Quality sustains market

WHEN it comes to development on the Gold Coast it is all about quality, not quantity.

This combined with financial institutions tightening the money tap has inadvertently put the Gold Coast in a position where it looks set to avoid a major real estate bust.

While site deals are taking longer to transact, and megaparcels are not selling as they used to, that is evidence of the market returning to a healthy balance, property experts say.

Avanti Commercial’s Lachlan Harris sees the market as “very strong”, particularly at the southern end of the Coast and the northern corridor.

“The main problem remains access to funds,” he said.

Mr Harris said that has helped to prevent speculative buys and the market from overheating, potentially sending prices sky high.

“We are still good value compared to the southern capital cities in terms of built product,” he said.

“You can still get a two-bedroom unit on the southern Gold Coast for under $1 million.

“What has changed is that deals are probably taking longer to transact. Buyers are doing more due diligence to offset planning risk.

“This refers to things like preliminary meetings with the council before lodging plans or cementing deals.”

Veteran developer John Potter agreed.

He said the banks, and the developers they lend to, are careful not to create a situation where there is an oversupply of products, particularly apartments, on the market.

That had led to less speculation when it came to buying and selling development sites.

He said the Southport CBD was evidence of this trend.

“Also, the Chinese purchasers have faded away, and that was who the speculators were chasing, by buying a site, getting a DA, and then re-releasing that site to the market,” he said. There are less buyers per site now.”

However, Mr Potter said the market was still healthy, with several Burleigh projects selling out before construction has started recently.

“The development sites left now in Broadbeach down to Burleigh Heads are some very good sites,” he said.

“When the market changes and there is more activity then these sites will be the most sought after.”

Urbis’s Matt Schneider said the market focus had shifted from mega-development to smaller sites with more viable development plans.

“While we have observed fewer transactions of major apartment sites in recent months, we continue to see strong sales in greenfield, premium apartments, townhouse and boutique development sites,” he said.

“The ongoing interest and real market strength is in quality sites and well-positioned projects.”