Gold Coast $1mil unit market continues to thrive

Posted on 13/07/2008  

The Gold Coast's million-dollar apartment market is showing few signs of succumbing to the market jitters that have slowed sales and housing construction around the country.

The number of sales in this market has risen steeply since 1997, with sales volume keeping pace with the extraordinary amount of developing that took place in the 10 years to 2007. A survey by PRDnationwide analysed 1,491 settled sales at $1 million or more between January 1997 and December 2007.

PRDnationwide found that 23 high-rise apartment projects from Southport through to Coolangatta achieved apartment sales in this market. Surfers Paradise achieved the largest volume of sales, with 35% of total sales over the 11-year period in the study (525 sales). Of these, 130 were attributed to just one building - Sunland's Q1 project, which was completed at the end of 2005.

Broadbeach was the next most popular seaside suburb for the well-heeled, followed by Main Beach and Coolangatta.

Before we get carried away with the largesse of this market, let's first acknowledge that 81% of sales were contracted in the $1 million to $2 million price range. The larger sales (the ones often featured in the pages of the Gold Coast Bulletin and The Courier-Mail) are those in the $3 million to $6 million price range. These comprised just 6% of the market. As the median price for Gold Coast apartments tracks higher, we'd expect to see more $1 million+ sales.

All of the $1 million+ apartments in PRDnationwide's study were located in seaside suburbs along the coastal strip, close to the beach and/or the Broadwater or rivers.

The trend is expected to continue with the settlement of new buildings including Elysee, Kirra Surf, The Oracle and Reflection Tower Two starting to occur. All of these projects have struck pre-sales well over $1 million, so expect the figures in this report to track upwards.

Suburbs with the highest capital growth were Miami (averaging 17.4% a year), Burleigh Heads (15.7%) and Tweed Heads (15.5%).

For those who may be unfamiliar with the Gold Coast market, let's put a few things in perspective. This is a market where the million-dollar-plus apartment headlines sit alongside other stories which warn the market is over-supplied. The 23 apartment projects which achieved 1,491 sales over $1 million account for 2,797 apartments in total (and this is just a segment of the market).

It is worth noting that Q1's tally of 130 $1 million+ apartment sales is not surprising given the scale of Sunland's project. Q1 is one of the world's tallest residential buildings and its 80 levels include 526 apartments and a two-level public observation deck. Those with a yen for a special occasion can expect to shell out between $375 and $650 per night!

So while the headlines might portray the Gold Coast as a millionaire's paradise, in reality it is affluent middle Australia, with 1,491 of the apartments in this study selling for between $1 million and $1.9 million, 35% of them in Surfers Paradise.

PRDnationwide expects the future buyer profile to include more owner-occupiers with the trend towards boutique apartments with larger floor plans and prestige fixtures and fittings. The research makes no mention of broader economic and market trends which could impact negatively on the next release of new apartments. So whether higher interest rates and the ongoing equities downturn impact on the Gold Coast's golden era is yet to be revealed.


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