Cypress Palms Stage 1 by Meriton on the Gold Coast.
Major developers up and down Australia’s east coast are being forced to reconfigure their off the plan apartments as the Albanese government’s tough tax changes hit the real estate market.
Apartment developer Meriton is altering the layout of some of its Gold Coast units to cater for buyers at the lower end of the scale, due to Jim Chalmers’ tax changes in the May budget. While in North Sydney, another developer says buyers are looking for amalgamated, larger apartments.
“We’ve experienced stronger demand for our more affordable apartments, while demand for higher-priced apartments has slightly declined,’’ said Meriton national director of sales and marketing James Sialepis, discussing the company’s two multimillion-dollar Gold Coast projects.
“We noticed this change a few months ago, and we’ve been proactive in reconfiguring our unit mixes to cater for it,” he said.
Cypress Palms is being developed by Meriton on the Gold Coast.
Meriton is developing the 76 and 90-level Cypress Towers in Surfers Paradise with completion expected next year. Unit prices start from $776,000. One to four bedroom units in Meriton’s Iconica tower, fronting 152 Esplanade, Surfers Paradise start from just under $1.4m.
“Sales are progressing steadily across both of our developments on the Gold Coast, with sales volumes up 5 per cent compared to the same period last year from January to September,” Mr Sialepis said.
“Certain market segments and price points have reacted differently to interest rate rises, and the recently passed tax changes.”
Australia’s largest private developer, having developed 80,000 units over the past 60 years, has made the changes following the Albanese government’s tax changes announced in May.
The capital gains tax reforms which will take effect next July will dramatically change the way the tax is calculated and charged. For Meriton the result is many buyers are looking for cheaper apartments.
It’s a different situation in Sydney where developer Aland is building The Walden tower in North Sydney.
Aland’s The Walden residential project fronting 177 Walker Street in North Sydney.
Aland founder and chief executive Andrew Hrsto said buyers like the fact that several two bedroom apartments have been amalgamated into four bedders priced from $4m to $5m.
“We have found the sweet spot in the market,” Mr Hrsto said, adding that downsizers can sell their stand alone houses on Sydney’s North Shore for $7m to $8m and buy in The Walden at $4m, leaving plenty of change.
“It’s good value and achievable,” he said, adding that the North Sydney tower will be completed in the first quarter of 2028.
“The market is not gangbusters, but we are chipping away at it,” he added.
Since its launch The Walden has sold more than $200m in unconditional sales through SRM’s Ben Stewart, who said there’s a number of downsizers buying an investment property, gearing it in the shorter term with a plan to move in within four to five years.
“We have had sales of $4.5m to more than $11m per unit in that building and we are yet to release the sub penthouse and penthouse but we have already had strong inquiry,” Mr Stewart said.
In Campbelltown, in Sydney’s outer west, Aland sold 74 apartments in its $500m Queen Square development which launched last weekend. All up, Queen Square comprises 542 units, ten food and beverage outlets, a major supermarket and gym.
Mr Hrsto said first home buyers were among the purchasers at Campbelltown last weekend, along with investors and downsizers.
“It looks like there’s not enough stock (in Sydney) for first home buyers,” he said adding that the average unit sale last weekend was around $750,000.