Property back to ‘normal’
THE Gold Coast property market will transition from “nuts to normal” in 2023 as it comes down from the highs of the Covid pandemic, a leading real estate firm has tipped.
Colliers International has analysed the city’s property market and how rising interest rates and record-low vacancy figures would impact on the slowing sector.
The report, revealed at a residential developer’s function at the Broadbeach’s Niecon Tower, shows the market would prove more favourable in 2023.
Colliers residential director David Higgins said in a speech on Wednesday that the Gold Coast market was retreating from the highs of the Covid era.
“I think we are in transition and moving from ‘nuts back to normal’ and we are back to operating in a normal marketplace again,” he said.
“There will be a new benchmark for increased pricing for new apartments in projects generally.
“If they are to meet funding hurdles for the lenders, and only those projects in prime locations that be able to bear the increase in gross realisation and purchase prices increases will get into construction.”
The Gold Coast from late 2020 to early 2022 experienced the hottest property market since the 1980s, with record house and unit sales and heavy development activity.
However, a dramatic uptick in interest rates by the Reserve Bank of Australia, supply chain shortages resulting from the pandemic and spiking material costs linked to the war in Ukraine.
The November cash rate was set at 2.85 per cent while inflation is expected to peak at 8 per cent in December.
Mr Higgins said Colliers research tipped the market would turn around in 2023.
“I remain confident that there is hope on the horizon with the Gold Coast property market well placed to weather the transition happening across the market, due to very low levels of supply,” he said.
“Cost pressures are expected to ease over the next 12 months as supply chain issues start to stabilise and work and delivery times reduce.
“It will take some time we believe, before we see a correction in the construction market, but it means we’re seeing the peak of these cost crunches.
“Only those projects that can achieve the uplift in stronger revenues to keep pace with the increasing construction costs will proceed and we believe that buyer activity will be consistent for the right projects who continue to meet the demands of a much more informed purchaser demographic.”