Gold Coast commercial transactions fell in 2023
Commercial transactions on the Gold Coast significantly diminished in 2023. Image: Canva.
  • The Gold Coast's commercial transactions declined by over a third in 2023.
  • Higher interest rates and cost-of-living impacted the retail sector.
  • The industrial sector accounted for more than half of the year's total sales by value.

The Gold Coast’s commercial market transactions have seen a huge dip this year, according to the latest Colliers data.

With a gross regional product (GRP) of about $41 billion in 2021/22, the Gold Coast’s economy is an important slice of Queensland’s economy, accounting for 10.6% of the State’s gross state product (GSP).

Although it is a city known for its strong fundamentals, the Gold Coast’s transactions involving retail, office, and industrial sectors have totalled $648 million, which is down 39% on sales recorded in 2022.

Why the drop?

Earlier this year, Colliers director of industrial, Daniel Coburn said the issue of industrial land shortage had become even more acute in 2023.

“That’s great news for investors already in the market as yields and capital values are on the rise, but it’s become much more challenging for the many businesses looking to establish a base on the Gold Coast.”

Colliers director, Steven King, pointed to the lower transactional activity as evidence of a lack of high quality stock being placed on the market.

“If you looked at the data at face value and saw a 39% drop in transactional activity across the sector, you would automatically assume we are in some kind of downturn,” said King.

Steven King Colliers Director
Steven King. Image: Supplied.

“But the reality of the situation is that institutional and private investors are holding onto their assets because of the buoyant sentiment on the Gold Coast, driven by migration and infrastructure.

“This is resulting in a reduction in stock coming onto the market which has significantly reduced the number of transactions across the retail, industrial and office markets.”

King also agreed with Coburn’s point, insofar as private and institutional investors who want, but are struggling, to get a foothold in the Gold Coast’s market.

Tightened household budgets impacting retail sector

Colliers’ Gold Coast Market Report September 2023, which looked at trends impacting the Gold Coast’s commercial sector in the first half of 2023, noted that rising interest rates constrained disposable income and led to a decline in retail spending.

Report author, Pragya Sharma, noted “In the short term, retail trade will continue to be impacted as consumers adapt buying habits and embrace cost saving practices.

“Additionally, the retail market will be impacted by international visitor numbers, which have increased since border reopening but remain significantly lower than 2019 levels.”

Rate rises underpin diminished investor sentiment

Sharma noted that Queensland was one of the most active markets in Australia for retail transactions and investment activity in 2022.

However, 2023 was a different story.

“The sales volume for this year has been impacted by higher borrowing costs and a general weakening in investor sentiment.”

Pragya Sharma, Colliers

“Only $216.8 million worth of transactions have changed hands so far this year, marking a substantial 92% drop from the sales volume in 2022.

“However, there is an expectation that buyer sentiment will improve once market certainty is established, which is closely tied to the conclusion interest rate hikes.”

Assessing the industrial market

The industrial sector is certainly not immune to the vagaries of high building costs, labour shortages, and the conditions of the economy.

However, King noted that the industrial market accounted for more than 50% of 2023’s total sales by value.

Moreover, Colliers’ Gold Coast Market Overview revealed industrial sales totalled $346 million, an improvement on $285 million from last year.

You May Also Like

Work from home is here to stay, and Australia’s secondary offices are at a turning point

Secondary office assets face challenges with poor uptake and declining values, especially in B and C-grade properties.

Why Australia needs more industrial assets to boost productivity and growth

A new report reveals that Australia’s industrial assets handle over $1.2 trillion worth of products annually.

Sydney’s retail sector continues to improve, with one area boasting zero vacancy

Vacancy rates for Sydney’s prime retail core have dropped to 8.3%, with the one area recording vacancy rates of zero.

Construction titan Beehive Homes finds its new home in a prime Williamstown North warehouse

NSL Property Group facilitated the $650,000 deal, highlighting the property’s prime location and industrial versatility.

Experts Corner by The Property Tribune

Ko & NPA partner to launch several co-owned luxury properties at Mermaid Beach, Gold Coast

Ko's partnership with NPA Projects provides more opportunities to co-own off-the-plan holiday residences, including exclusive Gold Coast properties

Continue reading

Top Articles

Expert tips on how to be a successful property investor

Property expert and buyer's agent, Lloyd Edge, shares his insights.

Australian commercial property update: Industrial and tourism assets lead the pack in trying times

Commercial assets have faced volatility recently, driven by financing changes and demand fluctuations from institutions and funds.

WA has emerged as a property investment hub, and why that's a good thing

Eastern investors chase Perth's affordability, doubling the distance between home and investment in 2023, reveals MCG research.