Sales of new Gold Coast apartments have increased, despite ongoing interest rate rises and supply shortages.
Colliers June Quarter Apartment Sales Report found there were 396 sales of new apartments in the quarter, up from 377 in the previous quarter.
The report found the average price paid for these apartments was $1.117 million – a 3.8% increase from the previous three months and just shy of the record high of $1.143 million reached in the September 2020 quarter at the height of the pandemic.
“Over the past few months, I have noticed more new build apartments for sale in addition to the marketing for these projects. Due to the low supply, demand has remained solid even with the rising interest rates and increasing prices,” said Gold Coast broker Jamison Banham (pictured above left) of First Broker.
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“Properties are selling as quick as ever with the main issue being construction timeframes and waiting for the apartments to be ready to move in.”
Banham said most of his client base was young professionals and first home buyers with most looking to purchase an owner-occupied property.
“The issue with the high demand and increasing prices is very low stock under $1 million and even lower under $700,000,” he said.
“Many of my customers are looking at prices around $700,000 and are finding it increasingly hard to find stock, especially when trying to take advantage of the First Home Loan Deposit Scheme and/or First Homeowner Grant with the price cap at $700,000 and $750,000 respectively.”
David Higgins (pictured above middle), director of Colliers Residential Gold Coast, said the latest report revealed a general trend of declining sales of new apartments since the record high of 742 in the March quarter of 2021.
“The latest quarter’s sales may be slightly higher than the March quarter but well down on the extraordinary peak we saw in the first quarter of last year,” Higgins said.
“However, sales over the 18 months to June this year have all been significantly higher on a quarterly basis than the preceding 18 months and that reflects sustained demand in the market even through the first two interest rate increases.”
Colliers revealed the number of apartments remaining for sale across the 81 Gold Coast projects surveyed for the report was 875 – up from 411 in the March quarter as more projects were released to the market.
The Gold Coast capped off the 2022 financial year with a total of 2,073 new apartment sales, with 75% of these located along the coastal strip from Southport to Coolangatta with 49% in the Gold Coast Central precinct including Broadbeach and Surfers Paradise. Meanwhile, the southern beaches precinct from Mermaid Beach to the southern border accounted for 26% of the year’s total sales.
Higgins said there was an emerging trend of foreign purchasers gradually re-entering the southeast Queensland investment market.
“We’ve also noticed that the dynamic interest rate environment has had less of an effect on owner-occupier stock above $1.5 million in comparison to the bottom end of the market. Should they continue, both of these emerging trends will add another layer of continued demand pressure in the medium term,” he said.
“The apartment market has been dominating sales momentum across all property sales on the Gold Coast over the past year. In the nine months from the 2021 September quarter to the March quarter this year, there was an increase of 55.1% in house sales compared with a 104.4% increase in apartment sales, led by a surge of buyer activity at the tail end of COVID-19.”
Colliers Gold Coast director in charge Steven King (pictured above right) said the findings in the report were reflective of the Gold Coast’s product shortage and continuing market strength.
“Supply of new apartments is falling due to the increased cost of construction, which for high rise apartment projects over the last 16 months has risen by more than 25%,” King said.
“Demand for new apartments remains solid but with a reduced supply of new projects and apartments. We expect apartment prices to continue rising especially if the supply shortage becomes more critical.”
