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New apartment sales spike on Gold Coast

According to the Colliers International Gold Coast Apartment Report released today, 117 new apartments were sold in the three months to March 2009, compared to just 77 transactions during the previous quarter, ending December 2008.

Colliers International Director of Project Marketing, Brinton Keath, said several factors have started to make a noticeable impact since Christmas, encouraging investors to delve back into the property market.

"In the last quarter the variable home loan rate settled around a historical low of 5.85 percent and vendors began to meet the market in terms of price," he said.

"However, what made the most impact to sales this quarter was the surge in inquiry from Brisbane and interstate based investors looking for Gold Coast apartments, which converted into sales.

"These out-of-towners clearly recognised the value of recent reviews in pricing of apartments by developers and the true value they now represent compared to 12 months ago.

"That said, although activity has picked up of late the new apartment market is not yet out of the woods.

"Once locals return to the marketplace, coupled with the interstate investor market, we will see a solid lift in the quarterly results. We are just at the beginning of the market turning."

The latest report has also shown the City's supply level of new apartments has tumbled, from 7.3 years in December 2008 to 4.6 years just three months later.

Apartments located in Southport and Labrador captured the lion share of sales with a significant 51 transactions recorded, followed by those in the region's centre of Robina/Varsity Lakes, Burleigh Heads and Carrara with 22 sales. Apartments in the beachside hubs of Surfers Paradise, Chevron Island and Main Beach ranked third with 16 sales, and just outperformed the Gold Coast's North Shore – stretching from Runaway Bay to Hope Island in the north – with 15 sales.

Southern beachside apartment projects (with 10 sales), northern New South Wales (2 sales) and Broadbeach (1 sale) accounted for the remainder.

The average sale price of a new apartment during the quarter was just over $825,000.

Mr Keath said the latest report has identified a buyer trend towards completed buildings, which accounted for 64 percent of sales.

"The popularity of Brighton on the Broadwater, Southport Central, Circle on Cavil and Allisee this quarter is evidence of the trend.

"The March quarter has also seen high rise sales almost double the number of those recorded during the December 2008 quarter.

 "This is indicative of immediate to short term needs of buyers, however over the coming months we are expecting off-the-plan investments to come back in favour as consumer confidence continues to improve and buyers take a long term view."

The high-rise sector saw the highest number of sales across the board, with 61 transactions recorded in 31 projects for a combined total of $60.7 million. Meriton's Brighton on Broadbeach – Marina tower – was the top performer with 16 sales.

The medium rise sector saw 34 sales over 25 projects with a gross value of $24.2 million with the best performing project Stockland's waterfront Allisee at Hollywell, with 11 sales during the quarter. Allisee is aimed at the upper end of the owner-occupier market.

The sales saw a wide range of price points and product sold ranging from apartments priced around $500,000 to $2.6 million for a penthouse.

Starkly the low rise sector remained relatively static during the March quarter with sales numbers, average prices and gross sales value around the levels of the December quarter. 22 new apartments were sold during the March quarter, which is up slightly from the 18 sold in the three months to December 2008.

Colliers International Gold Coast Research Manager, Lynda Campbell, who compiled the report, said Proud Central at Labrador, a proposed Southport low rise development, was the only new project to enter the March quarter report.

"With 18 apartments having an average price of $400,000, Proud Central is catering for the First Home Buyer and investor," she said.