Research commissioned by Colliers has shown the Gold Coast reached almost $800 million in new apartment sales in the first quarter of 2021.
The Gold Coast has seen a surge in demand from local buyers and interstate buyers relocating to the Queensland lifestyle hot spot.
The Colliers’ research revealed sales for the first three months of this year were just $112 million shy of combined new apartment sales across all four quarters of 2020.
The average price paid also shot past the $1 million mark for a second quarter, with the price tag of new apartments up more than 42 per cent in just two years.
Colliers’ Gold Coast Market Update was recently presented to the development industry and revealed 742 new apartments were sold between January and March.
With an average price of $1.061 million each, these sales totalled more than $787 million.
That compares with 987 apartments sold at an average price of $915,258 totalling $903 million for the entire year in 2020.
Colliers Gold Coast Director Residential David Higgins said it was one of the best quarters the region has ever seen.
“This data gives us a clear understanding of the extent of the demand driving the local development industry and the signs are there that this level of activity could continue at least for the immediate near term,” Mr Higgins said.
Colliers’ Gold Coast Market Update was compiled using research from property consultancy groups Urbis and Rider Levett Bucknall.
The research confirmed the southern Gold Coast as the city’s new apartment hotspot, with 320 new apartments sold in the March quarter, or 43 per cent of the total.
This was followed by the Central Gold Coast precinct, which includes Southport, Surfers Paradise, Main Beach and Broadbeach, with 285 sales, accounting for 38 per cent.
“Sales from the Southern Beaches precinct eclipsed the Central Gold Coast for the first time over two consecutive quarters which highlights the current drift of development activity to the southern coastal areas,” Mr Higgins explained.
The researchers surveyed 67 of 80 new apartment projects currently under way on the Gold Coast.
This revealed the Central Gold precinct (including Main Beach, Broadbeach and Surfers Paradise) taking future supply into consideration will gain the most sales momentum in the immediate future.
There were 1350 apartments for sale at the end of March, with most of them in the Central Gold Coast precinct and only 106 on the Southern Beaches.
The Southern Beaches spans from Mermaid Beach to Coolangatta, and includes the beachside suburbs of Burleigh Heads, Palm Beach, Kirra and Greenmount.
“Developers are struggling to keep supply up with demand in these boutique markets. We expect the volume of sales to drop off in the Southern Beaches due to this lack of new projects in the short to medium term,” Mr Higgins said.
“Central Gold Coast is undergoing a resurgence with quality apartments being brought to market to meet owner occupier demand.
“The demand is backed up by strong migration numbers, both interstate and intrastate, which sets the Gold Coast up for continued growth at least for the remainder of this year and into 2022.”
Development over the next 20 years is supported by Queensland Government forecasts that the Gold Coast will attract 14,700 people a year, with the city’s population reaching 940,000.
The Gold Coast is expected to need 6300 dwellings a year to accommodate this growth with the combined economic benefit to create more than 150,000 new jobs by 2041.
“Queensland is currently experiencing the highest rate of net interstate migration since 2007 and that is underpinning the market amid the pandemic,” Mr Higgins said.
“The difference between Queensland and the bigger states is that we don’t rely as much on international migration to support our construction industry, so it’s purely the big shift from interstate that is largely behind the activity we’re seeing at the moment.”
Mr Higgins said the data shows demand is falling short of supply, which has supported price growth in the sector.
“Overall, we’ve seen a smaller volume of construction work completed in the past five years at a time when demand has peaked. Along with the rising cost of materials and greater demand for lifestyle properties, this has led to a significant increase in prices for new apartments.”
The Colliers’ research shows that the average price for new apartments sold on the Gold Coast first breached the $1 million mark in the third quarter of last year, when it hit $1.143 million, before peaking again to $1.061 million in the first quarter of 2021.
The average price for new apartments has never been higher than $900,000 at any time in the past two years with a low of $715,032 in the fourth quarter of 2018.
In comparison with the average price in the first quarter of this year, apartment prices are up 42 per cent in a little over two years.
The current supply constraints have led to an increase in approvals and forecast project commencements in 2021, according to Colliers.
“However, the industry still faces a number of risks in meeting the unprecedented demand,” Mr Higgins said.
“Apart from increases in the cost of building materials and shortages in the major trades that we’ve already experienced, the industry also faces shortages in attracting the skilled resources to bring these projects to the market in a timely manner.”