Gold Coast Land & Packaged Housing Market Update (PRODAP Report)

The latest PRODAP Report, which I author and my team conduct research for, confirms sales of vacant land and new packaged housing in the Gold Coast fell by a marginal 8% in the December 2009 quarter, down from 510 to 468 sales. Therefore, it's safe to say that demand over the latter half of 2009 remained relatively steady. But average (not median) land prices have also fallen by 3.5% in the March 2010 quarter, from $307,542 to $296,660, a positive for new house and land buyers.

The Gold Coast land and packaged housing market has slowed at the lower priced end due to the end of the Federal “boosts” given to first home buyers, but the effect has been very marginal. There is now more sales activity spread across the middle and higher priced end.

Aggregate land and packaged housing stock levels of 1,404 lots represent approximately 16 months supply, which is not high given normal lead times for land development.

New production forecasts for 2010 by Gold Coast developers total almost 4,000 lots and houses. This level of production is equivalent to almost twice the level of current annual demand, indicating that supply should not be a problem in the year, given a responsible level of development funding. However, the supply of stock can change quickly when demand recovers to normal levels.

Medium to high density sites are often economically constrained from supporting affordable housing by the allowable densities specified in the Town Plan. These densities in many cases were set 30-40 years ago when site coverage and building separation were paramount. Most had 40% site coverage, which restricts density and therefore affordability. The Gold Coast City Town Plan is scheduled for renewal by 2012, and if history repeats, this could extend into 2013-14, up to four years away. The current policy is to encourage affordable housing, but densities need to be more flexible and negotiable.

The PRODAP Report is published quarterly and contains a database of sales and stock levels on the Gold Coast, in addition to market analysis & forecasts. See www.prodap.com for more information.