The month in review: Gold Coast
By Herron Todd White
December, 2009
The year 2009 on the Gold Coast did not perhaps turn out
as bad as some pundits may have thought it might. While
the market for prestige property and new apartments
softened further, the sub $500,000 and second home
buyer level up to, say, $750,000 performed reasonably
well. The lower and second home buyer price bracket
was underpinned by low interest rates and government
stimulus.
The Gold Coast offers an array of property segments,
with some segments performing better than others
in 2009. The medium rise/high rise apartment market
can be broken up into two age categories: the older
style (say 1980’/1990’s) apartments; and the new/near
new apartments. While Surfers Paradise dominates the
landscape for this style of development, Hope Island,
Labrador, Southport, Broadbeach, and even Coolangatta
have shown similar trends. Demand for the older style
apartments has been good in 2009, largely because they
typically show a larger floor area and lower purchase
price. New/near new apartments have not been so lucky.
Not only are developers finding it difficult to sell new
product, but stock which was completed in 2008 or early
2009, has either not sold, or has fallen into the hands of
receivers. Subsequently, discounts have been applied to
clear excess stock levels in some of these developments.
Some developments where significant discounts have
been applied include:
- B roadbeach - Ocean Pacific, Freshwater Point, Sierra
Grand
- M iami/Burleigh - Miami One, Varsity View Apartments,
Ambience
- C oolangatta/Kirra – Kirra Surf
- Hope Island – Illanah Aqua, Marina
Stock levels of new/near new apartments on the Gold
Coast remains high and it would appear pressure on value
levels will continue in this market segment into 2010.
Since the beginning of 2009 the canal front/river front
market on the southern part of the Gold Coast has fallen
only slightly, with value levels now almost mirroring levels
seen in late 2005/early 2006. One of the better performing
waterfront locations has been Mermaid Waters. Buyers
now perhaps feel that this market segment has reached
the bottom, and they are confident that value levels will
someday reach the highs experienced late 2007, which is
some 30% higher than current levels. The less established
northern waterfront markets of Hope Island, Helensvale
and Coomera have not seen any recovery from last year’s
falls, but perhaps has softened further. The waterfront
land market at Hope Island has been hardest hit with
supply far outstripping demand. The mortgagee activity
in Platinum Waters and the failure to clear excess stock
(because of initial price points) at Riverlinks (Helensvale)
has not helped the cause.
The vacant land market in the northern corridor of the
Gold Coast, while predicted to perform well in 2009 (on
the back of the FHOG) did not live up to expectations.
One of the drivers of this was first home buyers were
more likely to purchase a second hand house than build a
new one; with the general feeling being, you got more for
your buck. While all reports dictate a shortage of vacant
land on the Gold Coast to satisfy demand, this did not
translate in 2009 into price increases. In most areas within
the northern corridor between Oxenford and Beenleigh,
land prices remained static with some areas showing
small decreases.
The established central and beachside suburbs of the
Gold Coast, in regards to established houses, have faired
well throughout 2009. In particular Burleigh Heads,
Palm Beach, Currumbin, Elanora, Varsity Lakes, Robina,
Carrara, Benowa and Ashmore, have the benefit of good
established infrastructure. These areas are always less
affected in a major market downturn and have really
benefitted from the second home buyer activity in the
$500,000-$750,000 price bracket during 2009.
The prestige property market on the Gold Coast has
continued to underperform in 2009. The best way to
portray this is by empirical evidence:
• 1 Albatross Avenue, Mermaid Beach sold April 2009
for $18M. Reportedly cost close to $30M.
• 47 Hedges Avenue, Mermaid Beach sold Septembe
2009 for $9.5M. Previously sold March 2008 for
$16.8M.
• 3551 Main Beach Parade, Main Beach sold January
2009 for $9.01M. Previously sold June 2006 for
$13.5M.
While this does indicate that some properties have
suffered big discounts, it is also an indication that big
sales prices are still being achieved.
The Gold Coast continues to be underpinned by good
population growth. However, Brisbane appears to be
outperforming the Gold Coast in this regard. There are
pockets of the residential market which will take some
time to settle (medium rise/high rise apartments) however
the fundamentals in general (reported low stock levels of
houses in the central/beachside suburbs) are good.
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