Issue 29 | The Property Development Review

Market Overview - QLD

Dax Roep Harcourts Coastal Commercial

Q. What are the key market trends occurring throughout 2021 in your region? A. On the back of the well publicized hunger for property throughout the Country, it seems the Gold Coast may have lead the way in price growth and this has fueled demand and enquiry fromacross the country for development sites of all types and scale, whether it be for land subdivision, townhouses or high density apartment buildings. Most if not all development groups have not been able to keep up their supply pipelines tomatch demand frombuyers for end product – again fromentry level prices to the premiumend of themarket. The standout no doubt has been the land segment which simply does not have enough supply. This has more recently crossed over to the investment segment which we anticipate will see further growth over the course of 2022 on the back of a volatile sharemarket. Q. What have been the fundamental drivers of demand amongst buyers? A. Buyer demand has been significant for any landholdings that can provide product for the end-user market, in particular the beachfront and beachside apartment sectors that can satisfy buyers thirst for luxurious, lifestyle focused abodes. On the back of this demand has been soaring rental prices and record low vacancies – with either permanent or holiday rentals in hot demand for these properties. Following on from this, any sites that can offer sustainable views, whether they be water, ocean, hinterland or otherwise are equally desired. In saying this, the regional areas which for a long time have historically been sporadic, are now seeing a far greater focus.

coast region. A vast percentage of land that remains developable faces constraints including but not limited to flood, vegetation and koala overlays, provision of services and slope. Q. Howwould you evaluate the impact of the past eighteen months in your local market? A. Unprecedented is the only way to describe the changedmarket conditions andwe have typically witnessed a doubling in land and site prices and comfortably a 10-fold increase in demand frombuyers for both ‘off the plan’ and completed product. Q. What are your expectations for the commercial property market over the next twelve months? A. Given the press we are witnessing every day and economic forecasts, in particular relating to interest rates rises and affordability, we do expect to see a tampering in price growth which for many participants in themarket will be welcoming received and I think most people would agree that we just can’t keep continuingwith double digit growth again in 2022. The other major driver is the impacts of the ever increasing constructions costs (and constrained supply of materials), which we expect will force a number of proposed projects not yet out of the ground to bemodified in line with the changed conditions. Fortunately we genuinely see the SEQ area fairingmuch better than it’s interstate counterparts with strong interstatemigration and the price gap still present compared to the other capitals, particularly in the western Gold Coast and Brisbane growth corridors. Q. Talk us through the most significant deals you have transacted thus far in 2021. A. Alongwith the strengtheningmarket conditions over the past two years, this has of course been reflected in huge increases in enquiry levels for residential, commercial, industrial andmixed-use sites of all sizes and price points and it’s not unusual to receive in excess of 200 inquiries for such properties andmultiple offer situations. This has been coupledwith buyers needing tomake ‘clean offers’ where traditionally lengthy due diligence terms, or settlements were the norm. An example of such an asset was a 16.49 hectare landholding at 127 Mahers Lane, Terranora which was being sold by the family of a well recognised local Gold Coast construction under a four week EOI process. The process yielded over 250 enquiries andmultiple offers with a cash offer froma Gold Coast developer of $11,000,000 plus GST being successful. This site had no existing approvals. We were also fortunate to sell another large townhouse site for this same family, which again saw 200 plus enquiries and a cash sale price over $11,000,000 – again to a local developer who is proposing a townhouse project up to 100 units.

Q. Reflecting on recent transactions, what has been the profile of buyers and has this shifted from previous years?

A. Over the past ten plus years following on from the GFC, buyers for development sites within the Gold Coast greater region area have originated from the local area and Brisbane and have been dominated by the well knowprivate and public development groups typically active within this sector. The exception to this was the highly publicized influx of major Asian based players prior to the on-set of Covid in 2019/2020. However over the past two years, we have witnessed an unmissable interest from interstate buyers – particularly Melbourne and Sydney seeking opportunities of all scale. Q. What types of assets are most in-demand given the current environment? A. Without doubt the single strongest asset is land suitable for residential land subdivision given the severe shortage of stock within the greater SEQ area and unprecedented price growth. Most buyers and their financiers in particular view it as amuchmore secure asset over the longer termprice wise, even when themarket ultimately slows and sales rates taper off. The greatest difficulty being faced however is the restrictive areas of supply under the SEQRegional Plan, specifically in the Gold Coast and Sunshine


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