The Gold Coast property market has been able to ride out the great property correction of 2023, which has led to better-than-expected outcomes for the commercial space, according to a new report.
The latest Colliers Market Overview for February 2023 has highlighted how the median house price on the Gold Coast has slipped by just 1.5 per cent, or $15,000, to $925,000 at the end of 2022.
This modest decline is in stark contrast to the national fall of over 8.4 per cent in the same period, according to CoreLogic’s national home value index.
Steven King, Colliers Gold Coast’s director-in-charge, said that the latest data is supported by continued growth in the city’s commercial property sector and demonstrates that Gold Coast property prices are holding firm amid volatile conditions nationally.
Looking ahead, Colliers anticipates that the Gold Coast’s economic growth will continue to be strong, with forecasts for 4 per cent growth per year over the next three years, compared to the Reserve Bank’s estimates of 1.5 per cent growth for the national economy in 2023 and 2024.
Throw in the fact that the Gold Coast’s employment market is among the tightest in the country at 2.9 per cent (nationally, the rate sits at 3.7 per cent), and Mr King acknowledges that “the latest population forecasts, the strength of the Gold Coast’s employment market and the massive investment in infrastructure across the city is providing the local property market with remarkable resilience.”
It’s no surprise then that residential market resilience and the strong economic factors at play have spilled over into the office, industrial, and retail sectors.
According to the report, the Gold Coast’s office vacancy rate declined to 6 per cent in January, its lowest level in 14 years, which was attributed to a massive take-up of office space over the past two years amid low construction activity in the sector.
Mr King professed that the market is expected to remain competitive in 2023, with vacancies likely to continue falling due to strong market fundamentals and a constrained supply pipeline.
The Gold Coast’s industrial market is also benefiting from surging demand, fuelled by “a shortage of land and options in other precincts of the Gold Coast”, despite 131,000 square metres of industrial space being added to the market in 2022, which in itself was almost twice the 67,000 square metres brought to the market in 2021.
The director-in-charge sees no signs of the demand abating, warning that there are only 34 hectares of net land supply available for purchase in Yatala, which equates to less than seven months of supply given the average take-up rate of about five hectares a month since the beginning of 2021.
Over the past 12 months, the Gold Coast’s retail property market has also emerged as one of Queensland’s strongest markets in 2022, the report raised.
Total transactions of $675 million during the year accounted for about 25 per cent of the state’s total activity, and retail rents have risen by 15 to 20 per cent, on average, over the year.
That price gain has been driven by rising occupancies, population growth, limited new supply, and higher construction costs.
As outlined above, many of Colliers’ projections for the continued strength of the region’s commercial markets take into account expected population growth in the area over the next two decades.
According to the report, the city’s northern and western suburbs will sustain the highest growth as the city heads towards a population of nearly one million people by 2041, a whopping 48 per cent increase from current levels.
Mr King expressed that these growth forecasts underpin the pace of activity Colliers is currently seeing across each of the key property categories, with Ormeau-Oxenford expected to make up most of that population expansion with another 114,000 people expected to live there by 2041. Coomera’s population is likely to almost triple, while Worongary-Tallai, Southport-North, and Pimpama will all experience significant population growth.
“The high growth areas to the north and west are likely to drive sustained demand for new developments such as retail to service these areas, as well as industrial and commercial areas to provide key local employment nodes,” the director concluded.
Article source: www.smartpropertyinvestment.com.au