Quartlerly property price growth figures came out on the weekend, with the focus predominantly on the successful performance of houses. However, it is worth taking a closer look at apartments.
Like houses, every Gold Coast suburb registered a rise in unit prices – not one slipped into negative territory.
This may not seem astounding given the buoyancy of today’s property market, yet if you go back 12 months to a time when we were still in lockdown, the narrative remains the same.
Even humble Bundall, which came in at the bottom of the list, managed to register capital growth of 2.3 per cent over the past year, according to CoreLogic’s figures.
To a would-be investor this may not sound like a good return, but at a time when the banks are struggling to dish out even half a per cent on people’s savings, I know where I would rather have my money.
And if you look to the top end of the results, to outperforming suburbs such as Palm Beach, where prices rose by 7.2 per cent over the quarter and a significant 29 per cent annually (it was the Coast’s top performer, ahead of Mermaid Beach, Tugun, Coolangatta and Mermaid Waters), things start to look far more rosy.
In Terry Ryder’s Hotspotting report: Exodus to an Affordable Lifestyle, the Gold Coast was relegated from its list of top ten locations, partly because the region is, and I quote, “a perpetual underachiever on capital growth, particularly in the high-rise unit sector, because of frequent bouts of oversupply. The median price for Surfers Paradise apartments is the same today as it was 10 years ago.”
I asked property analysts REA Group to pull some data on apartment price growth on the Gold Cost over the past decade, and the results seem to paint a somewhat different picture.
According to REA figures, apartments in Surfers Paradise have had capital growth of 13 per cent over ten years, rising from a median of $375,000 to $425,000.
Across all suburbs capital growth in the apartment market reached 29 per cent, rising from a median unit price of $364,000 in June 2011 to $470,000 today.
OK, the figures aren’t earth shattering and don’t come close to the 50 per cent capital growth claimed by houses over the same period, but as far as I can see, if you buy well, apartments are still a worthy place to sink your dollars.
The buyer of the penthouse in Surfers’ Soul building must think so, as he just sank $15.25m into the renovated top-floor unit. Others have collectively dished out multi-millions on apartments up and down the Coast since the start of the year, specifically in Surfers, Main Beach and Palm Beach.
Yet the apartment market continues to come in for a lot of flack, for one thing or another.
The Ryder report indicated that things could worsen for the unit market on the Coast as the tranche of new-builds earmarked for the skyline come to fruition.
It stated: “Now we see signs of the Gold Coast beginning the process of generating the next apartment glut – every day there seem to be new plans announced for high-rise mega towers, as developers react to the current boom.”
This may be the case, but there is one fundamental difference.
Apartment blocks being built today are not the standard two-bedroom brick boxes that have dominated development for decades.
These are architect-designed, three and four-bedroom abodes with floor plans that would rival many a family home.
They also come with more amenities than you can poke a stick at but with none of the maintenance, which has broad appeal, including to traditional downsizers.
Many of the new developments are also owner-occupier only, so those buying them are doing so to make them their forever homes, which will in turn make them more sought after.
It’s a much different scenario to what we have seen in the past and is bound to change the perception and performance of the apartment market for the better in years to come.