Three years after construction finished on the most expensive high rise development in Queensland's history, hundreds of its luxury beachfront apartments remain empty — and most of them are not for sale.
Key points:
- The three towers include 340 units, 169 five-star hotel rooms and 170 serviced apartments
- Three years after construction finished, only 88 units have been sold
- The entire south tower is empty and its units have never been listed for sale or rent
The $1.5 billion Jewel development in Surfers Paradise has three towers, with international hotel group The Langham independently managing the middle tower as holiday accommodation.
The north and south towers contain 232 and 108 residential apartments respectively.
But three years since the apartments were built, more than two-thirds have not been put to market.
The south tower is empty, its units do not have titles and have never been listed for sale.
Chinese-backed developer AW Holding Group last week released 30 one, two and three-bedroom apartments, ranging from $900,000 to $6.5 million in the north tower, where 88 units were previously sold.
Amid enormous interstate and international interest that has been fuelling a Gold Coast property boom, the majority of new apartments in the region are typically purchased off the plan and often sell out months or even years before construction starts.
But that has not been the case for Jewel.
Its foreign owners, AW Holding Group, could not be reached for comment, but Total Property Group director Adrian Parsons, who manages Jewel's sales campaign, said they had a "strategic view" of the property's value and were in no hurry to sell.
"The owner's position is they want to maximise the value of their asset," he said.
"We do know also that there are a lot of developments that are not going ahead in the market so there is no desire to rush."
Stalling with high overheads
The strategy has confounded property experts.
David Higgins, Colliers International director of residential project sales for the Gold Coast and Brisbane, said it was "unheard of" for a development of Jewel's size to be financed without pre-sales.
Mr Higgins said overheads, including interest repayments, council rates and maintenance would be astronomical, in addition to potentially hundreds of thousands of dollars a week in lost rental income.
"Cleaning and security is also very expensive so it would be an incredibly high cost to maintain an A-grade building on the beachfront in today's environment," he said.
"If they're not selling, or not selling quickly enough, generally we would come back to price.
"If the project was well priced and the developers were serious, there is very good demand."
Despite the suggestion the Jewel was overpriced, sales have been strong.
The first 70 apartments released in stages one and two since last December sold for a combined $140 million, primarily to Queensland buyers.
Mr Parsons said his team was undertaking 100 inspections each week.
He expects the 30 apartments in stage three will sell out in two months and some units in the south tower will go on sale in December or January.
"The release matches market demand," Mr Parsons said.
"We are very conscious that we make enough properties available for people who are looking to buy.
"We definitely have a housing crisis on the Gold Coast where there is not enough affordable accommodation offered, but I clearly think you would not put this in the affordable category.
"I'm glad the rates bill is not mine."
Calls for housing supply 'right now'
The project's staggered release has raised questions about the ethics of deliberately withholding properties from the market given the state's housing crisis.
Queensland Housing Minister Meaghan Scanlon disagreed that high-end real estate had no impact on overall housing availability.
"Our data suggests that supply is the critical issue," she said.
"Of course we want to see increased supply of social and affordable housing but we also want to see increased supply of any type of housing because it adds more options to the market for people to be able to purchase or to rent."
The minister urged developers to "do the right thing".
"My message to any developer is, if you have housing, we would encourage you to make sure that it is added to the supply that we need right now."
Mr Higgins said the sale of more Jewel apartments would have a flow-on effect as downsizers moved into the complex and vacated their family homes.
"We, as an industry, are so starved of supply," he said.
"That does free up other housing stock and we believe there is a very positive story in the run-on effect.
"Yes it is expensive, yes it is premium, but it does free up other real estate."