Gold Coast Property

A REPORT on the sub $600,000 beachside new apartment market has found that it could be near extinction on the Gold Coast.

Aubrey Development and Marketing Consultants’ Market Findings for August 2010 reveals just six apartments remain for sale in this price range in the beachside suburbs between Tweed Heads and Main Beach.

Author David Aubrey said reports of an apartment oversupply were misleading because they referred to units priced over $700,000.

“This has been seized upon and portrayed as the entire Gold Coast new apartment market being in oversupply,” he said.

“There is next to no new product available in the beachside suburbs priced below $600,000 and no major projects planned to be released in 2010/11 except for stage two at Pavilions Palm Beach, following a near sellout of its first stage.

“This lack of supply shows no sign of abating in the medium term due to restrictive lending policies by banks and cautious approaches of the valuation industry and a general lender/valuer caucus of negativity.

“The end of the sub $600,000 new investment unit is nigh.”

The 2008 Market Findings report predicted a supply issue when 70 units were for sale in the sub $500,000 bracket across 32 projects. The latest report is based on 22 projects with 2114 units.

The five remaining sub $600,000 apartments are within the first stage of Pavilions (info@pavilionspalmbeach.com) and one last new 2-bed, 2-bath Eden apartment in Rainbow Bay priced at $595,000 (edenciel@bigpond.com)

Mr Aubrey said investors wanted new apartments due to their depreciation benefits and lower body corporate costs.

The Gold Coast property market could be facing a ‘budget’ unit shortage next year as stock priced below $500,000 is expected to dry up.

Research by Colliers International, in a more robust view of the apartment market than this week’s Midwood Report, has warned that low-priced stock was set for a major supply shortfall next year.

A June quarter apartment report being complied by Colliers is expected to show that the Coast has just 18 months’ supply of new apartments.

This is at odds with the Midwood Report which this week said the city had five years’ supply based on current sales rates.

The most recent Colliers report for the March quarter revealed stocks of new Gold Coast apartments had broadly dropped 30 per cent since June last year, or about 10 per cent per quarter.

This had followed about 150 sales each quarter, well below the Gold Coast average of between 300 and 400 sales a quarter.

The current below-par sales figures followed the ‘worst quarter on record’, December 2008, which produced just 74 sales across seven projects.

“If you had used those (2008) figures, we would have had 11 years’ supply of stock left,” said Colliers’ project marketing director Mark Worth. “But this isn’t the case.”

The Coast is estimated to have 1700 new apartments to sell, and only about 500 of those are priced under $500,000 which is posting the strongest activity.

Southport Central accounts for more than 200 apartments, but these are priced between $600,000 and $800,000 and there appears to be no urgency by Raptis receivers to discount these properties.

Mr Worth said that once the cheaper stock was sold there would be a natural slowdown in overall sales, but he said a handful of developers could be poised to cash in on an expected ‘big hole’ in the budget market next year.

One of the big unknowns is Phil Usher’s H2O twin-tower high rise fronting Marine Parade in Southport. The development has 357 apartments with their release date and price points yet to be disclosed.

Mr Worth said projects such as H2O and Harry Triguboff’s latest tower at Brighton on Broadwater near the Sundale Bridge were poised to capitalise on the stock ‘gap’ he was expecting in 12 to 18 months.

“They are the guys that are going to make money,” he said.

“The same thing happened at the end of the ’90s.”

Mr Worth said developer Mark Howard delivered the Pinnacle high rise at Surfers Paradise in 2002, and sold it out within three months.

House prices around the future Gold Coast light rail track are set to soar, with predictions some property values could jump $100,000 in the next 12 months.

Industry sources say developers have started to circle properties along the route and homeowners are looking to sell when the price is right.

There is evidence of housing price booms in the United States when light rail systems have been built.

According to a recent Tourism and Transport Forum paper, house prices within 800m of the new light rail system in St Louis, Missouri, enjoyed a 32 per cent premium and the cost of track-side apartments in Santa Clara, California, soared 45 per cent.

Rapid Transit System business advisory member Peter Trathen said he could see some house prices on Queen Street and Olsen Avenue jumping as much as $100,000 in the next 12 months as developers started to move in.

Mr Trathen said clever developers were already planning ahead and getting ready to buy up land along the track route.

“If you amalgamate land and put it to a development the value will be huge,” he said.

“There are massive opportunities in terms of development.”

Mr Trathen said developers were all waiting on the market to improve and when it did there would be a big rush.

Urban Development Institute of Australia senior vice-president Steve Harrison said major Queensland property developers were already scouting for opportunities around Broadbeach.

Smart players in the industry were making plans and investing.

“There’s been a lot of movement around Broadbeach,” he said.

There would be a premium on house prices along the light rail route as developers snapped up properties early for long-term plans.

Mr Harrison said once one developer put money behind a project along the route others would ‘pull their finger out’.

Real Estate Industry Queensland Gold Coast chairman John Newlands said house prices would start to rise around the light rail track but not dramatically.

“I don’t think you’ll see house prices jump from $300,000 to $400,000 overnight,” he said.

“I think you’ll see a gradual 10 per cent growth in prices.”

Queen Street resident Steven Gray said he thought prices would go the other way so was pleased to hear of a potential price rise.

“I’ve been here for a long time,” he said. “It’s a noisy street, so if the money was right I’d sell … “

Upper Coomera has topped the list of Gold Coast suburbs with the most house sales, at 455 in the past year — ahead of nearby Pacific Pines by a hefty 139 homes.

LJ Hooker Coomera real estate agent Dylan Oakley said being nestled between the Gold Coast and Brisbane made the area attractive to people who wanted easy access to both.

“A lot of our clients work in Brisbane and they want to be able to get to the beach on the Gold Coast and other attractions,” he said.

The only other suburb with more than 300 homes sold in the year to February was Pacific Pines according to information supplied by RP Data.

Helensvale, Robina and Ormeau recorded almost 300 house sales each in the same period.

Mr Oakley said the affordability of Upper Coomera was what drove sales in the suburb, where the median price rose by 2.4 per cent in the year to February despite a subdued market.

REIQ Gold Coast chairman John Newlands agreed, saying the same logic applied to all the suburbs that made the top five sales list.

The median house price in Upper Coomera was $420,000, while in Pacific Pines it was $455,000 and in Helensvale the median price was $499,000.

Ormeau was also one of the cheaper suburbs to buy a house at $448,000.

But in Robina the median house price jumped to $532,500, reflecting a rise of 1.2 per cent.

Mr Oakley said there were still opportunities to buy homes in Upper Coomera for under $400,000.

He said the reduction in the first home owner grant had seen a medium-term drop in buyer interest in those houses at the bottom end.

The figures from RP Data showed there were few houses on the market on the Gold Coast below $400,000, with only 10 per cent of the sales in the first quarter of 2010 in that section of the market.

By comparison, in the first quarter of 2009, 21.8 per cent of house sales were for homes below $400,000.

The majority of units on the Gold Coast sold for under $400,000 — 55 per cent in the March quarter, down on 64.1 per cent in the same period last year.

You can see the Surfers Paradise high rises from Barranbali Street and Neptune Court but data shows the locations are worlds apart.

Barranbali Street on Chevron Island claimed the title for the Gold Coast’s cheapest street at a median price of just $219,723 for a unit, while buying a house or unit in Neptune Court, Paradise Waters, costs an average of $3,328,959, according to information from RP Data.

The news was a shock to Barranbali Street residents including Rosie Taylor who said she had ‘travelled the world and lived in lots of places’ before deciding to settle in the central location.

“It is the village atmosphere here that I like the most,” she said.

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Gorge Zivanovic has made the most of his Neptune Court address, knocking down an old house to build a multimillion-dollar home three years ago.

“Paradise Waters is one of the best spots on the Gold Coast,” said the developer.

“It is quiet, central and there are nice people who live here.”

Surfers Paradise’s streets occupied five out of the 10 slots in the most expensive street list but Surf Parade was the only Surfers street in the list of cheapest.

The Gold Coast hinterland’s iconic Binna Burra eco-resort is set for its most important development in decades, with investors being offered a one-off chance to buy freehold residential property in a Queensland national park.

In a joint, $12 million project with Brisbane-based developer Casleyville, Binna Burra Lodge (BBL) will build four Sky Lodges next to the Lamington National Park eco-resort, housing 18 one-to-three bedroom luxury apartments, several of which already have been contracted off the plan to shareholders of the privately listed company.

The furnished, self-contained apartments, now selling for between $310,000 and $1.08 million, represent a new level of accommodation at the eco-resort, which has been an icon in nature-based regional tourism for more than 75 years.

Incorporating environmentally sensitive, solar-passive and energy efficient design, the lodge apartments will feature interior timber finishes and floors, stone walls, fireplaces, spas with private nature views and other mountain lodge-style luxuries.

Designed to reflect the history and exterior charm of the original lodge, built in 1933, they will have unrivalled views of the Numinbah and Coomera valleys and mountain escarpments.

The site is the only available pocket of freehold land in the 20,600ha national park.

Project manager and Casleyville director Tim Medhurst said the Sky Lodge development represented the ultimate green change investment opportunity, building on the Binna Burra Mountain Lodge’s perennial appeal as an eco-destination, a steady growth in regional inbound tourist numbers and average occupancy rates at the existing resort of more than 60 per cent.

The lodges will be sold as independent freehold title (under a community titles scheme), but will be managed, maintained and operated under a lease agreement with BBL, with owners receiving an equal, proportional return under a pooled investment arrangement. The properties will be available for use, rent-free, to owners for 28 days a year.

They are on the market with an average price, per sq metre, of $7250.

“Buyers can own part of Binna Burra and have piece of mind that when they are not there, the investment is managed and maintained as part of the Binna Burra Lodge accommodation range,” said Mr Medhurst.

“This is the first and only time that people will have an opportunity to buy freehold property within Binna Burra Lodge and the national park. There won’t be any more. The

southeast Queensland regional plan has made it almost impossible to happen in future.

“The look and the feel of the buildings matches the look and feel of Binna Burra Lodge, with the concrete and block construction faced with stone and hardwood. Inside, the lodges are very modern.

“Part of the attraction of these apartments is that we are adding a new level of accommodation to an existing facility. Binna Burra Lodge is an icon of tourism in southeast Queensland, but this is a new and improved level of accommodation which the market has been crying out for.”

He said the lodges would sell quickly and would be in demand from conference groups, families and nature-focused travellers.

Stockland has released the final tranche of apartments and penthouses in its Allisee waterfront development at Hollywell.

The apartments are within the Broadwater-fronting, six-level Sahana building, which was completed last year.

Stockland previously sold more than 50 per cent of Sahana’s 42 apartments off the plan in 2008 and held back the remainder for this final release.

All have three bedrooms, a separate study and views from South Stradbroke Island to the Surfers Paradise skyline.

Sahana’s first residents Helen and Mike Austin said they fell in love with the water views from their apartment and having the beach at the doorstep.

“There’s no road between us and the beach and the view can never be built out,” said Mrs Austin.

“The lifestyle we have here is just fantastic — my husband is a member of the Paradise Point Sailing club and we also both love fishing.”

After downsizing from the family home, Mrs Austin said she was impressed by the size of their new apartment.

“It’s got lovely high ceilings which give it a real feeling of spaciousness,” she said.

“Another thing I liked about Sahana was the well planned and generous storage in the apartments.

“There are so many cupboards, and an additional storage area in the basement.”

Sahana apartments range in size from 197sq m to 434sq m and are priced from about $1.5 million.

Facilities include three pools, a gymnasium and a tennis court.

The penthouse and apartments are open for inspection each day.

The sales suite is on Columbus Drive, Hollywell.

Varsity Lakes has been pinpointed as one of the bright property spots on the Gold Coast.

National property researcher Terry Ryder of hotspotting.com.au says the future price growth prospects for Varsity Lakes have been significantly boosted by the completion of the rail link.

He said the suburb now had improved transport connections to Brisbane via rail, and south into NSW via the Tugun bypass.

“There are exceptions to every rule in real estate and Varsity Lakes illustrates this point,” said Mr Ryder.

“…Varsity Lakes does present above-average prospects for specific reasons.”

“It is an evolving, work-in-progress community that is part of the canal-lakes system and is well-situated for services and amenities, including education and shopping.

“But it is the new rail link that will have the biggest impact on future property price growth.”

A village is being built around the rail station, which will add to the community’s amenity.

Varsity Lakes is close to Robina Town Centre and five minutes from Burleigh’s beaches.

The suburb, which has median prices of $464,750 for houses and $388,000 for units, has an established commercial and dining precinct and neighbours the Bond University campus, which generates further demand for rental accommodation in the area.

In his latest quarterly report, Mr Ryder predicts Queensland is set for a strong year, both economically and in residential property.

“While some economists say the state will continue to struggle in 2010, I believe the collective impact of the infrastructure and resources development will generate jobs and activity faster than expected.”

Did we witness the steal of the decade today? Eat your heart out Robin Hood!

The latest auction of mortgagee in possession properties in Kirra sold quickly today thanks to a mysterious buyer.

The bearded gentlemen, dressed more like a posh English farmer straight off the paddock than a local, started off the voting at Versace by capturing the 40-unit Kirra on The Beach, 92 Musgrave St, for an absolute song at $8.6 million, cementing Ray White Surfers Paradise as the auction house where to purchase properties at dirt-cheap bargain prices.

The bearded gentleman had only just begun though. He bought the adjoining 5 townhouses to Kirra On The Beach at just over $2 million, which was a fair market price. But his next purchase of a house adjoining the townhouses was virtually given to him. So cheap it bordered on criminal. The beautiful house sitting on 504 SQM was really only bid for by the bearded gentleman, the other bidders knowing they just weren’t in the same league, or shared his same hunger, so his last bid was a paltry $900,000. Upon checking with the backroom, they told him if he made that $1 million he could have it. He did. He got it. No one else bothered to counteroffer. This same property was purchased a few years back at more than double what he paid for it. A bidder next to me commented that surely this property would’ve fetched more money being sold by regular private treaty. I was too busy counting the cash in my wallet hoping I could put in a bid myself.

At this time of writing, the bearded gentleman’s still sitting here nodding at the auctioneer like one of those toy dogs with the spring-loaded necks you see in cars, Ray White salesmen crowding around him like flies on a horse’s backside wanting to shake his hand, wanting, hoping to get a piece of the action from the new King in Kirra.