Revealed: Top 10 areas to avoid buying

The Top 10 areas to avoid buying an apartment in Australia
Broadbeach on the Gold Coast, Queensland is on the list.

According to The New Daily's Finance Reporter, Sezen Bakan:

Data released by RiskWise Property and CoreLogic showed CBD and CBD-adjacent areas took up eight of the top 10 suburbs suffering from an oversupply of apartments.

(The New Daily, 7 October 2021)

CoreLogic is a leading global property information, analytics and data-enabled solutions provider. CoreLogic "helps clients identify and manage growth opportunities, improve performance and mitigate risk." Bakan also cites Doron Peleg, CEO of BuyersBuyers (exclusively representing buyers). Peleg warns that people should be wary of buying apartments in the 10 listed suburbs, as they come with a higher risk of rental vacancies and capital loss.

…oversupply has been a long-standing issue in these areas as property developers looking to make the most of expensive land have focused on building small apartments for years.

(Peleg in Bakan, 7 October 2021)

Two of the top 10 areas to avoid in 2021 are found outside CBDs: Gosford in New South Wales and Broadbeach in Queensland.

source: RiskWise Property Group, CoreLogic

Peleg, also a co-founder of RiskWise Property Research, summarises the situation:

• Investing in city apartments has long been a "substantial risk", particularly when buying off the plan.
• People should be wary of buying apartments in the 10 listed suburbs, as they come with a higher risk of rental vacancies and capital loss.
• Oversupply has been a long-standing issue in these areas as property developers looking to make the most of expensive land have focused on building small apartments for years.
• This has caused supply to exceed demand, especially during the pandemic.
• The inclusion of Broadbeach in Queensland unsurprising.
• This is attributed to a "consistent trend" on the Gold Coast of demolishing freestanding houses for apartments, leading to excess supply.
• Overeager investors are also paying "outrageous" apartment prices there due to limited knowledge of the area.
• Some Gold Coast vendors had sold property well above its true value to Sydney investors, who didn't have "the foggiest idea" what they were doing and based their offers on Sydney prices.
• We're talking hundreds of thousands of dollars [in] overpayment. They're absolutely confident that they bought a bargain.

Mr Peleg says Gold Coast vendors were able to sell properties valued at $1.3 million for about $1.68 million to inexperienced but aggressive buyers and-:

that's the reason the market is booming. They're absolutely confident that they bought a bargain.

Source: https://thenewdaily.com.au/finance/2021/10/07/buying-apartment-australia/

Buyers contemplating the purchase of an apartment on the Gold Coast as a family holiday retreat; investment property; rental property; for vacation letting; for capital growth; or as a permanent sea-change move from southern States or from overseas are advised to do their due diligence before signing any contracts or buying apartments 'off the plan'.

In 2020, Surfers Paradise on the Gold Coast was listed by RiskWise as one of the Top 10 danger suburbs in Australia for buying units.(https://www.riskwiseproperty.com.au/News/top-10-unit-oversupply-australia) It seems the issue of overpriced and small apartments on the Gold Coast just moves further south down the Gold Coast Highway each year.

Therefore, Burleigh Heads and Palm Beach are likely to be the next Gold Coast suburbs to come under increased scrutiny in the near future for the same reasons stated above regarding Surfers Paradise and Broadbeach, including issues of over-supply of small, overpriced, buy 'off the plan' units and the sometimes questionable quality of their construction.

Palm Beach skyline with cranes, construction, concrete canyon?

Reputable Gold Coast Real Estate Agents and Property Managers such as Fox's Real Estate Southport will provide sound advice on local prices, capital growth, and investment trends in specific suburbs and locations. They will also supply data on Rates, Body Corp fees and other mandatory taxes and costs; information on the quality of specific apartment building construction and maintenance; and guidance on other potential financial traps when buying property on the Gold Coast.