Last year we brought together many Gold Coast Development Industry leaders to have their say on the Gold Coast’s skyline in a 3 part series of the last 50 years, the present and the future of the Gold Coast skyline in 50 years.

Well, since then, the Coronavirus has certainly changed the world.

Many Gold Coast sectors, such as tourism and dining, have been heavily impacted but are finding their feet again. The Development industry seems stable, with land and apartment sales strong, all government levels providing incentives for growth. We have major projects like the GCLR Stage 3A and the extension of the M1 down to Tugun providing large numbers of jobs for local workers.

It also seems that Sydney-siders and Melbourne-ites are escaping and migrating to the warm shores of SE Qld. Surely the large cash spends by all government levels will slow down and the lack of international migration will eventually pinch (2019 – net 210,000 people, 2020 – approx. net 31,000).

We bring these Gold Coast leaders back again to consider the above. From what they see within their businesses and their vast knowledge and experience, how do they predict the Gold Coast Development Industry to perform for the upcoming year?

Tania Moore (Knight Frank) Partner, Joint Head of Gold Coast

As we enter into this new era, geography is becoming less important with consumers having an abundance of choice of where to live, work, learn, socialise and access quality services such as medicine, aged care etc.  The Gold Coast is well placed to leverage off its existing natural and built form however, it will be in competition with other similar locations for those opting for a less CBD-centric working life.  Collectively we will need to work together to differentiate the Gold Coast with a strong focus on technology, transport and placemaking to meet consumer needs, values and aspirations in capitalising on potential relocations of clusters of working professionals across a range of industry sectors.   

Ongoing lockdowns and closed state and international borders have allowed consumers across the country to reflect on their lifestyles which is likely to drive demand for prime property and the requirement for delivery of a wider diversity of residential product, including detached family homes and this should also drive both private and institutional investors interest in deploying cash into the Gold Coast to support existing market activity.

Mark Billsborough: (Bennett + Bennett) Managing Director

We will continue to see strong demand for land and high-end units on the Gold Coast over the next year with Sea Changers, and expats returning from overseas, still wanting to call the Gold Coast home.  The continuation of the HomeBuilder grant, combined with low-interest rates, will also see young home buyers continue to purchase land and take advantage of this combined benefit currently available to them.

Unfortunately though, with a dwindling amount of developable land available and current unit stock being priced well out of reach of the average worker, the Gold Coast will soon face an affordability problem.  

It will be interesting to see over the coming years how the development industry reacts to this issue and which developers will see an opportunity to provide a solution to this impending problem.  

David Brown: (Sunland Group) Executive Development Manager, Special Projects

The last 6 months have seen unprecedented growth on the Gold Coast in all sectors. This has been fuelled by COVID with the SE Queensland lifestyle seen as a desirable option, particularly for southerners. This is set to continue with residential vacancy rates at record lows making investment returns much more viable. Competitive building costs have also been a key factor.

The question is whether it is sustainable.

Record prices are being paid for development sites, established houses and end-user apartments. The take up of available stock indicates continued demand – over the last 12 months, Sunland is experiencing higher sales volumes than in the last 5 years. The challenge will be the viability of development sites as land values continue to rise.

Joe Welch: (Hickey Lawyers) Partner

The amount of optimism for the future is remarkable when you consider this time last year. The local real estate market is being supported by local buyers and local investors. That hasn’t happened for quite some time. Domestic investment is normally more resilient than international investment from China which can be wound back at the whim of central government policy. With low-interest rates and incentives for first home buyers and renovators, there has never been a better time to buy real estate, if you have a job. At the moment demand for employees is high and the resources industry (a jobs generator) is recovering quickly. Major infrastructure and private construction projects in Brisbane will provide income streams that banks will lend on. These drivers point towards another 12 months of buyers with an ability to borrow and banks with a willingness to lend. How long will it last after the next 12 months is anyone’s guess.

However, if vaccinations prove successful and borders are reopened internationally after the next 12 months, the stable society, quality health care,  predictable government and lifestyle of Australia and the Gold Coast, should see renewed international interest in this region. Hopefully, local developers will be primed for this.

On a local level, if Southport can be unlocked and revitalised that deserves to be the next boom area. It already had the infrastructure and facilities required to accommodate more high-density living. It’s a value proposition for those that simply won’t be able to afford Palm Beach and the Southern Gold Coast.

There is a lot to be enthusiastic about for the next 12 months. Let’s hope the enthusiasm is contagious….   

Kevin Gogolka: (Multiplex) Senior Development Manager

2021 to be a growth year for the Gold Coast development industry currently experiencing elevated demand from buyers across all regions (SEQ, Interstate and Overseas Expats wanting to relocate back home) coupled with a new wave of developers eager to take advantage of this dynamic however, caution should be considered so as not to fall into oversupply as per previous cycles which may raise its head in the coming years

David Ransom: (Zone Planning Group) Director

Post-Covid 19 population growth to the City seems to be very strong and is forcing dwellings to be constructed in more intensive arrangements along the City’s coastline and established suburbs. This resulting in strong pushback from residents in those suburbs who are concerned about the rate of change. Yet the Gold Coast has always, from its earliest planning schemes, had a policy of accommodating population growth, and in particular catering for it in residential towers along the City’s coastline.

Future growth could occur through an expansion of the SEQRP urban footprint on the City’s fringe, however, it will need to occur in a manner that avoids flooding and environmental constraints, but eventually, even this expanded supply will run out. Continued intensification of the established City footprint, both through townhouses and apartments is the most likely way to accommodate future population growth within the City.

Regarding ‘greenfield’ land, we have already controlled that expansion. The SEQRP urban footprint and environmental overlays in the Cityplan already stop the City from expanding in terms of area. Cityplan amendments that seek to reduce dwelling supply in the established urban footprint may be intended to take the pressure off population growth into the City, but in reality, will not stop population growth but instead will create an affordability problem for low to medium-income earners in the City.

In terms of liveability, the single greatest threat to liveability on the Gold Coast in the future will relate to housing affordability.  As a City, we are not constructing enough dwellings to cater for population growth, and until this is brought into equilibrium we will face increasing house prices and a tight rental supply which will force low to medium-income earners,  out of the City. Their future will be one of long-distance commuting from other areas where more affordable housing exists. This will have a range of other negative consequences such a clogged roads and labour shortages. As a City, we need to focus on the approval and construction of affordable housing options as a high priority.

Levi Corby: (Hutchinson Builders) Gold Coast Manager

Firstly I would start by saying I’m hopeful that it’s less distracting than the year just past. COVID has changed the way we view our business – most likely for the long term. The off guard stance we all found ourselves in meant our reaction to COVID was destabilising. It seemed the stars had aligned 12 months ago for the Gold Coast, we were in a strong market cycle, construction rates were stable and activity levels were seemingly stable, COVID had us all thinking what is next.

Personally, once the immediate changes to our workplace were implemented the priority was planning for the forward 12 months as best we could with the unknown still out there. We made a decision to back the market, whatever was next we were firm that the Gold Coast would fare well amongst other city centres given our desirability and affordability. The uncertain conditions meant conflicting opinions were rife amongst Industry professionals. It was very early in the pandemic that statistics surrounding property were more promising than first anticipated, the confidence from this grew quickly. This Pandemic put liveability and lifestyle front and centre – where better to be than the GC to benefit from that.

Whilst the suffering is obvious on the Coast in Tourism/ hospitality and education we are fortunate that the migrating southerners, government support and envious location we live in have combined to underpin local groundswell our Residential markets. I see the next few months slow whilst we continue to shake off the COVID hangover of deferred projects etc however from the second half of the year onwards I personally see activity levels being very promising, reminiscent of other strongest of cycles the coast has seen in the past

Raith Anderson: (DBI Design) Managing Director

It looks like a strong 12 months for South East Queensland and the Gold Coast in particular, with not only developers from south of the border rushing to be part of the current development uplift, but also local developers moving forward with projects to take advantage of cashed-up southern purchasers. While the demand is strong for higher-end residential apartments along the coastal villages such as Miami, Burleigh, and Palm Beach, larger development parcels that have been sitting vacant for some time are now changing ownership with the serious intent of supplying to the investment market.

With demand strong for inbound tourism, the Gold Coast has to be the destination of choice for many Australian families looking to getaway. This is being reflected in the highest occupancy rates some hotels have experienced in years and is also fuelling the interest for new hotel product on the Gold Coast.

After missing the last development cycle (s) experienced by the major capital cities, it looks like the Gold Coast is about have its turn in the sun.

Ted Bennett: (formerly: Bennett + Bennett) Founding Partner

I am not in a business so I have only an individual opinion. The points in your lead-in paragraph are all valid, and I think over a 12-month horizon the Gold Coast Development Industry will be in a pretty good situation. There are a large number of projects underway, and there appear to be many applications in for approval.  The government incentives and infrastructure spend will create more development opportunities. Covid 19 will continue to be an issue for everyone, but with the level of control to date, and having vaccines available, it should not have a substantial effect on the development industry.

Domestic tourism should recover slowly and steadily because of the lack of international travel, and because of built-up demand from lack of travel in 2020.    International travel will be much slower to recover and projects aimed at international tourism may be deferred or cancelled.

A non-covid effect could come from the present rocky relationship with China, and this may well have started already – I have no way of knowing.   The flow of funds from  China could slow – both for investing in development projects and for the purchase of end products – houses, units, industrial property.  If this flow stops, some planned projects could be deferred or cancelled.   Inward interstate interest from southern states could compensate partly for this.

Matthew Schneider (Urbis) Director and Property Council of Australia Gold Coast Chairman

The Gold Coast development industry came through 2020 in a strong position. It was unexpected but it really shouldn’t be a surprise. What we have seen emerge is that the drivers of the current market conditions are some of the most important fundamentals – steady population growth; strengthening interstate migration; a strong health sector and effective pandemic response; and a world-class lifestyle proposition, all within a low-interest-rate environment. The lessons learned, and capabilities built, during COVID lockdowns to properly embrace flexible working arrangements have been key and have gone a considerable way of overcoming the Gold Coast’s traditional challenges in creating depth and breadth in the employment market to compete with capital cities for access to talent and investment.

We are optimistic that these fundamental drivers will continue to underpin strong performance in the Gold Coast development industry through 2021. The strength in our sector is fragile though, and we must not fall into complacency as we look ahead. The property and tourism industries are inextricably linked in our city and, while the development sector has outperformed, there remain immense challenges confronting our friends in tourism. We must work together wherever we can to assist in the recovery of the tourism sector.

The complex challenge of housing affordability is now intensifying across the city, driven by extraordinarily tight land supply, record low residential vacancy rates, the strength of the luxury residential sector and land fragmentation. It has never been more important to work together with the Queensland Government to secure the long overdue strata title system reform that we need to unlock long term housing affordability. And we must ensure that planning policies and regulations which either deliberately or inadvertently undermine the efficient use of land or seek to drive away from strongly performing boutique projects and back to high-risk megaprojects are not introduced.

We also need to keep a sharp focus on ensuring we maintain an environment of investment confidence on the Gold Coast. Infrastructure investment and consistency in decision-making are key.

2021 is a year for cautious optimism.

Alan Buckle: (Independent Strata/BC Consultant)

At last, technology is paving the way for living in paradise and working anywhere in Australia. Thank you, Covid-19!! (only, in this context). This has certainly boosted the number of purchasers since the international market waned. By all reports from purchasers of apartments, they are delighted to be owners and residents in the area because they love the region and sunny conditions.

Changes in grants and job keeper may promote continued business caution. Sales are still good, but we need construction to thrive and maintain interest in the region.

Greg Short: (Bennett + Bennett) Director/ Former MD

Our city and the development industry appear to have found a very sweet spot in the current market. While overseas immigration has ceased, for now, our region has benefited significantly from an overwhelming desire by people from the southern states and large numbers of expats returning home and relocating to the Gold Coast. Our state has been very well managed with respect to the impact of Covid 19 which is driving demand by people to visit and want to relocate. It really doesn’t feel like we are in a pandemic living here.

Technology has also improved to a point where the reality of working remotely for large interstate or international companies is a genuine option. Our city is also recognised as significantly better value for housing than Sydney and Melbourne and benefits from a warm subtropical climate and beautiful physical environment. So my view is for a very good year for our industry and even better times to come when we open back up to overseas immigration and those people look at the best options of where to live, which will certainly be here.