john natoli and james ledgerwood 2013 prestige report

john natoli and james ledgerwood

PRESTIGE REPORT JUNE 2013 CENTRAL GOLD COAST

The only way is up There has been a noticeable change in sentiment with more sales occurring in the central Gold Coast prestige property market over the first four months of 2013 than we have seen since the peak of the market in the late 2000s. We are seeing stronger buyer enquiry coming through open house inspections and unprecedented enquiry from online marketing strategies. Pre-auction offers are now more common place and the McGrath auction clearance rates are at their best since the opening of the Broadbeach office in September 2010. Our personal clearance rate (James Ledgerwood and John Natoli) for the six months from October 2012 to April 2013 is 92%.

Buyers now feel comfortable that the market is not going to drop dramatically further and may have in fact bottomed out. Therefore buyers are much more bullish at current market values. Since the start of the year buyers are far more anxious to secure their desired property and that fear of missing out has resulted in a notable increase in strong pre-auction offers and competitive bidding at auctions. We now see buyers making offers with the intent to secure a property prior to auction rather than coming in with low offers to test the intention of the seller. Well-presented properties in prime locations are attracting strong attention from a market of anxious buyers.

We have recently analysed all residential house sales in the central Gold Coast prestige market which are above $2M and within a six-kilometre radius of Surfers Paradise, extending from Main Beach in the north to Nobby Beach in the south. In addition to this prestige analysis we have explored the markets of Paradise Waters and Isle of Capri; two of the premier central Gold Coast suburbs. Both the volume and the dollar value of all transactions between January and April 2013 has been near to, or exceeded 50% of the activity in all of 2012. Whilst there was significant sale activity amidst properties under instruction from receivers or mortgagee in possession in 2012, the greater majority of sales activity in 2013 has not been the result of any financial distress. In the following pages we examine key markets in the central Gold Coast precincts. Sales data has been sourced from RP Data.

Main Beach

Main Beach Southport

Southport

Paradise Waters

Paradise Waters

Bundall Surfers Paradise Isle of Capri Broadbeach Waters

Mermaid Waters

Broadbeach

Mermaid Beach

Bundall Isle of Capri Broadbeach Waters

Mermaid James Ledgerwood Waters T 5570 7042 M 0417 927 517 E jamesledgerwood@mcgrath.com.au

Surfers Paradise

Broadbeach

John Natoli T 5570 7008 M 0414 453 221 E johnnatoli@mcgrath.com.au

Mermaid Beach

Prestige Sales $2M - $5M Sales activity in the first quarter of the year show signs 2013 will be a strong year for sellers above $2M. During 2012 there were a total of 39 house and land sales between $2M and $5M and to date this year there have already been 19 sales transacted.

A key driver for this activity has been from buyers looking to upgrade. At the $2M - $3.5M level, young professional families - medicos in particular - have been actively relocating from humble abodes into large family homes. They are purchasing without selling their previous home and unlike five years ago are upgrading within their means. This is igniting the $3.5M - $5M range as buyers are leapfrogging into significant river or beach properties, or into the $5M+ range. Buyers are taking the opportunity to secure what they view as ‘the best of the best’ in terms of location and construction.

Many sales in 2012 and 2013 took place in Paradise Waters, Isle of Capri and Mermaid Beach. Southport experienced its highest activity in the past ten years, mostly around The Southport School precinct including a record sale of a non-waterfront property in Winchester Street in early 2013. Cronin Island welcomed a number of new owners, albeit as a result of distressed sales.

The $2M - $5M prestige market is now moving into a positive environment for both buyers and sellers. The cost of upgrading (purchase/sale price, commission, and stamp duty) is now at its most affordable in almost ten years. Buyers feel confident they are now able to secure the location and home they may have previously viewed as unobtainable.

Top 5 Sales 2012 ($2M -5M) Address

Top 5 Sales Jan - Apr 2013 ($2M -5M) Price

Date

Address

Price

Date

Marseille Court, Sorrento

$4,700,000

Aug 2012

Admiralty Drive, Paradise Waters

$4,582,500

Feb 2013

Via Roma, Isle of Capri

$4,200,000

Oct 2012

Southern Cross Drive, Cronin Island

$3,900,000

Apr 2013

The Promenade, Isle of Capri

$4,000,000

Oct 2012

Commodore Drive, Paradise Waters

$3,750,000

Apr 2013

Albatross Avenue, Mermaid Beach*

$3,925,000

Sep 2012

Commodore Drive, Paradise Waters*

$3,700,000

Mar 2013

Cannes Avenue, Surfers Paradise

$3,888,000

Oct 2012

Admiralty Drive, Paradise Waters

$3,350,000

Apr 2013

Total Sales

39

Total Sales

Total Sales Volume

$111,699,420

Total Sales Volume

Average Price

$2,864,087.69

Average Price

* Vacant Land

* Agents advice

19 $54,073,131 $2,845,954.26

Prestige Sales $5M+ Strong activity has continued above $5M this year starting with the record breaking riverfront sale of 5 McMillan Court, Southport, selling at auction for $9.8M. This sale was highly competitive with ten registered bidders, three of whom competed above $8M. The sale reset the record for a central Gold Coast riverfront property as well as recording the highest sale at auction since the peak of the market in 2008/2009. The activity on the Southport riverfront continued with a Koorong Street sale in the same week for $5,250,000.

In April, six registered bidders vied at auction to compete for one of the prime central Gold Coast north-facing riverfront positions at 31-33 The Corso, Isle of Capri, which sold on-site for $6.35M. Two beachfront sales also took place with a double-block in Main Beach selling off market for $5.75M and a stunning home in Mermaid Beach for $5M at auction.

The purchasers of all five sales above $5M in the first four-months of 2013 have originated from the Gold Coast. Whilst offshore and interstate buyers have been actively looking at many of these properties, it has been local Gold Coast residents acting on the opportunity to secure prime Gold Coast locations and homes, which in some cases have not been offered for sale in over 30 years. The volume and frequency of these sales has been at a level not seen since the mid 2000s and is in turn opening up the opportunity for high-end property owners to achieve sales above $5M within a reasonable period of time and with considerable competition between purchasers.

Top 5 Sales 2012 ($5M+) Address

Top 5 Sales Jan - Apr 2013 ($5M+) Price

Date

Winchester Street, Southport

$9,500,000

Jul 2012

Main Beach Parade, Main Beach

$8,275,000

Surf Street, Mermaid Beach

Price

Date

McMillan Court, Southport

$9,800,000

Jan 2013

Nov 2012

The Corso, Isle of Capri

$6,350,000

Mar 2013

$7,300,000

Apr 2012

Main Beach Parade, Main Beach

$5,750,000

Feb 2013

Southern Cross Drive, Surfers Paradise

$6,100,000

Jan 2012

Korong Street, Southport

$5,250,000

Jan 2013

Admiralty Drive, Paradise Waters

$5,900,000

Jul 2012

Hedges Avenue, Mermaid Beach

$5,000,000

Jan 2013

Total Sales

5

Address

Total Sales

5

Total Sales Volume

$37,075,000

Total Sales Volume

$27,425,000

Average Price

$7,415,000

Average Price

$5,485,000

Isle of Capri Isle of Capri has experienced considerable growth in the activity of house sales in the first four-months of 2013 compared to the previous full calendar year. In 2012 there were 36 recorded transactions ranging from a low of $464,000 for a dry block, up to $4,200,000 on Main River, with an average sale price of $1,286,847. During the first four-months of 2013 there has been a strong increase in activity with 18 sales, representing 50% of the total 2012 year turnover. The average price over this period was $1,545,613 and represents an increase of 20% over the previous year average. Activity below $1M matched the turnover above $1M with nine sales each.

Above $2M, 13 properties changed hands between January 2012 and April 2013 with the highest price sale recorded in March of this year at $6,350,000. Seven properties sold at this level during the entire year of 2012 whilst six sales have already been recorded in the first four months of 2013.

The correction of property prices over the past year on the Isle of Capri has provided buyers the opportunity to secure waterfront property well below $1M. This has given many buyers the opportunity to enter a market that was once perceived to be beyond them.

The outlook for Isle of Capri in 2013 and beyond is very positive as we believe momentum in the suburb will continue as activity in the Central Gold Coast market gains traction in a historically low interest rate environment. A significant driving factor that will assist the future growth of the area is the current redevelopment of the Capri shopping centre to be renamed ‘Capri on Via Roma’ and set for completion in October of this year.

Top 5 Sales 2012 Address

Top 5 Sales Jan - Apr 2013 Price

Date

Address

Price

Date

Via Roma, Isle of Capri

$4,200,000

Oct 2012

The Corso, Isle of Capri

$6,350,000

Mar 2013

The Promenade, Isle of Capri

$4,000,000

Oct 2012

Naples Avenue, Isle of Capri

$3,150,000

Feb 2013

The Promenade, Isle of Capri

$3,050,000

Apr 2012

Gibraltar Drive, Isle of Capri

$3,020,000

Feb 2013

Naples Avenue, Isle of Capri

$3,000,000

Jan 2012

Amalfi, Isle of Capri

$2,500,000

Feb 2013

The Promenade, Isle of Capri

$2,600,000

Mar 2012

The Lido, Isle of Capri

$2,500,000

Mar 2013

Total Sales Total Sales Volume Average Price

36 $46,326,500 $1,286,847.22

Total Sales

18

Total Sales Volume

$27,821,050*

Average Price

$1,545,613.89

* 3 sale prices unavailable

Paradise Waters Throughout the 2000s Paradise Waters experienced some of the strongest price growth on the Central Gold Coast. Since 2008 the waterfront suburb has seen significant repricing, driven largely by distressed sales. January to April 2013 has finally started to see a return of aspirational buyers anxious to acquire some of the best waterfront real estate in the central Gold Coast. The Light Rail construction, the focus of coffee shop conversation for Paradise Waters residents, may have made commuting a little more frustrating however it has not stopped properties changing hands.

During 2012 there were a total of 23 sales, the lowest price being $830,000 for 29 Admiralty Drive. The majority of sales (12) were in the $1M to $2M range for canal front homes. In contrast, of the 11 sales in 2013 the strongest activity has been on the riverfront with eight sales above $2M, five of which were above $3M. 2012 saw the same number (eight) of $2M+ sales over the entire year. There has clearly been a shift in confidence in Paradise Waters.

Our outlook for the rest of 2013 is positive. We expect competition amongst buyers to continue to gain momentum as a result of a low number of homes for sale in Paradise Waters and competitive bidding at auctions. Aspirational purchasers, who years ago never believed they could afford to purchase in Paradise Waters, will represent a large portion of the market over the next 12 months as they capitalise on affordable prices and the RBA cash rate at record lows. This is assisting both buyers and sellers. Sellers with realistic expectations in 2013 who target aspirational purchasers may find the buyers’ ‘fear of missing out’ will attribute to strong competition for their properties. All in all it looks like Paradise Waters has turned the corner towards recovery in 2013 and beyond.

Top 5 Sales 2012 Address

Top 5 Sales Jan - Apr 2013 Price

Date

Admiralty Drive, Paradise Waters

$5,900,000

Jul 2012

Admiralty Drive, Paradise Waters

$3,700,000

Admiralty Drive, Paradise Waters

Price

Date

Admiralty Drive, Paradise Waters

$4,582,500

Feb 2013

Jun 2012

Commodore Drive, Paradise Waters

$3,750,000

Apr 2013

$3,500,000

Mar 2012

Commodore Drive, Paradise Waters

$3,700,000*

Mar 2013

Norseman Court, Paradise Waters

$2,780,000

Aug 2012

Admiralty Drive, Paradise Waters

$3,350,000

Apr 2013

Admiralty Drive, Paradise Waters

$2,300,000

Jul 2012

Seafarer Court, Paradise Waters

$3,250,000

Mar 2013

Total Sales Total Sales Volume Average Price

23 $43,985,920 $1,912,431.30

Address

Total Sales Total Sales Volume Average Price * Agents advice

11 $29,987,500 $2,726,136.36

Recent sales by John Natoli and James Ledgerwood

SOLD 5 McMillan Court Southport

SOLD $9,800,000

5-7 Surf Street Mermaid Beach

$2,600,000

25 Cylinders Drive Kingscliff

$1,580,000

48 Buccaneer Way Coomera Waters

$1,000,000

5326 Marine Drive North Sanctuary Cove

SOLD 13A Ocean View Easement Mermaid Beach

$2,250,000

21-23 Winchester Street Southport

$1,150,000

215 Monaco Street Broadbeach Waters

$785,000

7409 Ellensbrook Drive Hope Island Resort

SOLD $6,350,000

23 The Lido Isle of Capri

$2,150,000

110 Crescent Avenue Hope Island

$1,100,000

5286 Marine Drive North Sanctuary Cove

SOLD

SOLD

SOLD 12 Portobello Drive Mermaid Waters

31-33 The Corso Isle of Capri

SOLD

SOLD 26 Buccaneer Court Paradise Waters

SOLD $7,300,000

SOLD

SOLD

SOLD

$2,500,000

$1,660,000

SOLD

SOLD

$1,082,000

SOLD $671,000

8093 Riverside Drive Sanctuary Cove

$490,000