Property consultancy Charter Keck Cramer’s releases insights from its Gold Coast State of the Market report on the Build to Rent and Build to Sell apartment markets for H2 2023.
The report highlights that, relative to other Australian cities in 2023, the Gold Coast’s apartment market showed more positive signs through robust sales and continued pricing growth.
However, despite its growth, the Gold Coast market still experienced some key risks and challenges, primarily in the building and construction space.
Charter Keck Cramer state that the Build to Rent market is realistically only anticipated to emerge at scale after one to two market cycles (10 to 15 years).
This is similar to how the purpose-built student accommodation (PBSA) market emerged in Australia and the Build to Rent sector has emerged in the UK.
The investment landscape also differs compared to how it was 12 months ago.
Investor’s weighted average cost of capital (WACC) requirements have increased due to rate rises, increased construction costs, and the fact that there is a low appetite to take on development risk (especially planning and now construction risk) under current conditions.
Despite this, strong rental growth and Government policy changes are both in favour of the Build to Rent market.
The report reminds the industry to be vigilant with managing risks at this point in the market cycle, particularly as builders are hard to come by given the comparatively small labour pool in the Gold Coast (and Brisbane).
Charter Keck Cramer believes that conditions will continue to stabilise over 2024 and into 2025, as there is more market certainty and confidence.
