Wednesday, September 28, 2011
Miserable Gold Coast
SURGING body corporate fees have combined with price volatility in the wake of receiverships to continue the Gold Coast's ''miserable'' run of highrise unit sales this year. The Midwood Report yesterday revealed 49 unconditional sales of highrise apartments were recorded in the three months to the end of August.
This was down from 51 sales three months earlier and compared with 74 a year ago.
Report author Bill Morris said ''escalating'' body corporate fees were among the factors taking their toll on apartment sales on the Gold Coast as fees and apartment values headed in opposite directions. Mr Morris said the issue was a state-wide problem that was hurting returns for investors. ''Accordingly, the investment market has deteriorated quite dramatically,'' he said.
Mr Morris said the problem was more acute in older buildings but the failure of bodies corporate to allocate enough in sinking funds to meet maintenance issues was swaying potential buyers away from apartments generally.
He said the spate of receiverships in the Gold Coast highrise market, along with a tough stance taken by valuers, also had pushed potential buyers to the sidelines.
''Unconditional sales volumes of new apartments have continued to be miserable for the region since the beginning of 2010, averaging only 57 sales a quarter,'' Mr Morris wrote in the latest Midwood Report. The level of available highrise stock also dropped, with 618 new apartments remaining for sale the lowest in nine years.
Mr Morris said using the sales average of the past two years, the Coast still had 30 months' supply of highrise apartments. The picture for medium and low-rise apartments was even worse, with 24 and six unconditional sales recorded respectively in the three months to the end of August.
''This is a dismal result given that there are 611 new apartments currently for sale in medium-rise projects and 159 new apartments in low-rise projects,'' Mr Morris wrote. He said the State Government's $10,000 stimulus for new homebuyers could see a rise in sales over the remainder of the year.