The growing trend of the builder-developer, and why it impacts the Gold Coast off the plan apartment market more than most
The builder-developer model isn't new.
Some of Queensland's best developers have been vertically integrated builder-developer for decades.
The challenging construction environment on the Gold Coast, characterized by a substantial increase in apartment projects since COVID-19, along with limited labor resources and rising costs for materials and labor, has led some developers to adjust their strategies to incorporate construction as part of their core service.
The likes of Morris Property Group and Mosaic Property Group have had their own building arm for years. They've created the blueprint that a lot of developers on the Gold Coast are looking toward.
Siera Group, who made the move from Brisbane to the Gold Coast a few years ago, has for a long time had construction in-house when building luxury townhouse developments across Brisbane's inner ring. They've now decided to do the same at Tapestry on Chevron Island.
Marquee Development Partners have brought construction in-house for La Bella Palm Beach, as have Iris Capital for its $1 billion Broadbeach development Victoria & Albert and Steer Developments for its COTE Palm Beach project.
Antonio Mercuri, who heads up site amalgamation specialists GV Property Group, says a key point the team look for when selling a site is if the buyer (developer) has a genuine track record of finishing their projects.
“If you see a high or midrise under construction on the Gold Coast at the moment, chances are, they’re a builder-developer,” Mercuri says.
“It's been a trend in the past couple of years, and very much so in the past 12 months.
“There are so many builders collapsing in Queensland at the moment under that rising cost of construction, and that’s leaving limited competition in the market. It’s forcing a change and as a result, many developers have started building themselves. They’re the ones delivering on these projects - it’s no coincidence."
Mercuri says if someone is looking to buy off the plan, they should do their homework and check if they’re either a builder developer, or in the least, have a builder who they’ve worked alongside in the past.
“It’s devastating for a buyer who’s handed over a hard earned deposit, only to be told their apartment simply isn't being built.
“Ideally, the project goes up and their unit appreciates in value but that’s not always the case.”
