Property sales within boutique developments are set to soar in the next five years with a new wave of cashed-up buyers prepared to pay a pretty penny to secure a beachside residence on the Gold Coast.
Yet supply is struggling to keep up with demand, with the region currently delivering 30 per cent fewer new dwellings than is needed.
The latest Kollosche Property Insights: Market Trends Report - a series of exclusive reports compiled by prestige real estate agency Kollosche in conjunction with respected industry analyst Michael Matusik – shows that 3,270 residences, priced at $2 million and above, transacted in new projects across South East Queensland during the 2022-23 financial year. Of those sales, more than one-third (1,300) were on the Gold Coast.
The volume of top-end sales has risen markedly over the past two years, fuelled by latent demand and changing buyer demographics and desires. The report states that buyers are increasingly shifting towards boutique apartments that provide luxury amenities, lock-up-and-leave options, distinctive architecture, and the potential for capital growth.
Jamie Harrison, Head of New Projects at Kollosche, says downsizing baby boomers are driving demand and sales in the top-end apartment sector.
“Luxury residential buildings are highly desirable to this demographic, and because they are generally selling their principal residence to invest in a luxury lifestyle asset they are paying with cash,” Jamie says.
There is also a strong future buyer base, both domestic and international, partially driven by rising wealth, which the report states will be a ‘game-changer’ for the market.
Thanks to a robust housing cycle over the past 20 years, the combined net housing wealth of Australians has skyrocketed to around $7 trillion. As the population ages, it is expected that about $272 billion will be passed on in inheritance over the next decade. Historically, a large portion of this is invested in upgrading homes, which will shift the dynamics of the top-end of the housing market.
Current trends indicate that this increased demand will sit with boutique high-end apartments.
“The wealth shift will have a major impact on boutique development in the coming years as a growing demographic seek to treat themselves for years of hard work, with a luxury beachside apartment, which they view as the ultimate reward,” Jamie says.
Adding to the buyer base for these premium properties are international buyers, including expats, who increasingly view Australia as a 'safe-haven' amid potential future pandemics and social/political unrest.
New dwelling approvals in Queensland sit at about 36,500 starts per year, which is failing to meet the rising demand, according to the report, with the deficit most evident on the Gold Coast, where 30 pent fewer homes are being built than is needed.
While the shortfall is driving up land prices, it is also accelerating the demand for new attached dwellings, particularly well-designed, positioned, and appointed oceanside apartments.
Considering upcoming 2032 Olympic building commitments and other significant projects, the report reveals that Tier 1 building capacity over the next five years will be much reduced, which Jamie says will further fuel price rises and the demand for new-build stock.
“There is a definite shortage of housing across all sectors,” Jamie says. “Those developers who can demonstrate a proven track record and have sound relationships with key delivery stakeholders to produce boutique products with the right level of amenity and finishes, are going to really benefit over the next two to three years.”
