Gold Coast property market: Surprise change coming to Gold Coast unit market

There a huge change coming to the Gold Coast’s struggling unit market which will see more towers built in 2023 than previously expected. FIND OUT WHY

BANKS and other big lenders are showing faith in the Gold Coast apartment market by actively seeking to back developers, says a man who is its major seller of development sites.

Antonio Mercuri, who sold 25 sites in 2022 via his GV Property Group, said the interest was a dramatic reversal of attitudes a few years ago, when funders steered clear of the Gold Coast.

“Today they are out there working to build relationships with developers, people who are targeting both the boutique and high-rise apartment projects.

“These funders see a bright future for such projects – they perceive the Gold Coast property market generally is undervalued compared to major states like NSW and Victoria.”

Antonio Mercuri

Mr Mercuri said the “bright future” view was shared by out-of-town developers who were targeting the city, especially in the lifestyle market.

“Some have landed their first site but others, with success behind them, are onto their second and third buys.

“For example, Sydney’s Daascon group has made its debut buy, Melbourne’s Tim Gurner has made two, and Little Projects has picked up three sites.”

A raft of new tower projects across the Gold Coast are expected to rise in the next year including the fast-tracked second stage of the $380m Kirra Point project, Meriton’s Iconica project, which will have towers of 76 and 50-storeys respectively, Mr Gurner‘s $1.7bn, four-tower La Pelago development at Budds Beach and Tony Fung’s twin tower Minnette project at Narrowneck.

Council has ticked off hundreds of other projects in the past two years but are yet to begin construction.

With pressure growing on the city’s housing market thanks to long-running undersupply issues, lenders are seeing opportunities on the Gold Coast.

Dane Atherton, director of Harcourts Coastal. Picture Glenn Hampson

Harcourt Coastal boss Dane Atherton said demand remained high.

“Notwithstanding the Covid property boom, the Gold Coast has shown the most resilience in the past year and has absorbed the interest rate rises well,” he said.

“It is no surprise banks are looking at our region and want to back the market because there is strong pent-up demand.

“I was at lunch with some Sydney developers the other day and they still love the Gold Coast.”

However, Colliers boss Steven King said not all developers were viewed the same way.

“We deal with the banks a lot and they still need to do business and are happy to work with proven developers who have stood the test of time,” he said.

“It’s the new ones with no existing relationships who are finding it hard to get off the ground.

“There is definitely still demand from buyers but it’s not a question of projects not selling, buyers also want to know it is happening and if there is a builder engaged.”

Colliers director Steven King. Photo: Supplied

Mr Mercuri said the ‘lifestyle design’ movement was a key factor in interstate developers focusing on the Gold Coast.

“Buyers are making lifestyle a key factor in decisions – many want to escape the big smoke of major cities and enjoy relaxed coastal living.

“Developers have twigged to this and are satisfying their needs.”

Mr Mercuri, whose 2022 sales ranged from $2.5 million to $22 million, said he did not expect ‘distress’ sales of sites by developers to be a factor in 2023.

“In most cases, retaining sites has become a lot easier due to a dramatic increase in land values over the last year or two.

“Those who have yet to demolish buildings are enjoying rental income, which is offsetting holding costs.”

TOWER TO RISE IN 2023

Artist impression of MRCB's Surfers Paradise tower

A MALAYSIAN developer will build a 51-storey ­supertower in the heart of ­Surfers Paradise next year after getting the green light.

Developer MRCB International’s $300m, 280-unit project will begin rising in mid-late 2023, with its apartments being brought to the market during the festive season.

It is earmarked for a site fronting Surfers Paradise Boulevard and Vista and Thornton streets

The high-rise will be MRCB’s third Australian project in eight years and the first in Queensland.

MRCB is a wholly-owned subsidiary of the publicly-listed Malaysian Resources Corporation Berhad.

Artist impression of MRCB's Surfers Paradise tower

MRCB CEO Ravi Krishnan said the residential project was being targeted at the growing number of people migrating to the Gold Coast.

“We noticed the growth in interstate migration to the Gold Coast from the southern states, and the high demand within the region,” he said.

“This, coupled with the forecasted lack of dwelling supply, drove our decision to invest in Surfers Paradise and the fact that the site that we purchased was in an enviable location influenced the decision.

“Inevitably, the Gold Coast will continue to grow as a region and the trend for footloose industries to locate themselves in areas with beautiful weather, tourism opportunities, and solid employment, have meant we couldn’t afford to miss this opportunity to invest in the Gold Coast.”

Originally published as Gold Coast property market: Surprise change coming to Gold Coast unit market