Overall, the prestige market on the Gold Coast is tracking along okay. Market conditions improved considerably throughout 2014 with a number of high profile properties selling. We have also seen an increase in sale prices compared with the sales occurring in 2012 at the bottom of the market. Prestige on the Gold Coast varies from suburb to suburb in terms of dollar value. What is considered prestige in the northern corridor would be considered only good quality in the central areas. We have broken the Gold Coast down into three areas which can be summarised as follows:
Northern Corridor The prestige sector in the northern corridor between the Gold Coast and Brisbane is limited to two estates, the already established Coomera Waters in Coomera and the developing Calypso Bay in Jacobs Well. Both estates feature prestige dwellings on canal front allotments with an entry point of approximately $1 million. Presently there is no market for prestige units in the northern corridor.
The prestige housing sector is starting to gain momentum after a long period of quiet activity. Agents are reporting a considerable increase in demand from buyers with house prices starting to reflect accordingly. An example of this is 59 Westward Way, Coomera, a large, high quality, two storey, 5-bedroom, 4-bathroom dwelling situated on a 1,054 square metre allotment with a southerly canal aspect that sold for $1,450,000 on 6 January 2015. The last recorded sale for this property was $1.25 million in August 2013.
There has been considerably less sales activity in Jacobs Well, however the highest recent recorded sale of a prestige dwelling was in the Calypso Bay estate with 93 Marina Parade, Jacobs Well achieving $1.69 million on 13 June 2014.
The current record low interest rates in conjunction with an increase in market conditions in the low to mid range of the market can be seen as contributing factors in the increase in value and activity in the prestige sector in the northern corridor.
If market conditions remain as they currently are, it can be predicted that the prestige housing sector of the northern corridor will continue to see an increase in sales volumes and value. As developed estates such as Coomera Waters run out of vacant land, buyers are starting to construct more dwellings in the Calypso Bay estate.
To sum up, the not too distant future is looking good for both of these estates.
Central Gold Coast The prestige market on the central Gold Coast has continued to strengthen from the bottom of the market in 2012. Properties that are receiving the most attention are modern dwellings built to a high standard in areas such as Surfers Paradise, Broadbeach Waters and Mermaid Beach. Sales activity over the past 12 months for these central suburbs has seen prestige dwellings selling from around the $2 million mark up to $7 million. A notable recent sale is 117 Commodore Drive, Surfers Paradise, which went under contract in March this year for $6.6 million.
The types of property demanding these high prices are ones that are located either on the Nerang River, have a wide canal frontage with a favourable aspect or have beach frontage, such as properties located along Hedges Avenue in Mermaid Beach.
The prestige unit market on the central Gold Coast has also seen an increase in market activity after the market bottomed in 2012. Prestige units can commonly be found in Surfers Paradise, Main Beach and Broadbeach. Although the unit market is seeing increased activity we do notice the property still needs to be priced competitively to achieve a sale. The type of unit you would typically expect to buy in the prestige market would be a penthouse or sub-penthouse, a unit located in a development with beach frontage or units that occupy a whole floor. Selling prices achieved during 2014 and into 2015 for prestige units have been around the $1 million to $3 million mark.
Two notable recent sales include:
• 4701/1 Oracle Boulevard, Broadbeach. This unit is one of the sub-penthouses in the modern development known as The Oracle at Broadbeach. The property sold in November 2014 for $3 million. This property was originally sold by the developer for $4,390,000 in October 2010.
The Soul penthouse in Surfers Paradise recently sold for $7 million. The unit was stripped back to a shell so the purchaser could fit it out to their specification. The unit was initially under contract for $16.85 million in 2006 however this sale fell through.
You may ask yourself who is buying all this nice property? We are generally seeing a mix of overseas, interstate and local buyers. For new construction overseas buyers (especially Chinese) are still prominent and the interstate and local buyers are generally looking for property that fundamentally shows good value.
Looking ahead for the prestige market, the movement of interest rates and the level of supply will play a critical role in the overall performance. Interest rates are currently low, supply levels are decreasing and buyer demand is on the up, so as a result we are seeing the top end of the market move more strongly into the recovery phase of the property cycle.
Southern Gold Coast/Northern New South Wales The prestige market on the southern end of the Coast is showing positive signs of recovery after a tough few years. We saw value levels and market conditions fall sharply through 2011 and 2012 and appeared to bottom out at the end of 2012.
Typically the prestige houses are located on the beachfront in these parts and include Palm Beach, Currumbin, Tugun and Bilinga where $2 million plus would be classed as prestige. A notable sale was 14 James Street, Currumbin which recently sold for $5.1 million after being listed for sale for over 12 months. The property last sold for $8.2 million in February 2010.
Prestige units are also found on the beachfront however also include Kirra, Coolangatta and Tweed Heads (Rainbow Bay) where $1.5 million will buy you a large 3- or 4-bedroom unit of circa 200 square metres. A notable unit sale was by a Mr Robert Slater or more commonly known as Kelly Slater who recently purchased a beachfront unit in Palm Beach for $2.15 million. For privacy reasons, we will keep the address a secret.
We have seen a lot more positivity in the prestige market with a lot more buyer confidence. As you can see from some of the sales, we are still quite a way off value levels which were being achieved between 2007 and 2010 however things are looking up. If interest rates stay where they currently are throughout the year then there is no reason why 2015 should not be a better year than 2014.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.