SIGNS OF RECOVERY DESPITE GRIM PRODAP REPORT

THE Gold Coast’s development industry continues to struggle as sales of vacant housing lots and new house-and-land packages track well below -20 year averages, says the Prodap Report.

The report’s author, Bill Morris, says combined sales of new housing and vacant land have been running at under 1000 a year, which compares with the long-term average of 4200 a year since 1995.

The dour sales figures are reflected in a 4.5 per cent fall in Gold Coast house prices and a 7.3 per cent fall in unit prices over calendar 2012.

Morris says the Coast’s housing development sector has not seen such a “grim picture” since the 1981-82 recession.

“The sad news is that not even record low interest rates seem to have had any effect on the volume of sales; sad but true,” says Morris.

He says the city council’s Construction Kickstart initiative, which has cut infrastructure charges on a broad range of developments, appears to have had no effect on new production.

However, Master Builders’ regional manager John Duncalfe tells Gold Coast Business News he is seeing early signs of improvement in the city’s construction sector.

Duncalf says the Construction Kickstart may only now be delivering some stimulus to the sector, although he says a clearer picture may emerge when the first round of the program is completed in March.

Morris says the Coast’s construction slump has been driven by rising costs, with established houses now much cheaper, and in many cases better located, than new houses.

“Land prices are still too high, representing more than 50 per cent of the price of the average home,” says Morris.

“This was not case 10 years ago, when the average serviced block cost $60,000. In 10 years that has risen to $220,000, almost 300 per cent, or 30 per cent per annum.”

Morris says land prices have escalated “out of all proportion” to house prices over the past 10 years.

“There needs to be a new era of thinking about what level of services constitutes an ‘acceptable’ house lot.”

The Prodap Report is published quarterly and contains a database of developer sales and stock levels on the Gold Coast.

Help us deliver quality journalism to you.
As a free and independent news site providing daily updates
during a period of unprecedented challenges for businesses everywhere
we call on your support

Looking for a credit or charge card that’s built for your business? Try American Express
Partner Content
A good credit card should work for you, not against you, and let you and your business ...
American Express
Advertisement

Related Stories

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

Devine abandons Alba to upsize at Burleigh Heads with $400m Burly tower

In a sign that the heat has yet to come out of the Gold Coast prope...

Mandatory COVID isolation to end nationally mid-October

Mandatory COVID isolation to end nationally mid-October

National Cabinet has today determined that mandatory isolation peri...

Sunset on the horizon in 2023 for developer Sunland

Sunset on the horizon in 2023 for developer Sunland

A developer behind some of the Gold Coast's most iconic buildin...

Unique ‘floating homes’ planned for $40m Dockside Port Vincent tourism hub

Unique ‘floating homes’ planned for $40m Dockside Port Vincent tourism hub

The sleepy rural hamlet of Port Vincent in South Australia is set t...