Gold Coast apartment market down but not out as supply hits new record low

The Gold Coast apartment boom may have come off its 2021 highs, but solid sales reported in the first three months of this year reveal continuing momentum as new apartment supply hits a record low.

Data compiled by property consultancy Urbis has revealed the Gold Coast recorded 377 new apartment sales in the March quarter, well off the 2021 high of 742 in the equivalent quarter last year. The result also falls short of last year’s low of 450 sales for the June quarter.

But the data continues to highlight the ongoing shortage of new apartments with just 411 new apartments remaining for sale at the end of March. This is the lowest number ever recorded by Urbis since it began monitoring the new apartment market in 2014. This is despite 11 new projects being launched during the quarter.

Based on the current quarterly sales rate, the Gold Coast has just 3.3 months of supply remaining, although Urbis notes that this figure will change once a number of large-scale projects are released to the market over the coming months.

“Sales have certainly eased off their 2021 highs in the latest quarter, but that’s not unexpected considering the high levels achieved last year,” said Urbis director Lynda Campbell.

“The key statistic this quarter is the drop in the number of apartments for sale to a record low, which shows the supply side is still failing to keep up with demand. It’s unclear whether the supply shortage had any bearing on overall sales for the March quarter as the urgency to buy that we saw in 2021 is showing signs of easing.

“However, there are several large projects coming to the market and we will be watching these sales closely as the market digests rising interest rates and any new initiatives at the federal level.

“The obvious concerns surrounding construction costs and supply chain issues means that we do not expect to see as many projects make it out of the ground as in previous years while volatility and viability are managed.”

After a stellar run of sales in 2021, with a record 2,492 new apartments sold, the current quarterly sales rate could translate into another high-performing year for the apartment market.

Prior to 2021, the Gold Coast market absorbed an average of 1,100 new apartments a year with a high of 1,600 in 2015 and a low of 800 in 2017. If the March-quarter sales of 377 are repeated throughout the year, 2022 could become the third biggest year for sales behind 2015.

“The dominant buyer profile for Gold Coast apartments remains owner occupiers looking for larger apartments,” said Ms Campbell.

“Almost a third of the sales – about 31 per cent – were at price points above $1 million, which reflects the general increase in apartment values.”

The Gold Coast Central precinct, which includes Southport, Surfers Paradise and Broadbeach, had the highest number of sales in the March quarter (243), followed by the North Shore (90), which includes Hope Island, which is where all 90 sales were made.

Sales in the Southern Beaches precinct (from Mermaid Beach to Coolangatta) fell to 27, the lowest since late 2017. However, Urbis notes that this is due to limited supply with only 67 apartments remaining for sale in this precinct at the end of March.

The Coastal Fringe precinct, which stretches west from Robina to Benowa, also has low supply levels with just 17 apartments for sale at the end of March.