COAST APARTMENTS GO AS FAST AS THEY'RE BUILT
Written on the 17 March 2016 by Nick Nichols
GOLD Coast apartment sales have almost doubled in the past year with buyers snapping up stock as quickly as it hits the market.
According to the latest Urbis Gold Coast Apartment Essentials report, there was just 10 months' supply of new apartments at the end of December, although rising demand could tighten the market even further.
A cooling Sydney market is adding to the momentum, with affordability rated as the key driver of growth.
The Urbis report shows that 1494 new apartments were sold on the Gold Coast in 2015, up from 825 in 2014.
The popularity of $1 million-plus apartments was even stronger with sales in the December quarter more than doubling to 37 from a year earlier and up from 12 in the previous quarter.
Urbis senior consultant Lynda Campbell says apartment sales in 2015 are the strongest in almost eight years and the figures show demand is gathering pace.
"This has been one of the most active quarters we have seen since the GFC," says Campbell.
"There were 12 projects launched and at the same time four projects sold out. There's a lot of interest in the Gold Coast at the moment and it's a lot to do with affordability."
Urbis estimates that 26 new projects will bring an additional 2500 apartments to the Gold Coast market over the next nine months, or about 18 months' supply.
Campbell says a slowdown in the Sydney market will drive even more investor interest in the Gold Coast with average apartment price differential of about $345,000.
Campbell says owner-occupiers dominate the $1 million-plus market, but there is anecdotal evidence of a strong upturn in foreign investors buying into the Coast. Urbis will begin monitoring buyer profiles from the March quarter.
Campbell says demand broadly appears to be keeping pace with supply on the Gold Coast.
"The sales rate keeps increasing and new projects are coming on," she says.
"At the moment it's really quite stable. Demand and supply are in balance and I think we've got a couple more years to run with this."
BIS Shrapnel last week echoed that sentiment, arguing that the Gold Coast market remained in undersupply.
However, it warned that the inner city apartment market in Brisbane was headed for oversupply early next year. Softening rental rates are adding weight to that forecast.
Gold Coast apartment sales were strongest in the central precinct, namely Southport, Surfers Paradise and Broadbeach, where most construction activity is taking place.
Sales in the December quarter surged to 453 across 58 projects, from 416 in the September quarter, and well up from 303 sales a year earlier.
"We've still got undersupply in some areas, namely the southern beaches precinct from Burleigh south," says Campbell.
Author: Nick Nichols