Gold Coast Housing Supply Critical

A critical undersupply in the Gold Coast residential market has left the area needing to build over 35 new dwellings per day in order to cater for the population boom. Brisbane?based, independent analyst Micahel Matusik said that drastic measures must be taken by local authorities to stimulate development, and house the 16,700 new residents that call the area home each year.

“The Gold Cost is currently undersupplied by 43 per cent when the number of dwellings starts for 2008/09 is matched with the projected underlying demand” he said. This means that 8500 new dwellings need to be constructed each year “or about 35 per working day” in order to cater for the city’s rapid population expansion. “As it stands now, on average only 550 new dwellings have been approved per month on the Gold Coast since July 2006 – a shortfall of almost 2000 a year when compared to what needs to be build” he added. Despite these figures, Mr Matusik believes there is a flip?side for investors.

“Demand, given the rapid decline in interest rates, is strong and will get stronger over the next six to 12 months, meanwhile, supply is weak and will only get worse in the months ahead” he said. The Gold Coast’s housing crisis has been perpetuated by a strong population growth and a shortfall of new developments – a direct result of the economic downturn and increased infrastructure charges.

“Astute investors are realising there is a golden opportunity in the market to pick up a bargain and position themselves to benefit from the Gold Coast’s housing shortage” said Mr Matusik. He added that both owner occupiers and investors were seizing the opportunities created by the economic downturn and were snapping up properties and creating major benefits for the new projects currently in the market.

“The reality is that there are very few new property developments either under construction or ready to commence on the Gold Coast as a result of the economic downturn.This will create an environment for ongoing price growth” he said. According to Mr Matusik, developers who are forging ahead will find themselves in a unique position when their product is released to the market, as demand for dwellings will clearly surpass supply. “The projects which are either underway or in the planning stages are set to become the major beneficiaries of the Gold Coast’s supply shortage as they will be the only ones delivering new products to the market for some time” he said.