Price growth, tight supply drives $5 billion Burleigh boom
Price growth, tight supply drives $5 billion Burleigh boom
Development in Queensland’s coastal enclave of Burleigh Heads is going into overdrive, with more than $5 billion worth of residential, commercial and infrastructure projects attracting droves of local and interstate owner-occupiers, while at the same time solid price growth is piquing the interest of investors.
Recent research by property consultancy group Urbis showed there were more than 35 major residential, commercial and infrastructure projects currently being planned or under way in the Burleigh to Miami catchment.
Setting the scene for developers is a major round of infrastructure spending by the Queensland government, highlighted by an extension of the Gold Coast Light Rail to connect the Burleigh area to the state’s greater rail network.
And while infrastructure projects dominate the $5 billion of developments under way, Urbis identified more than $680 million in residential and commercial projects in the pipeline.
Urbis Gold Coast director Matt Schneider said the infrastructure spending was combining with the strong market fundamentals of Burleigh, its stunning natural environment and high quality amenity and driving developer interest.
“Competition is very fierce in Burleigh,” Mr Schneider said.
“It was fierce before COVID, we have seen a stark increase in the level of Victorian developers looking for sites through Burleigh.
“Sydney-based developers were already very focused on it, Brisbane developers are still floating in and there is a level of international developers as well, so there is very fierce competition for sites.”
Mr Schneider said while historically residential development on the Gold Coast had been large megaprojects such as Sunland Group’s $1.2 billion Q1, there was an evolution under way to more boutique residential developments around Burleigh.
“What we’ve seen in the last five years in particular is really the scale of projects has decreased significantly, but the volume of them has increased,” Mr Schneider told Australian Property Investor Magazine.
“We are seeing a lot of 15 to 20 storey type developments, on smaller sites, with a stronger focus on uniqueness and design quality.
“Burleigh is really the centre of that approach, where you’ve got urban regeneration happening along a light rail corridor on small sites.
“That’s actually opened up a whole range of developers, both local and from Brisbane and interstate, who are now coming in and doing that scale of project.
“That's been a really good addition to the Gold Coast economy because it’s less risky and more stable. I think that’s been a really good thing, to reset the foundations of the Gold Coast property sector, and it’s bringing a new wave of developers from interstate into Queensland as well, because there is more opportunity.”
Mr Schneider said Queensland developer Spyre Group’s $77 million, 17-storey Natura project, which is being built on The Esplanade in Burleigh Heads, was one of 2020’s top sales performers, and a strong example of the shift in project scale.
Nielsen Properties’ $350 million White Horses, a two-tower project of 22-storeys each, also demonstrated developers’ willingness to create apartments suited to downsizers or owner-occupiers seeking a sea change.
Other high profile projects include Rayjon Group’s $45 million Vantage Burleigh apartment project near the Treetops Plaza, and a 22-level building being planned by prominent developer David Devine in North Burleigh.
Mr Schneider said Bottega Property Group’s 123 Old Burleigh Road was another project shifting the traditional buyer profile in Burleigh, providing a more affordable price point than the typical $2 million-plus luxury apartments historically developed in the region.
“There are two things changing the buyer profile,” Mr Schneider said.
“There is definitely a downsizing phenomena happening, particularly a lot of local Gold Coasters moving out of their detached houses out in the suburbs and coming to enjoy the lifestyle.
“Then there are professional families that are driving it as well for the lifestyle proposition, particularly out of Sydney and Melbourne.
“Both of those market segments are driving a shift to larger, well appointed units with really good amenity and really good addresses.
“That focus on the address and uniqueness has been a really welcome addition and I think that;s actually starting to drive some of the strength of performance, because it’s really resonating with people.”
Investors are also eyeing the area as a solid capital growth proposition, with Burleigh Heads house prices performing strongly over the past 12 months.
Data from CoreLogic shows the Burleigh Heads median house price is currently a shade under $980,000, up 11 per cent from December last year.
Units are also solid performers in Burleigh, with the median price rising from around $570,000 in December 2019 to currently sit around $617,000.
Mr Schneider said he expected that price growth to continue, with future supply remaining relatively tight in comparison to demand, despite developers’ best efforts to keep pace.
“I think that’s the real story on the Gold Coast at the moment,” he said.
“The demand drivers have been there pretty consistently, but supply of quality product is as tight as it’s been for years and I expect those conditions to continue.
“One of the hand brakes of supply in Queensland, and particularly on the Gold Coast, is the body corporate regime.
“A lot of ageing stock in Burleigh Heads is held by bodies corporate, and site amalgamation and strata title processes make it quite difficult for people to amalgamate those sites.
“That’s one of the big barriers to increasing supply, it should stay pretty tight and put a floor under prices for a while.”
Meanwhile, in nearby Palm Beach, Gold Coast developers Anthony Gordan and Paul Younan recently lodged a development application to build an absolute beachfront 76-apartment project at 332 The Esplanade.
The 14-level project, which is being marketed by CBRE, will provide a mix of two, three and four-bedroom residences and five beachfront houses, with the dwellings catered towards owner-occupiers.
Mr Gordon said architecture group Cottee Parker had designed a building to fit in seamlessly with the surrounding environment and maximise the views and lifestyle of residents.
“The size of the site gives us a little more freedom to be creative in the positioning and alignment of each of the buildings to make the most of the views while having plenty of setback from the Gold Coast Highway,” he said.
“On completion, it will be a real oasis of green sitting in stark contrast to the sand and blue ocean beyond.
“We have particularly focused on creating a stunning streetscape with a lush, green feel that will provide a beautiful welcome for residents and their guests.”