Gold Coast property prices: Real reason why land values will remain high
Space in the Gold Coast’s property market is already at a premium but new data reveals vacancies will plummet even further in the next year.
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Gold Coast office space is at a premium, with new data revealing vacancies will plummet in the next year.
Property Council of Australia data analysed by Colliers International shows the sector will tighten in the remaining months of 2022 and well into 2023, despite new office buildings coming on the market.
The data showed the Gold Coast office vacancy rate fell from 10.1 per cent to 8.1 per cent in the six months to July, the lowest level since 2007.
Bede Blatchford, director of Colliers Gold Coast office leasing, said the tightest suburbs for office space were Southport, Surfers Paradise, Bundall, Broadbeach and Robina-Varsity Lakes.
“The momentum has been building for a few years now, backed by strong demand fundamentals and a tight supply pipeline and as a result, we forecast the Gold Coast’s office vacancy rate will fall to about 7 per cent by early next year,” he said.
“That’s likely to lead to much higher activity in these non-core precincts over the next six to 12 months, as commercial occupiers look to both lifestyle precincts and locations that provide greater connectivity to Brisbane and the Pacific Motorway M1 amid less availability.
“This is especially so for occupiers seeking fitted offices and continuous space of 1,000sq m or more.”
The Bulletin last week revealed a Melbourne consortium wants to build a 60-storey office supertower as part of a Southport development which will include Australia’s tallest residential tower.
The tower, expected to have more than 12,000sq m of office space, comes months after the Bulletin revealed the city faced a critical shortage of office space.
The consortium behind the project includes Melbourne-based funds manager Payton Group, leading Australian architect BKK, town planning firm Urbis, and engineering consultancy Van der Meer.
It has been welcomed by city leaders as the answer to the city’s office shortage.
‘Severe crisis’: Crushing blow for desperate Coast house hunters
Gold Coast house prices will be artificially inflated for years to come, with the city squeezed by plummeting housing approvals and increasing migration.
The Coast is at the epicentre of dropping dwelling approvals, which fell 17.2 per cent across the country in July 2022 according to new data released this month by the Australian Bureau of Statistics.
Queensland approvals fell more than 13 per cent month-on-month between June and July.
The Gold Coast City Council is now investigating land at Highland Park and Gaven North for new residential lots and dwellings.
DEVELOPMENT SUBURB BY SUBURB
If given the go-ahead, these sites will be among just a handful of new development zones within the city.
Urban Development Institute of Australia (UDIA) Queensland CEO Kirsty Chessher-Brown told the Bulletin there was “no silver bullet” to solve the situation.
While property prices are falling across the country, Ms Chessher-Brown warned dwindling dwelling approvals, a lack of new developments breaking ground and strong migration figures would leave Coast properties even more valuable.
She blamed a “nest of really complex issues” including a skills shortage and building material availability which was causing developers to delay or cancel plans to build on the Gold Coast.
“We are experiencing a moderation (of development approvals) but the Gold Coast is already experiencing a severe housing affordability crisis which shows no signs of abating,’ she said.
“We are not seeing any let-up in the levels of demand, which remains strong, and this will have a significant impact on the amount of stock being produced and brought to market.
“This will in turn see the market tightened even further, which is an issue when we are seeing vacancy rates remain stubbornly consistent at 0.6 per cent, far lower than 3 per cent, which is what you have in a balanced market.”
The Gold Coast’s population is growing by more than 15,000 people annually, while the median house price now sits just below $1m.
The housing crisis is only worsened as the rate of tower development on the coastal spine slows on the back of skyrocketing construction costs which has sparked predictions that one in five high-rises currently before council will never be built.
The bulk of the city’s remaining housing stock is in the northern suburbs of Coomera and Pimpama, as well as the giant under-construction $1.5bn Skyridge estate at Worongary which will ultimately be home to 10,000 people.
However, Skyridge, which is under construction, will take 15 years to deliver.
Master Builders Queensland Gold Coast regional manager Adam Profke said the dramatic decline on housing approvals would not be felt immediately by locals, as tradies continued to work on projects approved during the 2020-21 boom period.
“These figures are actually a great lead-in indicator and here on the Gold Coast there is still a good 12 months of work for us,” he said.
“It’s because of the boom so we are still finishing off homes and buildings approved during the period, while these figures are focused on new house construction which is declining on the Gold Coast because we have no available land to build on.
“For the Gold Coast, we expect these figures to be even more severe.”
However, Mr Profke said tradies were not short of work, with demand in the home renovation sector remaining strong.
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