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Construction Costs Temper Gold Coast Apartment Boom

Construction Costs

Red-hot demand is pushing material supply, construction costs and delivery times on the Gold Coast to its limits.

Apartment sales on the Gold Coast have picked up pace in recent months with figures across 2021 so far outstripping the surge at the end of 2020.

Speaking at The Urban Developer’s Gold Coast in Focus Webinar, a panel of the city’s key research experts, agents and developers discussed the confluence of factors accelerating development momentum.

The city has been in high demand from interstate buyers with elevated household savings, drawn to increased affordability in south-east Queensland compared to rival markets in Sydney and Melbourne.

“It has been the perfect storm with low interest rates, the inability to travel and working remotely fuelling the region’s recent growth,” Lacey Group managing director Adam Lacey said.

“All of these factors bundled up have made the Gold Coast one of the most desirable lifestyle choices for anyone looking for new property in Australia.”

Construction Costs

▲ A number of major Gold Coast development projects have been built along the Gold Coast Light Rail Stage 3 route, now recognised as an urban regeneration spine. 

According to Urbis, which sampled 70 per cent of the Gold Coast market, there were 750 apartments sold in the first quarter of 2021, doubling the sales figures recorded in the final quarter of last year.

There has also been a continued trend in the decreasing scale of projects with the average apartments per project dropping from 100 in 2018 to 70 in 2020.

This has contributed to an undersupply with 6300 dwellings per annum needed per year to support upwards of 15,000 new arrivals.

Currently the city is delivering an average of 3800 dwellings each year, Urbis director of planning Matthew Schneider said.

Colliers International director David Higgins said buyers active in the Gold Coast market were also trending towards larger apartments, seeking two- and often three-bedroom formats predominantly in the city’s southern beaches.

“While this is a mature demographic seeking comfort, with good proportions and amenity, the number one reason driving their decisions is location,” Higgins said.

“Projects conceived by the right sponsors in the right location and targeting this demographic are reaping the rewards and achieving the best results.

“Of the Victorian purchasers, 80 per cent are owner-occupiers and 20 per cent investors, while New South Wales purchasers are similarly split, 75 per cent and 25 per cent respectively.”

Mosaic founder Brook Monahan said there had been a shift towards the mid-market—apartments between $600,000 and $1.5 million—however, the difficulty remained around feasibility with increasing site values.

“There has been a spike in land values but also in construction costs,” Monahan said.

“I’ve never seen prices rise as quickly as they have recently in the past 17 to 18 years.

“When you have land values being brought forward for development sites and construction costs escalating around labour shortages and materials then margins are compressed substantially.

“If people keep designing and delivering premium products, in turn increasing sales rates in order to get their feasibility to work, then at some point in time the market will level out and suggest that there is too much of that product being delivered.”

Forme managing director David Calvisi echoed the sentiment saying that while the on-market acquisition environment had escalated, there was little difference in off-market pricing.

“Construction pricing in the last six to 12 months has experienced a 10-13 per cent spike in escalation which can blow out a feasibility,” Calvisi said.

“Developers who have sold projects 12 months ago are battling builders who are now saying the previous pricing is no longer valid.”

Aniko Group managing director George Mastrocostas warned that the worsening shortage of timber, steel and other supplies affecting the industry would intensify once international borders reopened and foreign investors re-entered the market.

“Most people are predicting at some stage next year we will get those borders open and the federal budget currently is forecasting that Queensland’s population will increase by 86,000 people—effectively the size of Bundaberg,” Mastrocostas said.

“While this is a sizeable number, I actually think we will eclipse this number once the international borders are reopened.

“This will only increase demand, create a shortage of land, and unfortunately for Queensland, reduce affordability.”


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Luxury new tower vision to take blue chip beachside suburb to the next level

Luxury new tower

Melbourne-based developers set to a new luxury tower at Mermaid Beach on the Gold Coast

The announcement:

With the tide of demand on the Gold Coast for luxury beachside residences still high, Melbourne-based developer Hirsch & Faigen is set to put another shovel in the famed strip of sand.

In a move further cementing the city’s status as Australia’s luxury coastal lifestyle property mecca, Hirsch & Faigen has acquired a site at Mermaid Beach for its much-anticipated second Gold Coast development venture.

Superbly located in the highly sought-after beachside suburb, the development site at 7-9 Mermaid Avenue spans more than 1900sq m.

It is positioned for ultimate coastal living — tucked behind the beachfront ‘millionaires row’ mansions of Hedges Avenue and within a short stroll of the Broadbeach dining and entertainment precinct as well as the city’s premier Pacific Fair shopping destination.

Hirsch & Faigen is looking to bring its visionary development approach to the blue-chip Gold Coast enclave by creating a unique and timeless collection of contemporary residences.

Plans for a 24-storey luxury tower comprising 130 apartments designed by renowned architectural firm Rothelowman are due to be lodged for development approval in coming weeks.

“Mermaid Beach is not only one of Queensland’s but Australia’s most aspirational beachside addresses,” said Hirsch & Faigen director Richard Hirsch.

“We believe in creating unique and sophisticated living spaces with an uncompromising commitment to design, sustainability, usability and standard of delivery.

“Our vision for the Mermaid Beach site will not waiver from this approach, blending with its pristine surrounds and enhancing the lives and wellbeing of its residents.”

Pending its approval, the launch of sales in the project is expected in early December.

Hirsch & Faigen’s acquisition of the Mermaid Beach site follows the recent successful launch of its debut Gold Coast development, the 14-storey boutique luxury apartment tower Hemingway at Palm Beach.

It is also finalising plans for another luxury apartment project on the southern Gold Coast.

Hemingway will comprise 78 lavish residences with frontage to the exclusive beachfront strip of Jefferson Lane.

Even before its launch it had drawn substantial interest from local owner-occupiers and downsizers seeking the quintessential coastal lifestyle but with a luxurious upgrade. Also designed by Rothelowman, Hemingway is a multi-storey homage and reimagining of Palm Beach’s charming holiday shacks from the late 1950s and 1960s in the form of a collection of contemporary beach houses in the sky.


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Hirsch & Faigen launch Hemingway, Palm Beach apartments

Palm Beach

Prices will range from $450,000 to $2 million in the Palm Beach residential project which will comprise 78 apartments over 14 levels.

The Melbourne-based national developer Hirsch & Faigen have officially launched Hemingway, their first apartment development on the Gold Coast.

Prices will range from $450,000 to $2 million in the Palm Beach residential project which will comprise 78 apartments over 14 levels. The penthouse is priced at $4 million.

Rothelowman has designed the tower which has been described as a multi-storey reimagining of the area’s humble holiday shacks from the late 1950s and 1960s.

Named after the famous author Ernest Hemingway, Hemingway is located at 1267-1273 Gold Coast Highway and will front the exclusive Jefferson Lane beachfront enclave.

Palm Beach

Hemingway 1267-1273 Gold Coast Highway, Palm Beach QLD 4221 

Matt George, Hirsch & Faigen’s head of sales and marketing, said they were determined to push the bounds of architectural design to pay homage to the charming beach shacks while exuding contemporary design excellence.

“We went above and beyond to make it feel as though each apartment was its own full scale beach house, just mere metres away from the water’s edge while boasting those luxury finishes that makes the home feel like an indulgent retreat,” George said.

Residents of Hemingway will have access to a range of lifestyle amenities including its own ground-level café and communal open space with a swimming pool, pool lounge, barbeque area and outdoor cinema.

Prior to its launch, Hemingway had already garnered a substantial level of attention from local owner occupiers and downsizers pursuing the quintessential coastal dream with a luxurious upgrade.

The Rothelowman team reimagined the standard bulky apartment block into an innovative shape form that utilises curvature and cut outs to maximise and enhance views from every Hemingway apartment.

“Rothelowman are highly recognised across Australia for their innovative approach to creating landmark structures, and Hemingway was no different. They poured a lot of thought ninto how Hemingway could meld seamlessly into its Palm Beach surrounds while simultaneously enhancing and improving the area,” George said.

“It was important to us to take a design-led approach to encompass the phenomenal ocean views the Gold Coast is famous for, presented in what we like to think of as a beach house hoisted into the sky,”

The Hemingway project is the first development venture on the Gold Coast by Hirsch & Faigen, which has a number of property interests in Queensland and a national portfolio of projects completed over the past decade with a value of more than $1 billion.


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Amenities watch: What’s on offer at Chevron One?

Chevron One

Chevron One offers residents holiday-style living year-round, with 2000 sqm of resort-style amenities

Bensons Property Group’s Chevron One offers residents holiday-style living year-round, with close to 2000 sqm of resort-style amenities.

Designed by Marchese Partners, the project includes a Club One residents’ lounge, floating cinema, dining facilities and sculpted gardens.

As Chevron Island’s first luxury tower, the development has a 24-hour concierge service and 360-degree uninterrupted views that will never be built out.

Chevron One

Chevron One 36-44 Stanhill Drive, Surfers Paradise QLD 4217

The on-site luxury amenities also include a private dining facilities, a library, multiple swimming pools, a sculpture garden and more.

Situated on Stanhill Drive, Chevron One is within walking distance to Thomas Drive cafes and retail shops, Home Of The Arts precinct, and the beach.

Chevron One Residences offer a fully furnished, fully managed and hassle-free ‘turnkey’ lifestyle investment.

Interstate investors in particular will be keen on the 14 day free days of holiday accommodation per year for their apartment.

Developer Bensons Property Group are offering a range of incentives for investors in the 41 level tower designed in collaboration with Marchese Partners and Byrns Lardner Landscape Architecture.

The entry price to Chevron One is as low as $480,000 for a one bedroom, one bathroom apartment. A two bedroom, two bathroom apartment with parking is priced from $705,000.

Estimated completion of Chevron One is late 2023. To secure your new home in the sought after development, request a call from a Chevron One sales agent via Urban.


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