Queensland Apartment Market still Flat Out

Anthony Klan

BUYERS have settled on 670 apartments in one of the Gold Coast's biggest home-unit towers despite a rapidly cooling property market.

Two years after deposits were paid, about $350million worth of apartments have settled in Raptis Group's Chevron Renaissance skyscraper this year.

But the Queensland slowdown is 12-18 months behind the southern states, where investors are being forced to settle on apartments worth less than they were two years ago. More than 10,000 new apartments are due to be completed around the country in the next year, with more than a third of those on the Gold Coast.

Valuer Jim Eden of Herron Todd White said developments selling now and due to settle during the next two years could run into trouble as the market cooled.

"They're the ones that are a bit more of a worry," Mr Eden said.

"The developments settling now, which were generally purchased in 2002 and 2003, have experienced decent capital gain so it doesn't seem to be a real problem."

There are 3891 apartments due to be finished on the Gold Coast in the next 12 months.

In inner Sydney there are 1722 apartments expected to be completed in the next year, with 3631 in inner Melbourne and 1261 in inner Brisbane.

At least 12 people who bought into the fifth tower of property company Mirvac's Yarra's Edge development at Docklands in Melbourne are trying to get out of their contracts because prices have fallen since the time of purchase.

LandMark White Victorian research manager Rachel Kelloway said prices at the Docklands had fallen by up to 20per cent since the peak of the market in July 2003.

Property group PRDnationwide said there were 2034 apartments expected to be completed in Melbourne's Southbank and Docklands market in the next 12 months.

It is likely buyers will be given some reprieve in the short term with the Reserve Bank expected to leave interest rates on hold when it meets next week, after official figures released on Wednesday showed inflation in the March quarter was lower than expected.