77 Less Projects, Less Supply

2022 WITH STEVE HUNT | MEDIAHUNT.COM.AU MARKET UPDATE

LESS PROJECTS, LESS SUPPLY

More new projects are needed to meet demand.

Côte Palm Beach Aniko Chevron

SOUTHEAST QUEENSLAND’S property market is slowly transitioning from the boom of the past three years, but it’s not a bad thing.

The latest ‘correction’ – if we want to call it that – is much needed.

The number of projects sent into council across the Southeast, particularly the Gold Coast, was unsustainable.

Migration has been incredibly strong and I believe this will continue as part of the psychological by-product of Covid – people fast tracking their lifestyle and retirement plans which inevitably leads them to Queensland.

The slowdown in new projects coming to market has also seen a reduction in supply despite the fact that migration is still strong and people are continuing to move here.

This is reflected in data from Colliers which shows apartment prices are not only holding firm but in fact have risen during the second quarter of 2022.

Data shows the average price paid for apartments was $1.117 million – or 3.8 per cent higher than the previous three months.

In the nine months from the 2021 September quarter to the March quarter this year, there was a 104.4 per cent increase in apartment sales, with 396 sales of new apartments in this quarter alone.

Apartment sales in the 18 months to June this year have all been significantly higher on a quarterly basis than the preceding 18 months – reflecting sustained demand in the market even through the first two interest rate increases.

This demand is being driven by very strong fundamentals, with the report showing only five and a half months’ supply of apartments based on current take up rates.

With supply constraints and demand at an alltime high, apartment prices will continue to drive higher on the Gold Coast in the near term despite the slowing economy.

Director in Charge of Colliers Gold Coast, Steven King, says the findings are reflective of the Gold Coast’s product shortage, rising demand and continuing market strength.

“Supply of new apartments is falling due to the increased cost of construction, which for high rise apartment projects over the last 16 months has risen by more than 25 per cent,” said Mr King.

“Demand for new apartments remains solid but with a reduced supply of new projects and apartments, we expect apartment prices to continue rising especially if the supply shortage becomes more critical.”

Record high demand is meeting record low supply, led to an acute shortage of new apartments .

Flow Residences Kirra Beach Hotel

Sam Arnaout.

V&A Broadbeach

Projects either in market or entering the market are still selling well.

Iris Capital’s $1 billion V&A Broadbeach has led the way with more than $200 million in sales.

The V&A project continues to be the premium central Gold Coast offering and has been well taken up by both local and interstate by buyers wanting a slice of luxury in the cosmopolitan heart of the city.

The southern Gold Coast is certainly one of the most active areas for luxury beach apartments, with Steer Development’s $51 million Côte Palm Beach recently launching to market priced from $2.39 million.

Experienced Gold Coast builder and developer John Kearney is gearing up to deliver Rhythm Kirra Hill, a project consisting of 40 two-bedroom, twobathroom apartments further down the coast in Coolangatta.

Rhythm Kirra

Paul Gedoun’s trilogy of projects – Flow, Awaken and Esprit – have led the way in transforming the southern area of Rainbow Bay and Coolangatta, with two projects sold out and under construction and Esprit selling well.

KTQ Group has also announced plans to fasttrack its redevelopment of the Kirra Beach Hotel site – driven by dynamic market conditions that have seen buyers and retailers respond positively to the transformational development.

Aniko Group is set to embark on its first project outside of its epic Hope Island transformation, after securing DA approval for its Chevron Island development – which is fast becoming the Gold Coast’s apartment hotspot.

Meanwhile Main Beach welcomed a fresh injection of just under 250 new resort-style apartments for owner occupiers after local family-owned developer Drew Group launched its $390 million Lagoon Main Beach development to market.

Also coming to Main Beach is Masthead, a $250 million uber luxe development bringing 28 apartments to the market, backed by royalty Edo Mapelli Mozzi, who sees great value in the Gold Coast.

Brisbane’s apartment market has slowed, as has the Sunshine Coast’s, but despite some of the headwinds of higher inflation and a slowing global economy, there are plenty of savvy developers who are creating projects that will withstand price pressures and deliver for the growing cohort of people coming to the Southeast from interstate.