PROPERTY PORTFOLIO
2022 MARKET UPDATE WITH STEVE HUNT | MEDIAHUNT.COM.AU
MOVING NORTH
Migration will drive Queensland’s property market.
Sam Arnaout.
MIGRATION AND THE STATE’S VALUE proposition are set to be the key drivers of the Queensland property market over the next decade. That’s almost the consensus among experts in the property industry who have been quietly analysing the latest ‘slowdown’ in the market. Slowdown is usually a word that implies things are not going well in any particular market or economy. In the property and real estate sector this doesn’t seem to be the case, in Southeast Queensland at least. The reality is that many of my clients simply cannot keep up with the demand for their projects – demand that is being driven by sustained high migration and a ‘slowdown’ in the release of new projects. This slowdown is not really a slowdown at all. It’s a constriction of new product supply to the market that is actually creating greater demand for the product currently in the market. This, in ef fect, is protecting property values. Just look at the rental market. If you’re an investor, you’ll be rubbing your hands together with the rental vacancy rate in the Southeast corner at around one per cent. With the unemployment rate at 3.5 per cent nationally, one only has to look at the M1 between Brisbane and the Gold Coast to see that most people have jobs, and most people can afford their rent. To coin Mark Twain, any reports of the demise of the market are greatly exaggerated. Quite the contrary. The slowdown in our economy when viewed through the prism of rising construction costs and a few construction companies going under is a mirage indeed. Let’s look at the Gold Coast, which was the centre of the Covid-inspired boom.
Firstly, I’m going to use the example of one apartment project in the southern suburb of Palm Beach as a perfect example of the yin and yang of the market. The $140 million Alegria project on the central Palm Beach beachfront sold all of its apartments in rapid time during the height of the boom, and yet this project is no longer going ahead. Why? The prices the developer sold the apartments for was too cheap under the backdrop of rising construction costs, making the project unviable. It was subsequently shelved, with many disappointed purchasers handed their deposits back. This tightening of supply forced by these and other projects across the Gold Coast have pushed genuine buyers into other projects, facilitating great success for those which have already locked into construction contracts. I have already heard of prospects from Sydney, Melbourne and Southeast Queensland looking further north to the Sunshine Coast, Townsville and The Whitsundays for new investments. The $350 million Shute Harbour Marina project at Airlie Beach has reported increased inquiries from buyers who traditionally looked at Southeast Queensland. According to Rob Taylor of Taylors Property Group, ‘the push from buyers in southern capitals into regional markets during the pandemic has significantly increased the exposure of the area with many looking for a lifestyle change’. Shute Harbour Marina has received over 600 expressions of interest amounting to $21.5 million in sales in less than two months. This increased interest in the Whitsundays from Southeast Queensland has resulted in a 25 per cent property pricing increase over the past 12 months, according to Mr Taylor. Back to the Gold Coast, the industrious Sam Arnaout and Iris Capital has hit the jackpot in central Broadbeach with more than $200 million in sales since Colliers Gold Coast launched his $800 million V & A project to the market late last year. These sales came as the market was ‘softening’ – or more to the point, returned to a more normal