The Gold Coast posted strong apartment sales in the third quarter, with most parts of Australia still seeing steady sales from this segment, according to planning and strategy company Urbis.
In its latest Apartment Essentials report, Urbis stated that so far, the city consistently generated impressive sales this year. In fact, it recorded 298 surveyed sales this quarter, more than twice last year’s figure of 139.
The study also found that sales to owner-occupiers have been the highlight of this smaller market, which only has 6,806 apartments in the pipeline.
On the other hand, the new apartment market across the nation remained static amid the tightening of credit and conditions of purchase.
Relative to a quarterly average of 1,260 observed over 2017, surveyed sales activity was steady at 1,330 during the third quarter. Further, the volume of apartments approved fell from the recent peak of 25,000 logged in the second quarter of 2017 to 4,000 this quarter — marking the lowest level in three years.
The weighted average price for the quarter, meanwhile, was pegged at $687,000, with 15 of the 20 fastest-selling projects reaching a price point at or below $700,000. The weighted average price has lingered between the high $600,000s and the mid $700,000s for the last 12 months. At the other end of the market, 9% of projects had an average price of $1 million-plus in the quarter, with three-bedroom apartments accounting for 14% of sales.
Urbis National Director Clinton Ostwald emphasised that the current condition is different from previous flat lines, where rebound can be expected sooner. Due to the weight of negative sentiment in the broader residential market, sales may take time to rise again.
“The national apartment market will continue to see lower sales volumes with a less consistent flow of new apartment marketing launches, buyers sitting on their hands and banks slowing the credit flow to developers, resulting in fewer construction commencements,” he said.
The purchaser market experienced slowdown 18 months ago due to tightened controls on purchasers and lenders. This resulted in a controlled purchaser demand, but with more activity recorded in the more affordable end of the market. Owner-occupiers were also observed to cover a large share of the market.
Remarkably, there were a number of premium sites that continued to defy the rest of the market. The interest in amalgamated large apartments in the best locations continues to attract high prices.
It was also worth noting that affordability is still a challenge for the industry as construction costs continue to rise and supply starts to trend lower on the back of competition from other land uses in the short term.
Overall, the weighted average sale price was at $687,057. More specifically, these were the values logged in different cities: Sydney at $833,152, Melbourne at $600,558, Brisbane at $736,065, Perth at $635,805, and the Gold Coast at $727,685.
