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THE GOLD Coast has been rated the most undervalued apartment market in Australian by Colliers International, with the price differential now sitting as much as two thirds below the country’s hotspot, Sydney.
Colliers’ residential director Tony Holland says the difference should drive a long-awaited growth phase for the Gold Coast market which has traditionally benefited in the aftermath of growth in southern markets.
“The Gold Coast is sitting well behind Sydney, Melbourne and Brisbane on a per-square-metre rate for apartments, and that’s good,” says Holland.
He says Bondi apartments are selling around $20,000 per square metre, compared to the Gold Coast at around $7500.
“Prior to the GFC, apartments on the Gold Coast were on par with Melbourne at $10,000 to $12,000 per square metre.
“The Gold Coast surged because of the equity created in southern markets, yet now with those markets having built a fair bit of steam, the only significant market not to move price wise has been the Gold Coast.
“In fact the Gold Coast market has not even been tested because there has been no new stock.”
Holland says new apartment stock on the Gold Coast has fallen to a 30-year low, with supply sitting around 700.
A number of new projects are under way to fill the gap, including Meriton Apartments’ 55-level Sundale tower at Southport, Ho Bee’s Rhapsody at Surfers Paradise and Morris Property Group’s Synergy at Broadbeach.
“The number of cranes in the sky is likely to double in six months with a number of developers now moving forward with launching their projects to market in the next 60 days.”
Holland says he does not see this leading to a glut of stock.
“Back in 2004, we had six or seven buildings going up in one area, at Broadbeach, in a short space of time.
“What we are seeing now is a more orderly market. While funders are looking to support developers again, they are being very stringent.
“There is a sensibility of projects coming onto the market, but there is a significant gap.
“People are starting to look, but if there was more stock to sell now more properties would be selling.”
Holland says confidence has risen on the back of major infrastructure projects, and upgrades announced by Pacific Fair and Jupiters Casino.
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