Credit: The AustralianTHERE is little doubt some parts of Queensland's Gold Coast market are not travelling well, but Surfers Paradise ocean-front apartments seem to have fared better than other property sectors in the area, if a recent analysis is correct.
Industry commentator Michael Matusik looked at the resale apartment market finding that values fell by 9 per cent across the Gold Coast during 2008 and a further 4 per cent last year. But he says individual apartment resales of ocean-front properties in Surfers Paradise continued to sell well, lifting 8.9 per cent in value on average last year.
Last year, just 17 apartments were resold (and settled) in a sample set by Matusik of 17 buildings. Only one resold for a loss, with a price drop of $25,000.
Matusik says ocean-front apartment prices have grown by close to 10 per cent a year through the longer term and only one in 10 sells for a loss.
"When a loss does occur, it is usually a small one," he says.
"Ocean-front apartments, in Surfers Paradise at least, are tightly held with under 3 per cent of the total stock in our sample set turning over each year.
"In some buildings, the turnover is much less."
Matusik looked at 350 resales across 17 ocean-front apartment buildings in Surfers Paradise. He excluded sales between family members because of hardship such as divorce.
The analysis found an average capital gain of 9.9 per cent per year and an average actual gain of just under $225,000 between sales, equating to an annual gain of more than $40,000.
Owners, too, seem to hold on to the apartments longer than is widely thought.
Most owners held their ocean-front apartments for 71 months, or almost six years.
Just one in 10 resales, or 37 in total, showed a loss in the 20-year study period, and the average drop was 2.7 per cent a year or $35,000 in total. Collectively, apartment resales in the sample set have yet to show a loss on an annual basis, but lesser apartments on the Gold Coast often do, Matusik says.
Other parts of the Gold Coast residential market, such as houses and apartments not on the beach, are more dependent on confidence, good times and occasional or holiday use than in many other parts of Australia and this causes a greater boom-bust cycle than would be the case normally.
While the size of the cyclical wave is getting smaller as the Gold Coast's resident population grows, it remains nevertheless, and the area is one of the few markets that bore the brunt of the global financial crisis.
Matusik says there is more pain in the pipeline, too, with a high default rate expected across high-rise settlements in coming months. Developers and local consultants haven't escaped the slowdown. "We have only two consultancy jobs on the Gold Coast at present compared with the four or five jobs we usually have on the go. It has been this way for more than 18 months now," Matusik says.
The Gold Coast's troubled market has been well documented in state government and real estate industry figures and in the media.
The Queensland Department of Environment and Resource Management's Property Market Movement for 2010 Valuationshows Gold Coast values have fallen 10 per cent since the last time valuations were undertaken in 2007.
Matusik says it shows the greatest falls were for ocean-front land, down 30 per cent on average since 2007.
Residential land values, overall, were down 5 per cent across the Gold Coast and multi-unit values were down 17 per cent in the past three years.
The report notes the Gold Coast apartment market has been treated harshly as investor demand wanes with the flagging tourist market, and an oversupply has also had an adverse influence.
Recent Real Estate Institute of Queensland figures suggest house prices have dropped 2 per cent in the past 12 months, with half of the localities surveyed showing a fall in median price last year. It also shows median house prices dropped by 30 per cent in Surfers Paradise and Mermaid Beach during the past 12 months.
Credit and contact: majellacorrigan@optusnet.com.au
0 comments:
Post a Comment