The $1 million-plus median sale price for Gold Coast homes is seemingly bulletproof with the latest property report from Colliers showing that it has held up strongly despite the rapid-fire increase in interest rates over the past year.

Director in Charge of Colliers Gold Coast, Steven King said, “the residential market remains strong, with property prices and rents increasing due to population growth outpacing supply.”

But the latest Gold Coast Market Overview report for April also reveals that the median sale price has been sustained amid a broader trend of lower sales volumes.

Adding to the pressure, the report finds that approval of residential lots on the Gold Coast has plummeted to 10-year lows, as a severe shortage of available land is failing to keep pace with population growth. 

The April report has revealed that the median house sale price in the Gold Coast for the March quarter was $1.032 million, remaining relatively steady over the past year even though it had a slight fall in the December quarter. 

Residential Director of Colliers Gold Coast, David Higgins said, “we expect that the median Gold Coast house sale price will continue to remain stable, especially with consideration to the driving forces of high construction costs, labour shortages, high debt costs impacting developments, limited supply of properties and high demand that are making existing properties more valuable.”

However, according to Pragya Sharma, the Senior Manager of Research at Colliers and the report’s author, this minor pullback will not last amid sustained demand which is particularly strong among local buyers.

“After the median sale price for homes topped $1 million for the first time in early 2023, the median has remained pretty much the same since then,” said Ms Sharma.

“This is despite the persistent challenge of housing affordability leading to a continuous decrease in property transactions over the year.”

The steady result for houses compares with a modest increase for apartments where the median sale price of $730,000 is up from $720,500 in the December quarter. 

The increase comes as apartments priced from $500,000 to $700,000 – which is the price range representing the majority of Gold Coast apartment sales over the past year - saw the biggest drop in sales transactions.

The Colliers report revealed that houses in the $1 million to $1.5 million price range saw the highest level of sales activity in the March quarter.

“The volume of sales across the board have been falling steadily since their peak in 2021,” said Ms Sharma.

“This trend has been fuelled by higher unaffordability due to rising interest rates and elevated cost-of-living pressures. But with inflation receding faster than anticipated, opening the way for the RBA to potentially look at lowering interest rates, we’re now starting to see more investors entering the market.

“Should forecasts from some of our biggest banks predicting rate cuts as early as the second half of 2024 come to fruition, this shift is expected to reignite investor interest in the Gold Coast residential market.”

While the Gold Coast’s residential vacancy rate has eased in recent months, it still remains extremely tight with the latest SQM Research’s February 2024 data revealing vacancies sitting at 1.1 per cent.

According to Rental Tenancy Authority, overall rent increased by about 10 per cent, with four-bedroom homes rising by 7 per cent in the year leading up to December 2023.  One and two-bedroom apartment rents increased 13 per cent and 16 per cent respectively over the same period.

“The steady growth in rental returns remains a key support for residential property on the Gold Coast among investors,” said Ms Sharma.

“While we have seen an upswing in interstate buyers on the Gold Coast in recent years, and while this trend continues, locals are among the buyers dominating the market at the moment, especially in the wake of investors leaving the market following the recent round of interest rate hikes.

“However, as interest rates have stabilised and with the prospect of a potential easing ahead, we’re seeing early signs of investors keen to re-enter the market.”

More broadly, the Colliers report warns that the Gold Coast continues to face headwinds in terms of delivering enough housing stock to cater for sustained demand that is still being driven by high migration rates to the Gold Coast.

“Developers continue to grapple with the fallout from successive interest rate hikes and higher material costs, and this is reflected in the slump in overall building approvals for the Gold Coast,” said Ms Sharma.

After recording total building approvals of 5,941 in 2022-23, the Gold Coast recorded 3,299 approvals from July 2023 to January 2024.

The Colliers report reveals that most of these approvals have been granted in Surfers Paradise, Broadbeach-Burleigh, Ormeau-Oxenford, Robina, and Coolangatta, many of which have a higher concentration of apartments.

Ormeau-Oxenford are the only areas that stand out in terms of a higher number of approvals for house developments. 

“With the state already grappling with an increasing backlog of residential projects, some of these approved projects may not progress to the construction phase, especially larger-scale developments,” said Ms Sharma. 

“This will continue to add to the challenges faced by the Gold Coast in meeting its housing demands.”

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