Subdivide New Land Now

Subdivide New Land Now

emerald-lakeSubdivide new land now – Gold Coast

ADC Says now is the time to subdivide new land on the Gold Coast

See below for reasons why.

Experts say boom will follow bust

VANESSA JONES
jonesv@goldcoast.com.au

The dramatic downturn in new property developments on the Gold Coast could be placing a latent premium on existing stock, according to one of the city’s largest developers.

Nifsan CEO Sean Wardrop said while most developers were discounting or offering incentives on remaining stock, there was an inherent premium built into them as they would be the last available for some time.

“It’s ironic developers, including ourselves, are offering discounts and inducements to clear what’s on our books, but in reality they are a scarce commodity,” he said.

“Scarcity is the fundamental driver for price premiums but we’re all so immersed in the negatitivity of the market that no one is aware of the inherent value in these properties.

“It won’t take long for what’s left on the Coast to be sold and then, as demand builds…prices will accelerate rapidly.”

UDIA Gold Coast branch president Steve Harrison agreed there would be “lower than required lots on the ground” that, as a result, would have a premium attached.

“That is because of the huge changes to the development pipeline approval process, which is so much more extensive, and costs placed on projects by government,” he said.

“It’s about costs, time frames and funding. And the big four banks treat the Gold Coast particularly harshly and that creates a level of uncertainty in the local market. If council isn’t issuing approvals, it’s hard to get finance and therefore there is less stock.”

Mr Harrison said that while this was certainly the case for “flat land”, residential subdivisions and communities, vertical product could also be affected. There could also be a potential shortage in high-rise developments as there is nothing on the horizon,” he said. “Theree are no cranes in sight. It leaves us with a position where high-rise product will continue to sell and reach a point where that is at a premium as well.”

Mr Harrison estimated residential subdivisions would reach a premium in the coming 12-18 months and high-rise stock would follow in the coming three years or so.

Mr Wardrop said with only a few new large apartment developments approved in recent months, there was “a real problem looming for the Gold Coast with at least a two-year turnaround to complete if one was started in the next six months”.

Only 11 development approvals were given and moved to construction in August, down from about 800 in the same month in 2005.

There are fewer than 20 new apartments in the French Quarter of Nifsan’s $1 billion master-planned community Emeral Lakes at Carrara and no new stock will be released there until its $250 million lakefront The Harbour development joint venture with Adelaide Urban Construct starts next year.

Source: Weekend Gold Coast Bulletin
08/10/11 Page 3, Section: Real Estate