This week’s news post will continue our ‘Area Spotlight’ theme, focussing on the Gold Coast.
To ensure the Leith Group Investment Committee stay up to date with local trends in our target areas, our Analysis department completes comprehensive (and regular) research on underlying economic performance. For this article, we will be reviewing our research on the sales of new-build units.
Sales Data
Gold Coast new-build sales values have been analysed for 1-3-bedroom units since January 2018. The graph below includes the average for all bedroom types in Surfers Paradise and a linear average for the same. Data for the graph has been grouped into trailing 3-months to show a quarterly average.
Key insights derived from the research:
- 3-bedroom units have been the most consistent growth type for the Gold Coast, achieving an average growth rate of 5.25%/month or +122.44% over the period.
- Surfers Paradise has seen a significant increase in average price over the period, ranging from c. $800,000 in 2018 to c.$1,000,000 in 2022 (roughly a 25% increase on the trendline values).
- Surfers Paradise growth has been turbulent over this period, which is most likely due to the staged release of new stock at varying price points (ultra-high end, to market value units).
- 1-2-bedroom units for the Gold Coast have remained relatively consistent throughout the period.
Rents vs Sales – Unit Preferences
Several weeks ago, we released an article on the trends for Gold Coast rents, specifically looking into both Surfers Paradise and Broadbeach, which presented an opportunity to undertake a comparison between the two datasets.
From our review, we can derive a correlation between the types of units being generally preferred within both of the Gold Coast suburbs. Although inversed for Surfers and Broadbeach, we can see that 2-bedrooms are the preferred unit type for both purchasers and renters. In both the rental and purchaser scenarios, 2-bedroom units account for 50-55% of the total take-up of stock.
Similarly, Surfers Paradise 1-bedroom units are the other consistent trend from the datasets. These units are highly popular for both cases and account for roughly 20-28% of total take-up across all areas.
Comparison between the two datasets show that there is a direct trend between both preference of buyers and renters for 2-bedroom units in both suburbs.
2-Bedroom Unit Growth – Gold Coast
Focussing on the 2-bedroom new build unit market, we can see that growth in this space isn’t uniform across the suburbs. The graph below shows the change in average sales values for each area from their first sales date, to their most recent (not every area has sales each month).
We can see from the data that both Surfers Paradise and Broadbeach are among the top 5 performers for the Gold Coast, in terms of average sales value growth for the period. Of the 16 suburbs within this dataset, we note that only two (Benowa and Southport) have experienced negative growth over this time, with a minimum positive change of 5% and a maximum of 111% seen for the remaining areas.
Currently the average value of a two-bedroom unit, for suburbs within this dataset, is approximately $800,000.
Conclusion
Since 2018 there has been a general positive trending for the values of new build units on the Gold Coast. Typically, the price of units and number of transactions has grown, and particularly over recent years has seen a dramatic rise.
Leith Group has witnessed an increase in market sentiment and transactional activity from Surfers Paradise to Broadbeach and remains positive about the future potential for this area.
