Published via The Urban Developer - 08/25/2021 Red-hot demand due to pandemic-inspired sea-changers and downsizers has led to record apartment sales on the Gold Coast, dragging supply levels to new historical lows.
Mosaic Property director Brook Monahan told The Urban Developer that prospective sites would not be purchased to simply fill its pipeline and remained “extremely cautious” about future acquisitions.
“It’s times like these—when the market is performing well—that we are at our most cautious,” Monahan said.
“Costs are escalating on the construction front, putting pressure on margins as well as competition for sites intensifying rapidly with southerners particularly bidding up land values, especially on the Gold Coast.
“We are always fairly conservative in our outlook and approach, and we apply this to all of the decisions we make.
“We want to continue doing what we are doing for a very long time to come, so all decisions are framed with a long-term view in mind and not by maximising perceived short-term opportunities.”
Development over the next 20 years is supported by state government forecasts that the Gold Coast will attract 14,700 people a year with the city’s population reaching 940,000.
The city is expected to need 6300 dwellings a year to accommodate this growth with the combined economic benefit to create more than 150,000 new jobs by 2041.
For developers in sought after locations like the Gold Coast, building costs are now rising at a faster rate than inflation as construction demand continues to outstrip supply for both labour and materials.
“There is no doubt the industry is going to feel the pinch on both fronts and naturally, we are not immune either,” Monahan said.
“One of the reasons we established our own construction arm was to have the ability to have greater control over the process.
“We have worked hard to establish strong supply chain relationships to better mitigate such risks.
“We have also established a solid network of loyal tradespeople across south east Queensland which has enabled us to build such a strong track record of delivery through multiple cycles.
“Again, we can expect a shake out of the sector as for many, the challenges will be insurmountable.”
Published online via Urban Developer
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