Property News

Buyers still lining up for Sunshine state apartments

04 October 2006

To an outside observer there seems an endless array of apartments on the Sunshine and Gold coasts, each better than the last and with a dazzling array of mod cons, views and facilities.

A recent report shows there are still buyers for these apartments, despite the softer Queensland market, and the buyers are mostly owner-occupiers.

Apartments in the mid and upper price ranges on both the Sunshine Coast and Gold Coast are ticking over, according to PRDnationwide's latest report. Its Sunshine Coast report says the volume of sales there outstripped sales in the Brisbane CBD for the June quarter. Ninety-four new apartments were sold in the three-month period compared with 80 in Brisbane's CBD.

Units priced from $500,000 to $600,000 had the highest sales volume, up 17 per cent between the March and June quarters. Those priced from $400,000 to $500,000 also performed well, making up 45 per cent of all sales.

PRD says top-quality units are also on the move again on the Sunshine Coast, with increased sales in the $1.25 million and over price range.

Previously, the pricier apartments were considered a tough sell, but in the most recent quarter they represented 12 per cent of total sales. Two-bedroom units still seem the most popular, making up 56 per cent of sales, with three-bedroom apartments making up 33 per cent. However, PRD makes the point that while the market is tracking well, the perceived value of apartments in the resale market has indirectly contributed to a softer sales performance in the new-unit market.

"Unit resales around the Sunshine Coast are offering an affordable point of market entry for many buyers," it says.

"Based on historical data, this market is well-positioned to experience substantial capital growth in the future."

The report says this resale trend will be only short-term, as current demand continues to drive capital growth, reducing the price gap between new and established units.

However, there were 705 new units for sale on the Sunshine Coast at the end of the quarter, about 22 months' worth of demand, PRD says.

Owner-occupiers are the main buyers on the Sunshine Coast, mainly made up of people looking to downsize but stay in an area close to amenities.

The report says investors were virtually non-existent during the June quarter, probably due to speculation that cash rates may increase again this year.

On the Gold/Tweed coast, PRD says 441 units exchanged across 71 projects. Just over half these sales came from three buildings: Southport Central Tower II; The Oracle Tower I at Broadbeach; and Kirra Surf at Kirra.

PRD says sales worth $1 million and over (of which there were 106) represented about 24 per cent of the turnover. Fourteen were for more than $2 million and PRD says the top end of this market seems virtually impervious to the recent broader slowdown.

The southern end of Surfers Paradise has several luxury apartment buildings completed or under construction, including Allure, Q1 (which has 80 levels), Artique, Platinum on the Beach and Jade. It's tipped to become a premier residential address as more people, wanting to still be close to the beach, opt for luxury apartment living.

Again, on the Gold Coast, there is a fair bit of supply. At the end of June there were 2146 new apartments available, about 14.6 months' worth on present demand levels. So we will be seeing a lot more of those flash apartments from the Sunshine state.