Prices surge 45% in three months due to supply shortages
The average price of new apartments on the Gold Coast has surpassed $1.6 million for the first time, according to recent research from Colliers.
Despite the volume of sales for new apartments during this period being among the lowest in three years, prices have seen a 14.5% increase from the previous high of $1.44 million in the September quarter of 2022, marking a 45% rise from $1.13 million at the end of the same period last year.
The latest Gold Coast Residential Market Report by Colliers has found that only 236 new apartments were sold in the December quarter. This figure slightly exceeds the 211 sales recorded in the June quarter and is significantly lower than the 470 sales in the September quarter.
The total sales of 1,205 new apartments in 2023 represent a 13% decrease from the 1,389 sales in 2022 and a stark contrast to the 2,492 apartments sold in 2021, during the height of the national construction boom.
“The latest sales numbers reflect the ongoing challenges of meeting demand for new apartments on the Gold Coast,” said David Higgins, director of residential for the Gold Coast at Colliers. “We are really seeing residential projects struggling now out of the ground, due to the massive increase in construction costs, making many projects just not feasible in current cycle.
“Sales volumes are lower while average prices have spiked higher as supply and variety of stock remains constrained. It’s causing a massive fluctuation of pricing in the market. The pricing is also reflected in a resurgence of owner-occupiers who accounted for 55% of the sales over the quarter.”
The central suburbs of Broadbeach and Surfers Paradise led the market in terms of sales and supply throughout 2023, with approximately 70% of total sales occurring in these areas.
The Gold Coast Central precinct, including areas from Southport-Labrador to Burleigh Heads, emerged as a development hotspot with 20 of the 30 apartment projects available for sale located within this zone. Currently, only 1,489 apartments remain available for sale out of the 4,471 initially marketed.
Colliers’ forecast suggests that around 2,850 apartments will be completed on the Gold Coast in 2024. However, this is unlikely to alleviate supply constraints as most of these units have already been pre-sold in previous years.
Additionally, Colliers’ research highlights that low vacancy rates on the Gold Coast have contributed to a 10% increase in median weekly apartment rental rates, from $682 to $750 over the past year.
“Increasing rental yields reflect the substantial growth of the investment market across the Gold Coast new apartment market,” Higgins said. “The apartment market continues to be supported by local and interstate investors who are taking advantage of the strong yields.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
