It’s widely acknowledged that in the lead up to the Commonwealth Games, Gold Coast property markets have been enjoying a “sweet spot”.
What some people are asking, however, is what will happen after the Games. In particular, will there be an oversupply of apartments?
For anyone returning from a trip to Brisbane or Sydney, perhaps the more relevant question is “Where are all the cranes?” Compared with the metro markets, the Gold Coast is seeing fairly limited new apartment development.
Despite very large numbers of development approvals over recent years, only a handful of larger projects are proceeding. Most developments that have reached the point of being marketed or built, have fewer than 200 units. This is largely due to the conservative lending policies of banks.
In the second half of 2017, the Rider Levett Bucknall Crane Index identified 31 cranes on the Gold Coast, from Coomera to Coolangatta. This was down from 34 cranes in 2016. For comparison, there were 85 cranes in Brisbane in 2017.
Most of the activity now is in apartment construction. With the completion of the athletes’ village and venues, attention has shifted to the Broadbeach/Mermaid Beach area. One building of 219 units has recently been completed and 357 units are under construction across six projects.
A further 12 projects have been marketed, with some 1,800 units proposed. The largest of these are Elegance, located opposite Pacific Fair, with 522 units; and The Star Residences, with 423 units. There are also two or three large projects in Surfers Paradise. These are likely to be completed over the next three or four years.
With this level of pending supply, it is not expected there will be an oversupply of apartments after the Games. Over recent years, take-up rates of new apartments across the Gold Coast region have averaged 800 to 1,500 units per annum.
Much of the demand recently has been from local owner occupiers and holiday makers from Sydney buying for part-time use. Recent constraints on lending to Australian investors, and restrictions and levies on offshore buyers, are not likely to reduce investment activity for long. Alternative lending sources are being found for offshore buyers.
Apartments due to be completed over the next one to two years will contribute to an easing of the Gold Coast’s tight rental market. This includes the 1,200 units in the athletes’ village. Ray White Surfers Paradise has seen record low vacancy rates recently, with around 20 groups competing for some rental properties.