Posted: 4th October 2024
Posted in: News
The property market on the Gold Coast, both industrial and residential, has seen significant changes in 2024, driven by rising construction costs, limited supply, and strong demand. As a highly sought-after location, the Gold Coast is experiencing substantial growth and rising property values, particularly in industrial areas and vacant land markets. This report focuses on key trends in these sectors, offering insight into the challenges and opportunities facing buyers, investors, and developers in the region.
Gold Coast Industrial Property Market
Rising Land Values and Construction Costs
The Gold Coast’s industrial market has transformed significantly in recent years. Entry-level industrial opportunities, once an affordable option for small businesses and investors, have become increasingly scarce. Substantial increases in both land values and construction costs have pushed many industrial properties, especially smaller, freestanding metal sheds, into the $1 million-plus price range.
Limited Availability of Freestanding Sheds
The availability of smaller, older freestanding metal sheds in central and northern Gold Coast areas has declined markedly. These properties, which were once more affordable, are now often priced above $1 million. This has forced many prospective buyers to look at alternative options, particularly strata-titled industrial units, which have emerged as the dominant entry-level investment.
Strata Title Industrial Units – The New Entry Point
With traditional entry-level industrial options becoming limited, strata-titled industrial units have gained popularity. These units, which range from newly built to around 20 years old, are available in estates scattered across the Gold Coast. While properties in the sub-$500,000 category were once common, most transactions now fall within the $500,000 to $1.25 million range, reflecting the sharp increase in industrial property values.
Freestanding Buildings and Refurbishment Opportunities
For those with a stronger financial position, smaller freestanding buildings remain a secure investment option in the $2 million to $5 million range. There is also a growing trend among savvy investors to purchase older buildings, refurbish them, and partition them into strata-titled units, generating significant uplift in capital and rental values. An example of this is a development in Sumner where a 1,800 square metre older-style building was purchased for $2.8 million in 2022, then refurbished and sold at rates exceeding $4,000 per square metre.
Strong Demand and Tight Supply
Freestanding industrial assets in premium locations remain highly sought after, but competition is fierce. Many owner-occupiers are willing to pay premium prices to secure properties, particularly in areas like the Trade Coast industrial precinct and inner northern suburbs. Rental yields for these properties have ranged between 5.5% and 6.5%, with rents growing in tandem with rising capital values.
Industrial Leasing Conditions
The industrial leasing market on the Gold Coast has been particularly strong, with vacancy rates remaining low and rental prices reaching historic highs. However, recent reports suggest that leasing conditions are becoming more challenging, with signs of tenant rental stress and an increase in lease abandonment. This may signal an upcoming market adjustment after several years of rapid growth.
Gold Coast Residential Land Market
Severe Undersupply of Vacant Land
The Gold Coast’s residential land market is experiencing a severe undersupply, driven by population growth, immigration, and increasing demand for housing. This scarcity has led to rising prices for vacant land, especially in more central areas such as Southport, Labrador, and Ashmore, where prices for newly subdivided lots (under 400 square metres) range from $500,000 to $700,000 depending on location and size.
Desirable Larger Blocks in Central Gold Coast
In more established central suburbs such as Ashmore and Benowa, larger blocks of land are commanding high prices, often up to $700,000. These properties are typically offered as part of house-and-land packages, appealing to buyers seeking a premium lifestyle in well-serviced areas close to schools, shopping centres, and recreational facilities.
Northern Suburbs Growth
Northern Gold Coast suburbs like Helensvale and Hope Island have seen particularly strong demand for vacant land, with prices reflecting this increased interest. For example, a 645 square metre block in Helensvale sold for $820,000 in 2024, up from $715,000 in 2023. This trend demonstrates the growing appeal of the northern Gold Coast as a residential destination, with its proximity to waterways, golf courses, and upmarket developments attracting buyers.
Investment Considerations
Investors and developers have increasingly turned to smaller land subdivisions or house-and-land packages in outer suburbs to capitalize on the rising land values. With a limited supply of vacant land, competition for available blocks has intensified, making the market particularly competitive for first-time buyers and developers alike.
Outlook for the Residential Land Market
Despite the challenges posed by rising costs, the Gold Coast’s residential land market is expected to remain strong. The ongoing population growth, coupled with the region’s appeal as a lifestyle destination, will likely continue to drive demand for vacant land. However, affordability may become a growing concern, particularly as interest rates and construction costs remain elevated.
The Gold Coast’s property market, both industrial and residential, is undergoing a period of significant transformation. While rising costs and limited supply present challenges, the market remains robust, with strong demand for industrial properties and residential land alike. Buyers, investors, and developers will need to navigate these dynamics carefully to find the right opportunities in this evolving landscape.