Gold Coast apartment prices reach record high amid supply shortages

Market Insights
3 months ago
2 minutes

The average price of a new Gold Coast apartment has just hit a record high breaking the $1.6 million barrier for the first time, according to the latest research by Colliers. This significant increase, driven predominantly by owner-occupiers flooding the market, comes amid a dramatic supply shortage.

The latest Colliers' Gold Coast Residential Market Report revealed that although the number of new apartment sales in the final quarter of 2023 was the second-lowest of any quarter in the past three years, the average price has escalated by a striking 14.5 per cent from the previous record of $1.44 million in September 2022 and a 45 per cent increase from the $1.134 million average at the end of September 2023. 

“The latest sales numbers reflect the ongoing challenges of meeting demand for new apartments on the Gold Coast,” said David Higgins, Gold Coast director of residential at Colliers. 

“We are really seeing residential projects struggling now out of the ground, due to the massive increase in construction costs, making many projects just not feasible in current cycle," he said. 

The report also highlighted an interesting trend: even though there was a meagre sale of just 236 new apartments in the December quarter, just over half of the 470 sales recorded in September, the sale volumes were lower, but average prices soared higher, fuelled by a constrained supply and limited stock variety. 

“Sales volumes are lower while average prices have spiked higher as supply and variety of stock remain constrained. It’s causing a massive fluctuation of pricing in the market," David said. 

This dramatic pricing is reflected in a resurgent interest from owner-occupiers who accounted for about 55 per cent of the total sales in the December quarter. The prime central suburbs of Broadbeach and Surfers Paradise championed the market in both sales and supply in 2023, contributing to around 70 per cent of total sales.

Colliers further projected that approximately 2,850 apartments are set to be completed on the Gold Coast in 2024. However, this is expected to do little to ease supply constraints.

“The bulk of these apartments have already been presold over the past few years, so this will not help deliver additional supply,” David said.

Aiding this surge in apartment cost, Colliers research has found that low vacancy rates across the Gold Coast have pushed median weekly apartment rental rates up by 10 per cent over the year to $750 per week. These increasing rental yields testify to the substantial expansion of the investment market across the Gold Coast's new apartment market. 

“The apartment market continues to be supported by local and interstate investors who are taking advantage of the strong yields,” David said.