Gold Coast leaps into abyss

The AFR carries a piece on the state of Gold Coast realty today that is a shocker:

Gold Coast property investors have put more than 2000 apartments worth an estimates $2 billion up for sale, but there are few buyers, highlighting the dire oversupply the area is facing.

Only 300 apartments were selling on average each year, which suggested there was anywhere between five and seven year supply of apartments on the market, said KordaMentha partner Mark Korda.

…As a receiver for the $850 million Oracle Tower, Mr Korda has been analysing the prices being asked for Gold Coast apartments.

He estimates the average apartment price over the past 10 years has been about $400,000, while the average price for an Oracle unit is $1.2 million.

…If you have $1 million apartment you could probably only get bank finance for $360,000,”Mr Korda said.

“None of the people who bought those apartments [off the plan] would have expected to have to cover the gap of $640,000.

“So, it’s not only a price point issue, it’s a liquidity issue.”

…Mr Korda said that with banks more cautious on lending, the real estate industry could nolonger rely on the cheap money that was available before the GFC.

The rest of the article is more of the same. California comes to mind.

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