In the lead up to this year’s Commonwealth Games, the “boom or bust” reputation of the Gold Coast was mentioned in almost every conversation about the property market on the Glitter Strip and its surrounds. In the six months since the games have ended, the market has continued on a positive trajectory. So much so that experts are now labelling the market officially stabilised: no more boom or bust.
When it comes to the state of sales throughout the myriad of new luxury developments popping up from Surfers to Burleigh, no one knows more than Knight Frank. They are currently responsible for the project marketing of many of the Gold Coast’s most spectacular new apartments including Koko, Opus, Otto, Sandbar and Qube. Director and Head of Project Marketing in Queensland for Knight Frank, Chris Litfin is confident in the stability of the area.
According to Mr Litfin, it’s a change in the type of developments being built that has lead to more stability. Smaller, owner-occupier centric developments offering around 100 apartments are all the rage throughout the Gold Coast. When comparing the “boutique” developments currently under construction or in pre-sale stage to the developments that exploded the market in the 2016/17 cycle, it’s easy to see the change.
“Previous property cycles were generally centred around major developments with many hundreds of apartments in single buildings — as an example, Soul had around 300, Oracle had around 500 and Circle on Cavill delivered over 600,” Mr Litfin said.
“Generally the buildings notorious at the moment are a lot smaller than they used to be. Some have a few hundred apartments, but most are around 100 or less. This means there won’t be a huge increase in supply, and with the steady increase in population on the Gold Coast and the ever-increasing downsizer demand from retirees, the result is a very stable property environment,” he said.
It’s no shock to anyone that this is in part due to the steady and substantial increase in population that are of (or approaching) retirement age. The latest Australian Bureau of Statistics data indicates that around 16% of the total population of the Gold Coast is over the age of 65.
New apartments are catering to this market, with an increased focus on storage space, room size, accessibility and facilities, making them a dream for downsizers selling up their family home to relocate to a minimum-upkeep apartment by the beach.
In addition to the downsizer market, a new demographic of owner-occupier buyers are coming up from Syndey, with all eyes on the Gold Coast. Interstate migration from Sydney and Melbourne into Queensland (and particularly the Gold Coast) has been strengthening for the last few years, with the latest data proving this trend isn’t going anywhere.
While downsizers are typically on the hunt for a low-maintenance apartment, the Sydney buyers are searching for smaller low-density to medium-density townhouses and small complexes with water frontage. This kind of properties would cost them an arm, a leg and the majority of their internal organs in the Sydney market, while a stunning purchase on the Gold Coast would typically set them back around $600,000 – $800,000.
The recently released Australian Residential Development Review 2018, produced by Knight Frank, highlights some of these changes and shines a light on what’s still to come for the now stable market.
Throughout the City of the Gold Coast, there were 3,600 new apartments under construction in 2017. At the end of the year, there was a further 2,400 currently being marketed or undergoing pre-sales and a further 5,800 apartments with developmental approval (DA). If all projects go ahead (which is unlikely), this would mean a further 11,800 apartments in the Gold Coast market by 2021.
With the infrastructure growth expected on the Gold Coast, including an expansion of the airport, possible cruise terminal and the G:Link light rail —development along the beachfront is expected to continue.
Sales along the spine of the existing light rail have been exceptionally strong, with the majority of apartments throughout the entire Local Government Area of the Gold Coast located alongside the tram line.
The report also highlights the migration of suburb hotspots on the Gold Coast. Where once Southport and Hope Island dominated the new apartment market, the current market sees a shift towards Surfers Paradise and Benowa. By 2021 we can expect to see the boom of Broadbeach.
With the market now officially stabilising, it seems the Gold Coast property market will continue to boom for the foreseeable future.