Gold Coast property market: Huge change needed to save property sector
Developers are being urged to make massive changes to their tower projects as new data reveals what’s really happening to the Gold Coast’s property sector. THE FINDINGS
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Developers are being urged to shrink the size of Gold Coast apartments in their towers warning large units are no longer affordable for regular buyers.
More than 15,000 people are moving to the city annually but construction and development are failing to keep pace.
The bulk of developments approved since the Covid-fuelled boom began four years ago have been large luxury units aimed at the wealthy or downsizers.
New data from Colliers revealed the average price of units on the Coast has hit $1.6m for the first time as the number of units sold during the final three months of 2023 were the second-lowest of any point in the previous three years.
Now, the Real Estate Institute of Queensland (REIQ) is now putting pressure on the new Gold Coast City Council to immediately act once its members are sworn in this month.
They want council to put its focus on developing more housing and a new City Plan “with clarity around maximum allowances, would give owners and developers the certainty they need to confidently proceed with building properties”.
They also want infrastructure fees slashed to fast-track projects. REIQ Gold Coast chairman Andrew Henderson (pictured right) said several “levers” were available to city leaders to reduce pressure on the market.
“While there are options to buy and rent on the Gold Coast, there is an acute shortage of properties at the affordable end of the market, driven largely by insufficient supply, so the REIQ would like to see the council have a concerted focus on improving housing supply on the Gold Coast,” he said.
“Steps such as introducing the new (City Plan) with clarity around maximum allowances, would give owners and developers the certainty they need to confidently proceed with building properties.
“We would also welcome streamlined processes surrounding infill housing, provided the projects meet certain criteria and zoning, to encourage more density close to existing infrastructure, transport, shopping centres and schools.”
Mr Henderson said there needed to be a stronger focus on approving smaller and more affordable units which were within reach of buyers.
“Incentives such as waiving or reducing infrastructure fees and charges on new “affordable housing” unit developments would help ease the upfront costs of building the most-needed housing types and could attract more product diversity in construction being delivered,” he said.
“Reducing Council rates on permanently rented investment properties to match that of owner-occupied properties could attract investors to help provide more rental housing on the Gold Coast.”
The Colliers data show unit sales in 2023 were down 13 per cent from the previous year and more than 50 per cent down on 2021.
However, while sales were down, the average price was 14.5 per cent higher than the previous record of $1.4m, set in September 2022 and a 45 per cent quarter-on-quarter increase from the $1.1m figure set in September 2023.
Colliers residential director David Higgins said the data showed the pressure on the market.
“The latest sales numbers reflect the ongoing challenges of meeting demand for new apartments on the Gold Coast,” he said.
“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 and 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 per cent of the sales over the quarter.”
Sales specialist company Total Property Group has warned developers must build small and affordable units as well as towers away from the coastal strip in “up and coming” suburbs” to meet demand.
Total director Adrian Parsons said it was the only way to ensure more people could buy.
“The apartment market is strong at both ends of the spectrum,” he said.
“Investors are coming back and homeowners now consider apartments a more obtainable and convenient option to traditional house and land living, so we encourage developers to think about providing smaller affordable apartments in some of the outer areas that have untapped potential.”
REVEALED: REASON WHY DEVELOPER IS “RIGHT SIZING” TOWER
Southport-based developer Aniko Group has revamped its planned $2bn, four-tower mega project at Mermaid Beach.
The Landmark is earmarked for a 1.3ha site on the corner of Seaview Ave and Gold Coast Highway next to Pacific Fair. and was given the green light in 2023 for three residential towers of 25, 30 and 40-storeys respectively, along with a 53-level supertower. Now, the masterplan has been revamped with a look at “right sizing” to make the units more affordable and therefore easier to sell.
The developer has asked council to green light one of its towers increasing from 30 to 35 storeys while making the units smaller.
This will increase the number of its from 170 to 240 and bringing the total number across the towers to 891 from 821.
Aniko boss George Mastrocostas said the changes were a “direct response to evolving market preferences”.
“The refinements allow us to introduce coastal apartment living at a price point that our buyers are seeking, one that simply doesn’t exist in the current market,” he said.
“The changes will allow us to bring to the market a more diverse range of apartments, strategically catering to rightsizers, thus enhancing our competitive edge.
“The new floorplans provide greater flexibility to create the style of apartments for which we are experiencing sustained demand,” said Mr. Mastrocostas.
“Our plans are in response to the industry’s increasing focus on high-end apartments at the expense of more affordable alternatives that resonate with rightsizers.
“While we also plan to introduce a collection of stylish, three-bedroom-plus residences, we also want to cater to a segment of the market that has been overlooked by developers in the Gold Coast’s prime beachside suburbs in recent years.”
The project was approved despite the objections of some Mermaid Beach residents who argued the development would dramatically alter the suburb’s lifestyle.
FIRST LOOK: PLANS FOR NEW SOUTHPORT TOWER
Plans for an office building in Southport have been scrapped, with a developer instead proposing a high-density two-tower residential project.
Sehar Reality has lodged plans with the Gold Coast City Council for a 134-unit project, spread across two towers on a 1736sq m site on the corer of Ferry Road and Spendelove Ave.
The Soma project, designed by Raunik Architects, is planned for being delivered in two stages, with the first being a 14-stoery mixed-used tower while the second will be 25-storeys.
A planning report lodged with the council says the previously planned office complex was abandoned in 2023” to allow for changes due to market feedback”.
“The proposed development has been designed and reimagined to respond to the vision of its CBD location to provide a mix of uses which will support both economic growth and provide much needed additional residential apartments,” the report reads.
It will have 136 carparking spaces, with 116 for residents, 14 for visitors and six to service the shops which will be situation on its ground floor.
The project is expected to be assessed by the council’s planning committee later this year.
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