Saturday, March 12, 2011

Gold Coast Sinking Under Apartments Glut

The front page of the AFR on Wednesday, 9 March 2011:

"Gold Coast Sinking in Units Glut"

  • 2000 apartments worth an estimated $2 billion listed for sale
  • few buyers
  • dire oversupply
  • only 300 apartments are selling on average each year
  • between 5 and 7 year supply of apartments
  • high asking prices and a reluctance by banks to lend had compounded the oversupply problem
  • NAB less likely to lend to the Gold Coast apartment market
  • Mr Korda, receiver for The Oracle, estimates average apartment price for the past 10 years has been about $400,000, while the average price for an Oracle unit is $1.2M.
  • Soul will add to the glut, where the average asking price for the top third of the 77 storey building is $3.87 million.
  • "If you have a $1 million apartment, you could probably only get bank finance for $360,000" Mr Korda said.
  • Its a price point and liquidity issue.

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