June Qld Resi Suburb View Surfers Paradise


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June Qld Resi Suburb View Surfers Paradise

  1. 1. SUBURBVIEW June 2008, South East Queensland SURFERS PARADISE Residential Suburb Overview Surfers Paradise has been at the heart of major development of the Gold Coast throughout the past 30 years and while development has spread north and south, it remains the hub of activity. With inauspicious beginnings as a place called Elston, Surfers Paradise has continued to flourish since the introduction of the Surfers Paradise Hotel by Jim Cavill in 1925. Occupying a relatively narrow stretch of land across the Nerang River from Southport, Surfers Paradise is home to some of the most famous beaches in Australia. Riverside subdivisions in 1949 brought a number of restaurants, boutiques, specialist gift shops, and a cosmopolitan population to the area. By 1960, central Surfers Paradise could boast its first high-rise apartment block, 'Kinkabool', and within seven years, the now-familiar skyline of apartment buildings was visible from a distance. Surfers Paradise population of 18,501 (2006 Census) consist of over one third of its residents Generation X and Y’s (37%) being drawn to the suburb for the layback lifestyle while located close to employment hubs. The population grows enormously during peak tourist seasons allowing the Gold Coast tourism market to provide a dynamic employment base for current and potential residents. Following the trend toward inner city living, the area has enjoyed a resurgence of interest and demand for centrally located properties. Attracting more than four million visitors each year, this world famous suburb is home to the world's tallest residential tower Q1, an 80 level landmark reaching 322 metres in the sky. With development sites rare and given the continuing demand for inner city living, increased interstate migration and the continual upgrading of the Surfers Paradise retail precinct, the future of residential investment in the area looks bright. Source - REIA
  2. 2. June 2008, South East Queensland Suburb Dwelling Type Not surprisingly, apartments and units dominate Surfers Paradise housing. Of the 12,472 occupied Dwelling Type private dwellings, over 82% are units and apartments. The largest concentration of high-rise apartments stretching along the world famous Surfers Paradise beach ranging from older three storey walk up Seperate House developments primarily built in the 1960/1970s to 80 10.8% storey new residential towers. Edging over the 82.9% Broadwater housing becomes more traditional in 6.3% Unit/Apartment Townhouse Surfers Paradise, with large canal homes and townhouse estates. As the population, increases in Surfers Paradise and residential beach front development sites become far and few between, existing established complexes are likely to be Source : Australian Bureau of Statistics (Census 2006)/CBRE Research & Consulting replaced with larger apartment towers. Who lives in Surfers Paradise? Tenure Type Most visitors to Surfers Paradise come for the relaxed beach atmosphere, shopping and nightlife and may be Being Purchased largely unaware of the 18,500 residents that call the Fully Owned area home. In the 2006 Census almost 50% of 11.4% residents in Surfers Paradise had never been married 19.1% with over 37% living in rented accommodation. A third Rented 37.2% of residents reported to be paying a mortgage or owning their homes outright, this is likely to increase as 32.4% empty nester baby boomers seeking out the leisure time and options offered by living close to the beach Other move into Surfers Paradise. Source : Australian Bureau of Statistics (Census 2006)/CBRE Research & Consulting Surfers Paradise House Market With a population of almost 600,000 and growing at around 3.2% per annum, the Gold Coast is seeing changing demographics. Interstate migration is slowing and the area is beset by an aging (although affluent) population. The Gold Coast house market was out-performed by Brisbane’s over the year, with falling sales volumes accompanied by drops in capital growth rates. The median house price in Surfers Paradise was $610,000, increasing only by 2.7% in the June 2008 quarter. The median house price in Southport was $505,000, with a decrease of -0.39% recorded for the same period. Units on the Gold Coast achieved price growth of 6.93% over the year to June 2008, with 2.26% of this occurring in the June quarter. This growth resulted in a median unit price of $371,500 for the quarter. The number of house and unit sales have reduced as buyers have adopted a “wait and see” approach with ample stock on the market. Resi-SuburbView 2
  3. 3. June 2008, South East Queensland Surfers Paradise Unit Market Resulting from an increasing population and lack of investors on the Gold Coast, house and unit rents continue to climb. The median rent for a three bedroom home on the Gold Coast ranged from $420 to $495 per week, recording increases of between $20 to $45 per week in the June 2008 quarter. Aided by healthy rental increases, rental yields on the Gold Coast are on the rise sitting at over 4.25%. Unit rents increased a further $20 per week during the June quarter, resulting in a median rent for a two bedroom unit of $370 per week ($30 a week more than Brisbane units). Following continued rental increases, local Gold Coast agents are reporting higher than normal increases in arrears as rental affordability deteriorates. Surfers Paradise Top Five House Sales June Quarter 2008 Admiralty Drive, Surfers Paradise - $4,820,000 Amalfi Drive, Surfers Paradise - $2,775,000 Admiralty Drive, Surfers Paradise - $2,700,000 Stanhill Drive, Surfers Paradise - $2,700,000 The Promenade, Surfers Paradise - $2,560,000 Surfers Paradise Top Five Unit Sales June Quarter 2008 Surfers Paradise Boulevard, Surfers Paradise - $2,000,000 Stanhill Drive, Surfers Paradise - $1,450,000 Old Burleigh Road, Surfers Paradise - $1,450,000 First Avenue, Surfers Paradise - $1,385,000 Garfield Terrace, Surfers Paradise - $1,290,000 Residential Development Supply Pipeline Within the suburb of Surfers Paradise, there are Surfers Paradise Residential Supply 1,705 proposed new residential units/apartments in Pipeline the supply pipeline. Across the 16 proposed developments, the majority are high rise projects Development Application 367 with an element of mixed use (commercial or retail). From June 2007 to June 2008, nine projects have Development Approval 846 development applications lodged, four have development approval, two have tenders called or Tendes Called/Contracts Issued 201 contracts issued, and one project is under construction. Those projects that have not yet Construction 291 commenced construction have scheduled completion throughout 2008 to 2014. Due to the 0 200 400 600 800 1,000 increasing cost of construction and tighter lending Number of Units/Apartments Source: Reed Construction Data (June 2008) criteria, it is likely some of these proposed projects will not be constructed with some deferred or abandoned for various reasons. Resi-SuburbView 3
  4. 4. June 2008, South East Queensland Approved Residential Projects in Surfers Paradise (>100+ units) Project Address No. of Stage Developer Estimated Project Units Value Soul 4-14 The Esplanade 291 Site Preparation in Juniper $400,000,000 Progress Surfers Paradise 3197 Surfers 192 Development Raptis $50,000,000 Units Paradise Blvd Approval Pacific Beach 36-44 Old Burleigh 308 Development - $200,000,000 Apartments Rd Approval River Terrace Unit 2-20 River Tce & 42- 201 Tenders Called - $80,000,000 Tower 46 Enderley Ave Iluka Mixed Use 3 Tricket St 351 Development Raptis $90,000,000 Development Approval Total Units 1,343 Source – Cordell’s (June 2007 to June 2008) What is happening at the Coal Face? The Gold Coast residential market has slowed immensely in 2008 with overall values holding, given the imbalance between supply and demand. Fewer buyers in the market and ample stock available are resulting in longer selling periods. CBRE Residential Valuer’s are seeing an increase in mortgagee in possession jobs within new residential developments and some prestige localities, such as Hope Island and Sanctuary Cove. Today’s Gold Coast buyers are qualified (finance approved), educated regarding the current market and looking for a bargain with no sense of urgency. Due to their affordable nature, properties priced under $450,000 are stable. However, prices at the southern end of the Gold Coast have seen a 10% reduction in townhouse and unit markets. The middle of the market, with properties priced $500,000 to $900,000, has slowed with a significant amount of product available. Due to a reduced buyer pool and with vendors holding fast to asset values of 2007, properties are sitting longer on the market. Waterfront properties priced over $1 million offering views or located on the beachside of the Gold Coast Highway remain active. Those in secondary locations and with no point of difference are struggling to maintain value with little market interest. Resi-SuburbView Toni McKnight Senior Manager - Residential Research CBRE Research & Consulting, Pacific Region 4 T 61 7 3833 9773 M 0432 571 724