Hundreds of people tuned in to watch RWC’s September Between the Lines webinar which took a deep dive into the Gold Coast’s thriving commercial property market.
Ray White head of research Vanessa Rader hosted the webinar, and was joined by Ray White Commercial Gold Coast team leader Luke Boulden, and Ray White Special Projects Queensland Director Matthew Fritzsche.
“Ray White Special Projects specialises in the sale of development sites and specialised property assets throughout Queensland and northern NSW.
“The type of properties we sell range from high density sites in the metropolitan areas to broad acre land, everything from townhouses to land subdivision sites.
“We’ve seen a huge amount of activity on the Gold Coast over the last few years.”
Gold Coast born and raised, Mr Fritzsche spoke about the Shaping SEQ Update which talks about the growth of south east Queensland over the medium to long term.
“We’re projected to go from a current population in SEQ of about 3.5 million to 5.3 million in 2046. So that document talks about population forecasts, infrastructure and zoning and how it looks to accommodate that growth.
“As part of the Shaping SEQ document it appears that the major focus is not on the expansion of greenfield land but rather the consolidation of our urban centres and gentle densification.
“On the Gold Coast there is very little greenfield land remaining, so a lot of that consolidation will probably be focussed in existing infill locations.
“What we have seen over the last two years and throughout Covid is a lot of activity in the medium and high density space. There has been a lot of new development along the coastal spine of the Gold Coast.
“That activity remains strong, but we have seen it soften a little bit in the face of a difficult construction market.”
Ms Rader said alongside the strong population growth came a growing need for medical facilities, and asked Mr Boulden what he saw happening in that part of the market.
“There is a very strong appetite from investors for healthcare backed assets, I think there’s a lot of confidence around them given we are a growing region,” Mr Boulden said.
“The migration into south east Queensland has been impressive over recent years, generated by the COVID-19 pandemic, but at the same time that was a huge global health scare which has probably triggered people to be more conscious of their health as well.
“We’ve seen a massive emergence of healthcare providers in south east Queensland and predominantly the Gold Coast. We’ve seen EDQ really pushing their health and knowledge precinct called Lumina.
“There’s also the emergence of smaller scale medical hubs and one-stop shop healthcare precincts.”
While office markets struggle to adjust to the work-from-home trend, Ms Rader said the Gold Coast had the best performing office market in the country. She asked Mr Boulden what his take was on the region’s office market.
“We are going from strength to strength, and we can attribute a lot of that to the migration during Covid, but the other thing is the affordability compared to other office markets,” Mr Boulden said.
“Our prime grade stock like 50 Cavill Avenue are going for around $650/sqm gross, whereas for a comparative building in Brisbane or Sydney you’d be looking at double that.
“Traditionally we are more of an SME market, or B-grade stock, which has traditionally been our best performer, they’re the ones that continue to be robust.
“We’ve seen uplift in rentals across all grades and contractions in vacancy rates and a contraction in incentives as well.
“I think that’s really due to the migration and the emergence of new small businesses as well, I think the Australian Bureau of Statistics report 4400 new businesses on the Gold Coast in the last three years.”
With strong demand for housing on the Gold Coast off the back of the growing population, Ms Rader asked Mr Fritzsche what the market for residential developments was like, and if it had been affected by the price of construction.
“There is a lot pent up demand for products from buyers on the Gold Coast, but we’re not seeing that translate now into new development more recently as a result of the construction crisis that we’re going through.
“There are developers who are sitting on sites that they’ve bought pre or during Covid, and they’re not able to deliver those developments because of the construction cycle we’re currently in, so I think that will impact forward supply and have some impact on affordability.
“What we’re seeing in the dynamic of the shifting market is a move towards build-to-rent as a focus, and community housing providers as well, social and affordable housing groups are now entering the market in a big way.
“There’s been some big institutional funds taking positions on the Gold Coast and more generally south east Queensland, but it’s good to see some of those players getting really active on the Gold Coast in the major sectors of the market.”
