Gold Coast

The Smartline Report – August Edition

The month in review: Gold Coast

By Herron Todd White
August 2015

The majority of new construction on the Gold Coast is within the growth region from Hope Island north to Beenleigh and west to the Scenic Rim.

Generic project housing varies in price firstly as a result of who the client is and then by the quality of inclusions. Traditional project home companies generally provide better value than house and land investor packages, but not always. Valuation of off the plan housing can be a minefield as rates for very similar products can range from $1,100 per square metre to over $1,600 per square metre. At the end, the valuation assessment (including the land) relies on sales evidence of similar nearby houses, with an allowance made for age and condition.

Looking back to the costs discussed in the 2009 Month in Review, building costs do appear to have increased at the lower end of the scale, but perhaps not a great deal for the prestige and higher quality market.

Hope Island/Helensvale

In Helensvale, estates such as River Links and The Peninsula have been established over the past ten years and most of the vacant sites remaining will be developed in the next few years.

These estates have building covenants which attract architecturally designed and quality project packages that range on a rate per square metre basis from $1,100 to $1,700 for living area. These dwellings will mostly feature attractive mixed cladding, stone benchtops throughout, ducted air-conditioning and often leave landscaping and pool packages outside the building contract.

These estates have smaller lot sizes ranging from roughly 300 square metres to 600 square metres and therefore attract investors, project builders and turnkey packages.

These building contracts are typically $200,000 to $275,000. Floor plans are usually compact 3-bedroom plus study or 4-bedroom, with bathroom, en suite, double garage and small covered patio. Ground improvement inclusions are basic fencing, aggregate driveway, turfed lawn and water tank. The rates per square metre of living are generally $1,000 to $1,200 which has crept up from our previous review in 2009. Builders and developers have reported that the cost is generally higher due to raw materials costs and green compliance.

Far Northern M1 Corridor

There are numerous new estates in the far northern corridor between the Gold Coast and Brisbane with vast quantities of new dwellings under construction. The suburbs where most of this construction is underway include Ormeau, Ormeau Hills, Pimpama, Coomera and Holmview.

Most dwellings in these suburbs fall into two categories, being either investor stock or owner occupier properties. Investor properties typically comprise a 4-bedroom, 2-bathroom onground dwelling with a double lock up garage and usually have a more average standard of fitout, ie laminate benchtops and cupboards and brick exterior. Building rates per square metre vary widely with some builders taking advantage of unsuspecting investors purchasing properties sight unseen. Costs can range from between $1,000 per square metre to $1,300 per square metre of living area for very similar constructions. Trends worth noting in this investor section of the market are that specifications are starting to upgrade with stone benchtops and render to the street front aspect of the dwelling becoming more commonplace. Additionally dwellings and lot sizes are becoming smaller with the smallest known allotment available being a 213 square metre block in Holmview.

Owner occupier properties, as expected, tend to have a higher level standard of finish with property owners opting for features such as ducted air conditioning, stone benchtops, high ceilings and good quality light fittings. Building rates per square metre are more alike for dwellings built for owner occupation which may point to property owners shopping around and comparing prices from more than one builder. Most dwellings constructed by owner occupiers have analysed building rates of between $1,100 to $1,250 per square metre.

There is limited prestige residential locations in the far northern corridor between the Gold Coast and Brisbane other than the estates offering allotments with canal frontage in Jacobs Well and Coomera Waters. The standard of finish increases in these estates with rates per square metre reflecting this and generally falling between $1,300 and $1,400 per square metre.

Building costs have definitely increased since our 2009 edition on the same topic. This edition quotes rates of between $900 and $1,000 per square metre.

North Western M1 Corridor

This area is seeing a number of existing estates releasing new stages and the emergence of new estates. Existing estates with new stages include Riverstone Crossing (Maudsland), Highland Reserve and Coomera Springs. These estates are showing consistent land value increases, particularly Riverstone Crossing. Park Central at Oxenford is a new estate on Kopps Road which has reportedly nearly sold out, predominantly to investors.

New dwellings are being purchased by owneroccupiers and investors alike. For owner occupiers build rates tend to show $1,000 to $1,250 per square metre for a turn key product. Build rates for the larger building firms who offer inclusions such as stone benchtops and air-conditioning remain competitive and within market parameters. Higher levels of inclusions tend to be at the higher end of the scale sometimes even reaching $1,300 per square metre depending on where or in which estate the proposed dwelling is situated. Features such as ducted air conditioning become the norm at this level.

Build rates for investor stock tend to vary greatly between builders. Asking rates tend to range between $1,000 and $1,500 per square metre, some of which are well beyond market parameters. There are often significant differentials between levels of finishes and standards of inclusions which is often attributed to the product being sold to investors. Generally rates adopted for brick and tile entry level dwellings as a turn key product are valued at circa $1,000 to $1,200 per square metre depending on size. An as if complete duplex pair was recently valued at circa $1,050 per square metre of living area which is very competitive. In this area, there is very limited upper end product hence build rates would rarely be expected to top $1,300 unless in exceptional circumstances.

Build costs have increased since 2009 at a fairly consistent rate. It was generally accepted that during the GFC it was land values, rather than build rates which declined. There is still evidence suggesting that people are purchasing existing product below replacement cost.

Southern Gold Coast and Tweed Coast

There are a number of new and developing residential estates on the Tweed Coast at present, and a very small number on the southern Gold Coast. The majority of new construction is in the Casuarina and Kingscliff/Salt precinct in which the majority of properties are to be owner occupied or holiday lock up style homes. Land prices are very strong and in some cases, prices have almost doubled in value since 2012.

For a basic, single level, brick and timber dwelling with metal or tiled roof construction you are looking at a cost of approximately $1,100 to $1,300 per square metre on a gross floor area basis, with project home builders such as GJ Gardner, Perry Homes etc. This cost obviously increases with a higher quality of finish. For $1,100 to $1,300 per square metre, you are looking at laminate cabinetry, stone benchtops to kitchen, laminate benchtops to bathrooms, split system air-conditioning and other basic modern fixtures.

Builders constructing a higher end product are charging much higher rates, in the vicinity of $1,600 to $2,000 per square metre on a gross floor area basis. This may be for an architecturally designed dwelling with voids over living areas, high raked ceilings, ducted air-conditioning and high quality inclusions.

Luxury Housing

New luxury housing construction is on the rise.

This is occurring as demolition and rebuild in the central waterfront suburbs of Paradise Waters, Isle of Capri, Broadbeach Waters, Palm Beach, or the beachside at Mermaid Beach.

These attract owner occupiers who, with leading architects, design and construct luxury homes ranging in size up to 1,100 square metres. Many of the houses are full concrete construction with basement carparks. Breakdown of building contracts analyse from a low of $1,600 to $4,000 per square metre for the living areas. Generally, construction rates per square metre have not increased markedly over the past five years due to less demand.

Scenic Rim

With two satellite cities in the area, Yarrabilba and Flagstone, and the release of the new master planned community of Oakdale Estate at Beaudesert, the Scenic Rim and Lower Logan area is going through a construction boom at the moment. These types of estates give rise to the standard project builder, however over recent years, the stereotype of a basic, run of the mill house at a fixed rate has changed dramatically.

There are two distinct levels of project builders in these estates. The first is the investment product builder who offers a standard level of finishes typically being basic stone benchtops, stainless steel appliances, ceilings fans, two split system air conditioners and a full turn key product including landscaping, fencing and driveway. Rates per square metre for this style of dwelling typically range from around $1,000 to $1,250 for living area depending on the size of the dwelling and site issues (such as small lots where materials need to be walked in by the trades).

The second project builder is now moving more in to the custom range type of construction. While still offering good rates per square metre and a base series of plans to choose from, the end product is definitely determined by individual taste and budget. Buyers have the option to finish the house themselves with their choice of carpet, main floor area tiling, landscaping and driveways or have the builder complete a turn key product. These dwellings are typically larger than the investment product with more features such as high ceilings, stacking or bifolding doors to external areas and better quality of finish. The economy of scale kicks in here, with these builders being able to offer a customised product at not much more than a project builder due to the larger living area sizes and the benefit of bulk buying power and negotiation with suppliers. Builders that fit into this category typically have a good presence in the display villages.

Moving on to the more established areas, there tends to be the emergence of the custom builder for second, third and above home buyers who know exactly what they want in their home and want the ability to deal directly with the builder through each step of the process. These homes are typically larger and well appointed with good quality fittings and more creature comforts such as fireplaces, polished timber floors, high ceilings with architectural features, top of the range appliances and an individual look and feel. Rates per square metre vary significantly in this category as some of the project builders are beginning to offer a more customised home for around $1,500 per square metre, but can be in excess of $2,000 per square metre depending on the features and inclusions.

For example, a custom built, midset, Hardiplank and Colorbond, Colonial reproduction 3-bedroom, 2-bathroom home of 188 square metres of living, 38 square metres of outdoor and deck and a 40 square metre garage was contracted at $444,760 and included water tanks and sewerage system. This equates to a rate of around $2,000 per square metre. For a project style, two level, brick and Colorbond home with 4-bedrooms, 2-bathrooms and 271 square metres of living, 33 square metres of outdoor area and a 37 square metre double garage was $385,117 and excluded floor coverings, water tank and sewerage system. This contract equates to a rate of $1,250 per square metre of living area – a lot more home but without the inclusions of the custom builder.

www.smartline.com.au

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

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