SOUTHPORT DEVELOPMENT BOOM BEATS TATE'S EXPECTATIONS
Written on the 31 July 2015 by Nick Nichols
OFFICIAL figures show the Southport development boom has reached $2.5 billion, exceeding Mayor Tom Tate's expectations for the city's Priority Development Area (PDA) when it was introduced almost two years ago.
Council data reveals 47 development applications have been lodged under the PDA, accounting for 6700 apartments.
Tate says he had originally expected the development boost for the city's CBD would have amounted to just 2000 apartments.
"I knew it was a good idea for Southport, but I underestimated the have-a-go spirit in our city," he says. "There's a lot more coming and on the drawing board."
Southport's development surge is part of an estimated $6 billion in projects either planned or under way along the light rail. Southport projects alone could be worth a further $2 billion, including major mixed-use projects along Nerang Street.
Latest estimates are that about 70 medium rise and high rise projects are being planned between Southport and Mermaid Beach targeting a significant undersupply of stock in the city based on historical averages.
Tate dismisses concerns of a looming oversupply, saying the "market will dictate" whether projects will proceed.
"Any time you do your feasibility studies you look at supply and demand. It's about timing."
Tate says the diversification of the Gold Coast economy is underpinning the latest growth phase.
"I think this is only the beginning. The planets are aligning and people see Gold Coast prices as competitive compared with Sydney and Melbourne."
Among the developers taking early advantage of the PDA is Rawcorp which is undertaking the seven-level Ascent project in Lather Street after completing and selling out the nearby Rise project
Rawcorp director Anthony Rigby says the 32-apartment project is already 30 per cent sold, ahead of a full marketing campaign being launched.
"We'll be sold out before we finish," he says.
Ascent is the second of three projects Rawcorp has planned for the Gold Coast in recent years, and Rigby says the PDA had been a major drawcard for his company to Southport.
"The PDA has made an extreme difference; it makes the valuations for us work and our feasibilities to get the jobs up and running," he says. "Before the PDA we probably had one job a year on the Gold Coast."
Tate says the PDA was initially aimed at firing up a stagnant Southport property sector, adding that it has "ticked every box" in terms of "economic development, people voting with their feet and transport".
He says there's no need to extend the PDA to Surfers Paradise or Broadbeach which will grow organically.
"Those places were keeping up with the pace anyway. The market will dictate there.
"That's what was needed for Southport at the time to establish a central businesses district and we did well.
"We know the Gold Coast will grow. People will continue to migrate here and our job is to protect our lifestyle by making sure we go up instead of out. We can have growth and at the same time protect our environment."
Latest estimates are that Southport's population will double to about 60,000 over the next 20 years. It already has the highest number of jobs in the city, totalling 25,000 which the council says will grow to 60,000 by 2036.
The CBD contributed about $1.2 billion to the city's economy, behind Yatala at $2 billion and well ahead of Robina ($873 million), Bundall ($663 million) and Surfers Paradise ($558 million.).
Meanwhile, Tate says there is no news yet on the state government's sale of the old Southport Hospital site where demolition work is close to wrapping up.
"I encourage the state government to sell the site with the proceeds going to stage two of the light rail," he says.
"It's not an asset sale, but more of an asset transfer. You have a site that's dormant and doing nothing, so let it create jobs and at the same time let's put it towards transport infrastructure."
Author: Nick Nichols