PROPERTY PORTFOLIO
2022 MARKET UPDATE WITH STEVE HUNT | MEDIAHUNT.COM.AU
SUPPLY & DEMAND
The Gold Coast apartment market continues to attract local and interstate interest. SOUTHEAST QUEENSLAND appears to be entering a new phase in the property cycle. While the prestige sector continues to shine with record sales – highlighted by a record $11 million plus off the plan penthouse sale for Brisbane in Azure Property Group’s luxury One Five Six Oxlade Drive – there has certainly been a slowdown in market activity, particularly the launch of new apartment projects. This is actually a good thing. What we have seen in the last couple of months is a more realistic release of new projects to the market – not the frenetic, fast paced, almost weekly release of new apartments flooding the marketplace. Rising construction costs impacting on the feasibility of developments has been the catalyst for a slowdown, as has the spectre of rising interest rates, a looming federal election and global uncertainty. Industry insiders say market demand from local downsizers for product close to the water and the beach is still very strong, and a slowdown in new supply will only prevent any oversupply issues that have created troubles in the past. According to Urbis in its latest available research, new apartment sales cracked an alltime high well before the year ended. The number of apartment sales for the September quarter surged to 690, bringing the
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total of new apartments sold on the Gold Coast in the first nine months of the year to 1,882. This figure has already eclipsed the previous full-year record of 1,556 sales in 2016. The apartment buying spree has also led to a record low supply of apartments, according to the Urbis Apartment Essentials report. Based on the September sales rate, only 2.2 months’ supply of new apartments remain available on the market should no new projects be released. This is the lowest supply level ever recorded by Urbis for the Gold Coast and is down from 4.2 months’ supply recorded in the June quarter. (Three major projects with more than 2000 apartments were released in the last quarter of 2021). “What we are seeing across our workbook is continued strong demand for premium apartments but an intensifying lack of supply in the middle market; new apartments in desirable locations that are priced between around $600,000 and $1,500,000,” says Matt Schneider, head of the Property Council of Australia’s Gold Coast branch. “The apar tment market has cer tainly stratified over the last few years with different opportunities and challenges now facing each of the market segments. “We have also seen the emergence and intensification of pressure on project feasibilities
because of the escalation in construction costs, and increasingly acute pressure on access to labour and materials. “Whilst those forces are creating challenges for some projects, it is encouraging that they are not the impact of a lack of demand or an oversupply of product but rather on other elements of project feasibilities. “Should those forces result in some of the projects approved across the city over the last few years not being constructed, we expect to see a further strengthening of the market fundamental on the supply side into 2023.” This view is supported by two of the Gold Coast’s most active project marketers – who have been behind some of the city’s best performing apartment projects. Jayde Pezet and Todd Matheson, who have re-branded their KM Sales and Marketing (KMSM) to Pezet Matheson, say market forces delaying some projects will continue to drive the market to new heights. “There has been a lot of industry talk about the impacts of rising costs and supply chain issues, but we are seeing the continuation of a very strong downsizer market similar to what we saw in 2021,” said Jayde. “If there are issues that delay new projects coming to market, we believe this is only going
