Wednesday, January 7, 2009

Gold Coast Apartments in Trouble

"The unit market on the Gold Coast is investor driven. There s currently a good selection of high-rise units available for sale in Broadbeach, Southport, Coolangatta/Kirra and Surfers Paradise. A majority of the units currently available for sale include both developer stock and resale stock within new developments. A large proportion of the resale apartments are being offered for resale by distressed owners and hence have asking prices which reflect a reasonable discount on both their original sale price and also the price levels of the balance new apartment product in new unit projects. In this respect, it is very difficult to attract sales of new apartments given the more competitive pricing structure of the resale apartments. A large proportion of new apartment product on the Gold Coast is sold to interstate and to a lessor extent, overseas investors at price levels which are considered to be in excess of local market values. It will take some time for these stock levels of units to be absorbed especially given the current soft market conditions. Some purchasers, who bought ‘off the plan’ 12 to 24 months ago, are foregoing their deposits before settlement on new product rather than absorbing the loss in market value on settlement."

"It appears there will be more pain to come however for how long and to what extent is difficult to predict. The property market of 2007 is a distant memory with current market values being more reflective of values achieved in 2006."

Source HTW

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