The Gold Coast’s most famed suburb – Surfers Paradise – is heading for a significant undersupply of apartments, with economic conditions putting the brakes on new developments in the glitter strip.
According to Matusik Property Insights director Michael Matusik, investor confidence and demand has lifted on the back of the first interest rate rises since March 2008, causing supply in the city’s premier apartment suburb to lag behind.
New research shows annual apartment sales in Surfers Paradise have averaged 2,200 over the past five years, well ahead of its neighbouring suburbs Broadbeach and Main Beach, which recorded an average of 874 sales per annum and 380 sales per annum respectively.
At the same time, just two new projects are underway in Surfers Paradise – Hilton Surfers Paradise Hotel and Residences, being constructed by Brookfield Multiplex, and Soul, being developed by Juniper – which will feature a total of about 700 apartments between them.
“South-east Queensland is poised to face serious undersupply in the next 12 to 18 months and it will be pronounced in Surfers Paradise, which has a strong investment market and reliance on apartment product,” Mr Matusik said.
“The Gold Coast is a sought-after place to invest, underpinned by fundamentals such as population growth, with 15,400 new residents coming to the city each year over the last five years, making it the fastest growing major region in Australia.
“To meet this rising population, the Gold Coast needs at least 7,000 new dwellings per year, but the number approved in the year ending June 30 was just 3,240, less than half of what is needed.”