City Beat May 2023: How the Gold Coast unit market continues to hold firm following COVID boom
Following a property boom, capital cities tend to see prolonged contractions in the market, generally driven by an affordability pinch.
It's happened in Sydney and Melbourne, with values coming back over -10 per cent over the last 12 months. The COVID-induced boom however saw some Sydney suburbs see gains of over 50 per cent.
While the Gold Coast saw values spike due to the huge number of interstate migrants either working remotely for years or making the permanent move to the coastal hotspot, the anticipated end of the growth cycle has many believing there's a new entry point which prices won't go back below.
That's been recently reaffirmed with new data from property data analytics company CoreLogic, who suggest unit values are just -3.5 per cent lower than they were this time 12 months ago. In fact, the value of units has grown over the last two months. CoreLogic's Home Value Index found Gold Coast unit values rose 0.1 per cent in March and a further 0.8 per cent in April.
The median value of an apartment on the Gold Coast is now $654,000, according to CoreLogic.
A lot of agent feedback is positive, with demand in most areas still outstripping supply.
Pezet Matheson Managing Director Jayde Pezet says they had a strong run of sales between Coolangatta and Main Beach across April.
"In Coolangatta, Esprit, Rhythm Kirra Hill and Rockpool saw a great run of unconditional sales over the past four weeks, whilst Lagoon Main Beach commenced construction which ignited a string of extremely qualified enquiries that resulted in sales," Pezet says.
Pezet says lead flow has softened, however the quality of leads is much stronger, with a solid conversion rate for projects that are currently under construction and being undertaken by credible developers with highly credentialed consultants.
"We see a steady back end to 2023 for projects that are well funded, commenced construction with well-known builders and that have a robust team to deliver," Pezet added.
Demand is still alive at the high end of the market too, NPA Projects Director Andrew Erwin says.
"Despite ongoing concerns with construction certainty, the Gold Coast luxury apartment market has been remarkably vibrant leading into and post Easter, with downsizers and relocators motivated to find a suitable project with completions forecast for 2024/25," Erwin says, adding that there is a sense that new markets will emerge with international interest spiking.
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Ray White Head of Projects Caitlin Rosenboom says the Gold Coast residential market continues to outperform others around the country due to a number of key principles.
"The combination of domestic population growth due to continuing interstate relocations; and international migration, which is steadily returning to pre-pandemic levels, puts increased demand on an already critically undersupplied property market," Rosenboom says.
"Investors in particular are keen to purchase property off the plan on the likely assumption that demand will continue to outstrip supply in the foreseeable future, suggesting steady and continuing capital growth and, of course, excellent investment yields.
"With the volume of development applications continuing to slow and fewer residential projects being launched, those who purchase off the plan in successful projects will reap the rewards.”
Urban.com.au data showed a further increase in buyer interest for Gold Coast off the plan property from New South Wales. There was also increased levels of search demand from Queensland. which is starting to trend upwards following a sharp decline in search at the start of 2022.
Seven of Queensland's top 10 most searched suburbs by interstate property buyers were on the Gold Coast. Broadbeach was again the most popular, followed by Burleigh Heads, Coolangatta, Palm Beach, Surfers Paradise, Kirra, and Main Beach.
Urban.com.au CEO Mike Bird says the Gold Coast has a long and interesting road ahead of it.
"What tells me there’s legs in the market is some of the best developers both in Australia and internationally are developing in the burgeoning area," Bird says.
"Tim Gurner and Harry Triguboff are two of our most prolific developers, and they’re contributing thousands of apartments to the skyline, while international developer SPG Land is also bringing the same level of density.
"Even a member of the UK Royal Family picked Main Beach as their first ever project in Australia. That to me suggests there's more growth in the local market, from local, interstate, and international buyers."