Gold Coast now "level pegging" with other Australian property markets: Five minutes with Ray White Surfers Paradise Managing Director Andrew Bell
The Gold Coast apartment market has been one of, if not the most hotly contested markets across Australia in the off the plan apartment space.
Sell-outs are occurring at rapid pace, even before projects hit the open market.
Urban sat down with Andrew Bell, the managing director at Ray White Surfers Paradise, to discuss the market in 2021, and what he seems for the immediate future.
JC: How have you viewed the performance of the GC apartment market (established and or off the plan) in 2021, and what are the strongest positive and negative factors that will influence outcomes in 2022 and 2023?
AB: The Gold Coast apartment market has been outstanding throughout 2021.
A unprecedented demand by owner occupiers was timely met by many property owners of apartments who either could not get returns on their investments due to closed borders and lockdowns, who chose to sell their AirBNB or rental properties rather than hold the properties, or were under some financial pressure back home which also caused them to sell their properties.
This resulted in a decline of investment held ownership of many Gold Coast properties and the significant rise in new owner occupiers or people simply buying apartments for personal use on a regular basis in a year.
In years gone by whenever there was an economic downturn in Australia, many investors would put their properties on the market to sell and this caused an oversupply of apartments for sale causing prices to fall proportionally more than other markets in Australia.
With a higher degree of owner occupiers now in apartments, we are now on level pegging with other markets in Australia and it will contribute to the old boom and bust scenario on the Gold Coast.
The unit markets are also the beneficiary of significant downsizing of people out of their houses whether here locally on the Gold Coast or indeed migrator's from interstate who chose to move into large apartments for the next phase of their life. This has seen significant growth and price increase for one per floor apartments or large 3 bedroom apartments. With an undersupply of such apartments on the Coast, there has been a significant amount of new development work to cater for this market.
With the Gold Coast market now the number one go-to market for migrator's, many are opting for apartment lifestyle so the influence over 2022/23 will be the continuous development of new apartment buildings to meet this demand. New architecture, new buildings and new technical capabilities in newer buildings has also seen a flurry of new generation buildings which are simply stunning and will add to the appeal of the Coast. With international borders opening and the ease of return of expats and significant spike of enquiries from overseas investors, a strong platform has been established to meet those demands.
JC: What trend (short term or long term) has prompted your greatest enthusiasm for the GC apartment market, and what is the issue of most concern to you and or your clients?
AB: What has prompted our greatest enthusiasm is the incredible volume of people looking to buy apartments and now an increasing supply of new brilliantly designed buildings to meet that demand. It was certainly frustrating over the past year to simply not have sufficient properties to offer the buyer demand but now it's so satisfying to be able to help people with a greater degree of choice with the building that they chose to be in.
The only issue of concern for me, is that there is a reality that some of the proposed buildings may ultimately not ever get built. Building costs have risen sharply and as a result some buildings where perhaps developers have paid too much for the land or where they are poorly funded developments, may find that they can't proceed to construction and that would prove frustrating for buyers who had made commitments to off the plan sales.
It would be important for all buyers to make sure they are buying in buildings where developers have a proven track record and where clear undertakings can be provided that the buildings have either started construction or are starting construction shortly.
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