To close out this week we look at two types of housing supply on the Gold Coast – new builds and resale supply.
New housing supply
The Gold Coast is expected to hold 11% of the new urban development across south east Queensland. This development is expected to be built on some 3,200 hectares across the Gold Coast and equates to about 41,800 additional dwellings over the next 20 years.
The current state of new dwelling supply on the Gold Coast is as follows:
1. 19,000 new dwellings (or residential allotments) were registered for sale over the last five years.
2. There was a need to build some 24,000 new dwellings over the same five year period.
3. The Gold Coast new housing market is currently undersupplied by 5,000 new dwellings. This equates to an undersupply in the order of 20%.
4. We estimate that there are approximately 9,250 new residential dwellings or allotments approved, but not yet developed or registered for sale, on the Gold Coast.
5. Based on an underlying demand to build 5,000 new dwellings per annum, this equates to less than two years’ supply.
6. But assuming that the 5,000 undersupply (built up over the past five years) will be absorbed, then the real new housing supply drops to 4,250 dwellings or about 10 months’ supply.
New dwelling supply is extremely tight on the Gold Coast.
Adding further stress is that most of new residential development approvals are small, infill projects.
For example, there were 121 new residential projects approved on the Gold Coast over the past twelve months, of which just 18 or 15% were for projects with more than 50 dwellings. Some 85 or 70% were for projects with just one or two new dwellings.
Resale housing supply
Detached houses: 8,500 sales per annum; 4,850 houses currently listed for sale = 7 months’ supply. What we call a ‘normal market’ - limited price growth is expected.
Apartments: 10,000 sales per annum; 3,150 apartments currently listed for sale = 4 months’ supply. A ‘warm market’ - some price growth is expected.
Townhouses: 4,000 sales per annum; 900 townhouses currently listed for sale = 3 months’ supply. A ‘hot market’ - strong price growth is expected.
For reasons that, I suspect reflect the past more than the current state of play, very few major development companies appear interested in the Gold Coast.
Yet the joint has some real grunt these days - it is the country’s 5th biggest tourist market and the 6th largest urban area - and it cannot keep up with demand.