Hilton Surfers Paradise resale price collapse for all but one exiting property investor

The Hilton development in Surfers Paradise will go down in history as one of the worst loss-making Gold Coast high rises for property investors, with virtually every initial off-the-plan apartment buyer losing money.

Property Observer has found 40 of 41 apartments in the ill-fated development, resold  at big losses. Just one of the original buyers managed to resell an apartment at an increased price – a measly $5000 extra after six years.

Some of the worst losses were at the prestige end. Unit 2205 originally sold in June 2012 for $2.435 million. It then sold six months later for $1.675 million –a loss of $760,000.

Unit 2305 originally sold off the plan in 2006 for $2.465 million. It then resold in May 2012 for $1.725 million – a loss of $740,000.

Unit 23202 originally sold in June 2012 for $1.9 million but resold in February this year for $1.3 million – a loss of $600,000.

And unit 3401 originally sold off the plan for $1.81 million in 2006 and then for $1.3 million in April 2012, a loss of $510,000.

But it’s not just early investor who lost money. Investors who bought as recently as 2012 have lost significant sums of money.

Unit 3603 sold in June 2012 for $1.116 million, and sold four months later for a $121,000 loss.

And unit 3201 sold in July 2012 for $950,000 and resold in April this year at a $35,000 loss.

The only original buyer to sell at a higher price waited six years before selling. They bought the three bedroom apartment at unit 3204 in 2007 for $1.295 million, selling at $1.3 million in February this year – a $5000 return.

Just one apartment remains unsold in the Boulevard Tower and seven in the Orchid tower with slashed prices attracting a surge of buyers in the past year.

The Boulevard tower has 186 units made up of one, two and three bedroom apartments.

The 57-level Orchid Tower houses the 169-room Hilton Hotel and 224 apartments.

In 2007, off-the-plan apartments were priced from $594,000 for one-bedroom units to $1 million-plus for two-bedroom units with study.

The developers are now selling the last eight remaining apartments. Three Sixty was recently marketing a two bedroom, two bathroom unit on the 25th floor which was being sold for $1.025 million but is now priced at $785,000.

A two bedroom, two bathroom unit on the 10th floor was being sold at $935,000 but is now being sold for $705,000. And a two bedroom, two bathroom unit on the third floor which was being marketed at $799,000 is now being sold for $665,000.

Peter Malady, managing director of 360 Project Marketing - the group marketing the remaining eight units -  says units are being discounted by as much as 36% from their original asking prices.

Buyers from all around the world have been snapping up apartments now - coming from China, South East Asia, New Zealand, domestic and local.

Malady says most of the buyers have been investors but with some owner occupiers.

Construction started on the $700 million project in early 2008 but was halted later that year when it was crippled by debt and funding issues. By September, developers Raptis Group were under the administration of Deloitte who with the backing of ANZ managed to restart construction with the help of Brookfield Multiplex in 2009.

The Boulevard Tower was finished in late-2010 and the whole project officially opened on September 14 after the Orchid tower was completed.

Raptis bought the site, formerly the Dolphin Arcade, for $59.3 million in 2005 from Villa World, which had bought it for $32.7 million in 2002.

Construction of the hotel was triggered by increased tourism from China and India.

In July 2012 it was reported 101 buyers were being sued by ANZ after failing to settle on their apartments.

"Out of the 410 apartments we’d sold about 385 of but at settlement time a number of clients weren't in a position to settle. Valuations had moved not only in the Gold Coast Hilton project but also family homes," Malady told Property Observer.

Malady says there was a recent surge in sales.

"It’s been strong this year, absolutely and reasonably last year. There’s no supply here on the Gold Coast. There’s limited supply left in the three supers towers - Soul, Oracle and Hilton." 

There has been more than $54 million in apartment sales this year.