2,000 new Gold Coast apartments not enough to meet demand: Colliers
The Gold Coast is poised to deliver a bumper crop of new apartments in 2024, with 2,000 expected to be completed and settled during the year.
That may not be enough however, with recent data from Colliers suggesting even 2,000 won't be enough to meet the continued heightened demand for apartments on the Gold Coast.
The shortage has become so acute that Colliers’ research shows that the ‘housing crisis’ is also hitting the top end, with a 30 per cent supply gap for luxury apartments.
“Despite an estimated 2,000 apartments coming to completion later this year, it has to be remembered that the bulk of this supply has already been presold over the last three years,” said Colliers Residential Director David Higgins.
“The settlements this year are effectively the flow-on effect of a massive increase in buyer activity in 2021, but since then we have seen significant challenges for the high-rise sector that continues to keep supply well behind the demand curve. Buyers continue to flood the market competing for less available stock than this time last year.”
Colliers has revealed that 1,157 new apartments sold off the plan in the past 12 months on the Gold Coast, leaving 1,401 apartments available for sale, or just over 12 months supply.
The pressure is being shared across all price points as supply at the end of the June quarter remained well below the 1,689 apartments for sale in the second quarter of 2023.
This led to a surge in the weighted average price for new apartments to $1.772 million in the first quarter of this year, the highest ever reported by Colliers.
The average price held its ground in the second quarter at $1.714 million and Colliers sees plenty of reason to expect the average price to hold r even go higher.
“We’re now seeing more apartments selling above $1 million than ever before and it’s evident that this is part of a changing dynamic for the Gold Coast market,” Higgins added.
“Over the last two years, 67 per cent of sales were priced at $1 million and over, but during the second quarter of this year 89 per cent of sales were $1 million and over.”
While price gains have been driven in part by lagging supply, with Colliers estimating that the supply gap sits at 30 per cent even for the luxury end of the market, demand has remained elevated on the Gold Coast for some time. Colliers estimates that 30 per cent of all high value property transactions in Southeast Queensland last year occurred on the Gold Coast.
“Over the next decade, the stage is set for what we believe will be a transformative shift in luxury real estate on the Gold Coast with the critical force behind this being led by the baby boomer demographic,” Higgins said.
“These buyers, many of them downsizing, are investing their capital in luxury apartments and houses and frequently paying cash up front, without the need to secure finance to complete.
“Ultimately, this will continue to be driven by an estimated $272 billion inheritance windfall over the next decade as wealth begins to be transferred to the next generation.”
The latest research from Colliers into the apartment sector shows that the Gold Coast recorded total sales of 571 apartments for the first half of 2024, which is slightly above the 499 reported a year earlier.
The Gold Coast Central Precinct accounted for 89 per cent of sales during the second quarter 2024. This precinct also has the highest level of supply with 91 per cent of the 1,400 apartments remaining for sale on the Gold Coast.
The market is currently being led by experienced developers with most of the projects being launched and moving forward to construction being undertaken by those backed by a solid reputation of project delivery.
While there are about 5,650 new apartments under construction across the Gold Coast, only 31 per cent are expected to be completed this year and a further 36 per cent next year.
