tower come to the market. Gold Coast Central has 11,598 apartments in the pipeline with 65 per cent of those classified by Urbis as approved.
Campbell also says there are few signs of oversupply, despite the strong numbers in the development pipeline.
"I think the market has been undersupplied, particularly on the southern end from Mermaid to Tweed Heads where there are only 55 new apartments on the market," she says.
"I don't think there is oversupply at the moment. We've got around 2500 apartments that will be launched over the next nine months, and that's sustainable with the sales rates increasing."
Campbell says developers are "doing a lot more homework and putting a lot more thought into their buildings as far as amenity is concerned". She says this is aiding the marketability of many projects.
Author: Nick Nichols