The Gold Coast apartment market has transitioned into the COVID-19 crisis in a much better position than it was going into the global financial crisis, planning and advisory firm Urbis says. In its latest quarterly survey, Urbis found that the Gold Coast market was tracking well, recording 265 sales in the first quarter of 2020, sitting above the two-year quarterly average of 238 sales.
The weighted average sales price also lifted by 10% over the quarter to $809,811, buoyed by strong pre-Covid sales.
Urbis said that over the year the Southern Beaches Precinct recorded the highest sales rate, yet a recently launched projects in Surfers Paradise had rebooted enquiry and transactions in the Gold Coast Central Precinct. Over the quarter 64% of a sales were to owner occupiers and only five per cent to overseas buyers, while interstate investors accounted for 19% of sales.
Urbis senior consultant Lynda Campbell said the current environment had pushed developers to reassess projects to ensure they are ready for changes in the market.
“It is more important now to make sure projects are targeting buyer demand in order to weather the storm,” Campbell said. “Projects with a high exposure to the investment market will need to put in place solid pre-settlement work to maintain a strong settlement rate.”
Urbis said the city had also benefited from a shift in sentiment in recent years, favourably trending away from large developments targeting international investors and instead towards smaller boutique projects, targeting owner occupiers.
Moving forward the market is tipped to remain resilient, further supported by low interest rates, a low level of supply and a higher level of product aimed at the owner occupier market. Worryingly, the supply of new apartments remained relatively weak at 1,000 apartments, the lowest level recorded in over five years.
“There is a pipeline of projects ready to launch over the next six months, but whether they do will be something to watch,” Campbell said. “If project launches slow, this will put pressure on the current supply.” This will drive up prices.
Urbis said it would be watching fourteen forthcoming projects containing approximately 1,160 apartments due to settle throughout 2020 closely to see if the COVID-19 border restrictions were impacting the market.
“The next quarter’s results will be highly anticipated,” Campbell said. “Interest rates are still low, and there is not a large volume of expensive product aimed at investors, as was the case going into the GFC. Though we expect sales to slow, conversations with developers suggest that enquiry is still strong.”