Colliers report finds the Gold Coast riding out the great property correction of 2023
WORDS: Nikolina Bojanic PHOTOGRAPHY Supplied
The great property market correction of 2023 has been kept at bay on the Gold Coast with research from Colliers revealing national house prices have fallen more than five times as much as Australia’s lifestyle capital.
The latest Colliers Market Overview report reveals Gold Coast’s median house price slipped by $15,000, or just 1.5 per cent, to $925,000 at the end of 2022 – down from the $940,000 reported by Colliers previously at the peak of the market in June last year.
The modest price pullback for the Gold Coast compares with a record fall of 8.4 per cent in CoreLogic’s national Daily Home Value Index from the peak of the market in May last year until January 7 this year.
Colliers’ Gold Coast director-in-charge Steven King says the latest data, supported by continued growth in the city’s commercial property sector, demonstrates that Gold Coast property prices are holding firm amid volatile conditions nationally.
“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,” said Mr King.
“Certainly, we’re seeing challenges across the board, driven by higher construction costs and labour constraints causing ongoing housing supply issues, but the Gold Coast is still firing on all cylinders from an economic perspective which will continue to support the residential and commercial sectors in the near term.”
The Colliers Market Overview report for February 2023 offers a robust view of the Gold Coast property market with resilience in residential property spilling over into the office, industrial and retail sectors.
The report forecasts the Gold Coast economy will grow 4 per cent a year over the next three years, making it an economic hotspot in comparison to the Reserve Bank’s estimates of 1.5 per cent growth in the national economy in 2023 and 2024.
Employment on the Gold Coast grew by 1 per cent over the year, keeping the jobless rate at 2.9 per cent, well below the national rate of 3.7 per cent.
“The Gold Coast employment market is among the tightest in the country, with the jobs market well supported by new businesses relocating to the city to capitalise on emerging growth opportunities,” said Mr King.
Among the key metrics revealed in the Colliers report is the massive take-up of office space on the Gold Coast over the past two years amid low construction activity in the sector.
With a total vacancy of 27,467sqm out of 454,149sqm of total stock, the Gold Coast office vacancy rate declined to 6 per cent in January, its lowest level in 14 years.
“We’re expecting the market to remain competitive in 2023, with vacancies likely to continue falling due to the strong market fundamentals and a constrained supply pipeline,” said Mr King.
“The strength of the office market is reflected in a 5 to 10 per cent increase in office rents in the key Gold Coast precincts, with strong demand for A-grade and B-grade spaces.”
Mr King said the Gold Coast’s growth forecasts were also supported by 131,000sqm of industrial space added to the Gold Coast industrial market in 2022.
“This is almost twice the 67,000sqm brought to the market in 2021, and comes on top of an expected 172,000sqm to be added in 2023,” said Mr King.
“The industrial market is benefitting from surging demand from owner occupiers and investors with the Yatala Enterprise Area the epicentre of industrial growth for the Gold Coast.
“A shortage of land and options in other industrial precincts of the Gold Coast has fuelled demand for strata warehouse units which is driving industrial property prices higher.”
However, Mr King said the strong take-up of industrial land will lead to further constraints by the end of this year.
“There’s only 34ha 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 5ha a month since the beginning of 2021,” he said.
“A shortage of industrial land could impact the pace of economic growth in the city. The Gold Coast’s supply of fully serviced industrial property is at an all-time low, which is driving up land prices, particularly in core precincts.”
The Gold Coast has also emerged as one of Queensland’s strongest retail property markets in 2022 with total transactions of $675 million during the year accounting for about 25 per cent of the state’s total activity.
“This is particularly notable because Queensland itself was the most active market in the country for retail transactions,” said Mr King.
Among the major transactions was the $265 million sale of Homeworld Helensvale, which was Queensland's highest transaction on record for a large format retail centre.
The Colliers report notes that retail rents on the Gold Coast have risen by 15 to 20 per cent on average over the year due to rising occupancies, population growth, limited new supply, and higher construction costs.
Supporting the Colliers report’s growth forecasts are projections of massive population increases for key Gold Coast suburbs over the next two decades.
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 – an increase of 48 per cent from current levels.
Ormeau-Oxenford will 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 Mermaid Beach-Broadbeach are each expected to double in population.
“These growth forecasts underpin the pace of activity we are currently experiencing across each of the key property categories,” said Mr King.
“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 employments nodes.”