THE Gold Coast is emerging as Australia's most resilient property market with capacity to ride out a potential collapse in the capital cities' apartment boom, even though sales have hit their highest levels in eight years, says a property researcher.
The latest Urbis Gold Coast Apartment Essentials report for the September quarter has revealed there were 496 apartment sales during the period, up from 304 in the June quarter.
The rise was achieved despite a fall in offshore buyer activity.
Urbis senior consultant Lynda Campbell says buyers from interstate and buyers from Brisbane and the Gold Coast are making up the shortfall, driving sales activity to a post-GFC peak in the September quarter.
The results are based on a survey of 61 projects that are either under way or off the plan, although it excludes the $1 billion Jewel project.
Jewel developer Wanda Ridong did not participate in the Urbis survey, although Business News Australia has approached the Chinese development group for an update on the project which is bringing more than 500 apartments to the market across three towers.
According to the Urbis report, the Gold Coast market had 1375 new apartments for sale at the end of September, up from 1145 in the June quarter. At the current sales rate of 1375 apartments for the latest 12-month period, the Gold Coast has a little over a year's supply of new apartments.
Campbell says the current supply and demand figures mean the Gold Coast apartment market is one of the most stable in the country, although she concedes much of that is led by a rise in conservativism among developers targeting the Coast.
"There's no real overheating in this market, no mad rush like we've seen in the past," she says.
"It's a very steady and stable market, while most of the other markets are definitely looking at oversupply. There's a lot in the pipeline but not all of it coming to market at once.
"While there has been a softening in overseas buyer activity, there has definitely been an increase in buyers from southern states and from Brisbane and the Gold Coast."
Campbell says the Gold Coast is better positioned now than at any time before the GFC to cope with a potential downturn in the apartment market.
"Current apartment supply is half what it was post GFC at 1300 compared to about 2600," she says.
"Compared to other peak cycles we've had, this one is a bit more conservative. Developers are doing their homework and their research, which is a hangover from the GFC when they got badly burnt."
Campbell says the fundamentals for the Gold Coast market remain strong, although she says this is being overlooked by many developers who have held back on projects.
There is also growing evidence among developers that banks are making the task harder with some revealing high pre-sale requirements before funding projects. Campbell says she is aware of industry talk regarding funding issues for developments.
"However, this is probably the best time for the Gold Coast with population growth, affordability and the Commonwealth Games and major infrastructure spending - all the dots are joining," she says.
The Urbis research has revealed average price gains of about $76,000 for central Gold Coast projects those located in Broadbeach, Surfers Paradise and Southport over the September quarter with the average price now sitting to $685,069.
The overall weighted average sale price for new apartments on the Gold Coast lifted to $596,149 from $579,999 in the same period.
Supply issues remain on the southern Gold Coast, with just 63 new apartments for sale, although a new development planned by Sunland Group (ASX:SDG) at Palm Beach will go some way to addressing this.
The Gold Coast market is evenly split between low-rise and high rise projects, at the rate of 30 and 31 respectively.
More than half the sales in the September quarter occurred in the fringe markets, or those to the west of the major central markets between Broadbeach and Southport.
Urbis is forecasting another 33 apartment projects will be released to the market over the next six months, up from 22 a year earlier. Twelve of these are located in Broadbeach and Surfers Paradise.
Pending projects on the drawing board across the Gold Coast will potentially bring on line 3944 apartments.
"Some of these projects will be staged and may not have the total number of apartments released over the following six months but will be rolled out over several years," says Campbell.
"With a sales rate of 1494 during 2015 and 2016 set to eclipse this, the supply level is keeping pace with demand."
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