Gold Coast property: Massive shortfall of units as buying frenzy continues

The Gold Coast’s booming property industry is facing a dramatic shortage of available units, with a shock report revealing how far demand exceeds supply.

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THE Gold Coast will have no new apartments for sale in nine months if fresh stock does not come on the market.

It is worse on the southern Gold Coast where supply is forecast to last less than three months.

An apartment insights report by consulting firm Urbis shows sales ballooned 97 per cent in the final quarter of 2020 as interstate buyers jostled with Gold Coast owner-occupiers — and we are paying for it now.

In 2020, 22 new projects contained a total 1411 apartments, down from the 2164 units built in 2019.

The average number of apartments in new projects opened between 2018 and 2020 dropped from 91.8 to 66.8.

Based on current quarterly sales and supply, the report says the city has only 8.3 months supply of new apartments — if no new projects are finished. The Southern Beaches Precinct has only 2.6 months supply, but several projects are expected to launch in the next six months. The Southport and Main Beach area has about 4.2 months worth of stock.

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The Gold Coast’s property market is booming.

Urbis senior consultant Lynda Campbell said pressure was building on the Gold Coast on the back of a rapidly increasing population: “Declining supply of new apartments, extremely low vacancy rates of both apartments and houses across the Gold Coast and increasing rents may impact affordability,” she said.

“With tourism numbers not expected to return to normal until 2024 and overseas migration on hold, the Gold Coast is relying on the local market.

Urbis senior consultant Lynda Campbell. Picture: Scott Fletcher

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“We will have to wait and see whether the introduction of the COVID-19 vaccine will change this. However, with 65 per cent of surveyed sales being to owner-occupiers, the local market is well-placed.

“Additionally, infrastructure investment has made the Gold Coast more appealing than ever. With development sites already hard to come by, developers need to keep a sharp eye out for potential opportunities.”

The Gold Coast new apartment market recorded 375 sales in the final three months of 2020, the strongest quarterly result since 2017 and 97 per cent above the July-September quarter.

Units are at a premium.

Sales were driven by demand from owner-occupiers looking for larger apartments in smaller-scale projects, the Urbis report revealed

“The trend towards more working from home has also driven sales of larger apartments with third bedrooms used as offices and buyers taking advantage of the lifestyle benefits the Gold Coast offers,” it reads.

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The Coast’s population has seen a dramatic uptick following the COVID-19 pandemic, with some real estate agents tipping property prices to boom by up to 20 per cent.

The population increase has also put pressure on renters, with vacancy levels remaining at record lows.

Real Estate Institute of Queensland data released last month showed vacancy rates fell to 0.9 per cent in December, the first time rates fell below 1 per cent.

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Experienced Gold Coast real estate agents say they are being run off their feet dealing with the sheer number of sales and rental inquiries. Demand is coming from both local and interstate buyers.

Jane Doogan, of LJ Hooker Solutions Nerang, said she had put on extra staff to cope with demand.

“The overall number of inquires has increased while the number of available properties has decreased,” she said.

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Top real estate agent Jane Doogan. Photo: Kit Wise

“We have had to put on more staff to deal with this very active market and we will probably put on more.

“Some properties have increased in value by more than $100,000 in the past six months.”

The Urban Development Institution of Australia Queensland has called for the Gold Coast City Council to make decisions about which suburbs will be targeted for high-density development to cope with the dramatically increasing population.

For months, leading developers and industry figures have warned the council to ensure there is enough new housing to accommodate the demand or face a “rental squeeze”.

To do this, council has been urged to push forward with amendments to the City Plan that would allow for high-density development.

Gold Coast Mayor, Tom Tate. Picture: Jerad Williams

Mayor Tom Tate said the council would target the southern suburbs of Kirra, Coolangatta, Palm Beach and Bilinga for high-density development, while a state government taskforce is expected to investigate transforming the Gold Coast’s northern cane fields into towns to help ease pressure on crowded established suburbs.

Cr Tate this month said the city’s developers would increasingly be forced to turn to unit developers to house new residents.

“We are running out of greenfield space so what have we got left? Going up instead of sprawling out, so we need to look at this to create more affordable product as well as the appropriate community infrastructure,” he said.

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Originally published as Gold Coast property: Massive shortfall of units as buying frenzy continues