- 1,192 apartment sales recorded so far in 2021, 22% more than the whole of 2020
- Even with 1,000 new apartments being built, a supply shortage looms, based on trends
- The weighted average sale price has surged by $141,906 to $1.366 million
What happens if you sell most of your stock for good prices thanks to high demand, and do not replenish supply at the same rate? You end up with a shortage.
That’s what’s happening on the Gold Coast, after a record-breaking run of apartment sales, with almost a whole year’s worth of sales happening in first three months of 2021.
After an additional 450 apartment sales in the June quarter, and 1,192 sold in the year to date, there are only 624 apartments available on the strip. Supply has not been this low since 2014, when there were 634 available, according to the Urbis Gold Coast Apartment Essentials report.
If the current appetite for apartments continues, then there are only just over four months of supply left, if no new projects are released.
“Supply reached a critical low across the Gold Coast at the end of June following another quarter of robust sales activity,” said Urbis Senior Consultant Lynda Campbell.
The Urbis report found 14 apartment projects were sold out during the second quarter, with three of those new launches.
“The number of apartment projects selling out within months of launching highlights the extent of elevated buyer demand,” said Ms Campbell.
The situation had led to an imbalance of supply across the Gold Coast’s four key apartment precincts identified by Urbis. The North Shore precinct, from Runaway Bay to Hope Island, has 13.1 months’ supply and the Southern Beaches, from Mermaid Beach to Coolangatta, holds just 2.1 months’ supply.
“Some precincts are now in major under supply, although we are aware of a number of larger projects currently in train that may be ready to fill this gap,” said Ms Campbell.
The Urbis report estimates a further 1,000 apartments may be launched to the market over the next three to six months.
“However, if demand continues at the current pace, this supply will not be enough,” said Ms Campbell.
Strong demand for apartments in the Southern Beaches precinct has made it the most expensive for new apartments on the Gold Coast. The weighted average sale price in this market has surged by $141,906 to $1.366 million compared to the first quarter of this year.
The average price was lower in the Gold Coast Central precinct, from Labrador to Broadbeach, where it dropped by $211,201 to $1.018 million.
The market was also characterised by a high proportion of owner-occupiers and a lack of rental supply – backed by 0.6% vacancy rates, according to the REIQ.
Owner-occupiers represented 56% of buyers, Queensland investors 19%, interstate and investors 21%.
Due to border closures, only 4% of buyers from overseas – a stark contrast from two years ago when international buyers represented 25% of the market.
Who’s to say that once the current boom has ignited all the developers to load up more stock, the market will have cooled? It’s happened before. But for now, the boom is on.