Melbourne-based Bensons Property Group will build the first major apartment tower on Chevron Island at Surfers Paradise, buoyed by higher deposits allowed in Queensland for off-the-plan sales.
The $230 million project will comprise 210 apartments in a 40-storey tower on a site amalgamated from several smaller residential properties and which already has development approval.
Bensons’ first foray into Surfers Paradise comes as a residential revival at the popular resort market gains momentum, with property financiers including Wingate and developers such as Ralan investing in the glitter strip
Stamp duty factor
The Chevron Island that Bensons plan to develop supplied
Along with the recovering market, a big factor for Bensons’ managing director Rick Curtis is Queensland’s stamp duty regime, which allows developers to collect a deposit of up to 20 per cent for off-the-plan sales, compared to 10 per cent in other markets.
“It’s more security,” Mr Curtis told The Australian Financial Review. “It’s all about trying to minimise risk in these developments.”
That extra deposit could make the difference for a foreign buyer sticking with their purchase or simply walking away if they were facing, for example, more difficulty getting finance at settlement, Mr Curtis said.
As well, while Bensons is still developing in its home state of Victoria, foreign buyers there are facing a heavier tax burden on property purchases.
Earlier this year, Victoria moved to limit stamp duty concession on off-the-plan purchases to genuine home buyer, excluding investors.
As well, the state has introduced a 1 per cent new tax on residential homes left vacant. Adding to the costs, a stamp duty surcharge on foreign buyers of residential property has been lifted to 7 per cent from 3 per cent. In Queensland, the surcharge remains at 3 per cent, while in NSW the surcharge has risen to 8 per cent.
“You add it up and say Victoria is just not as competitive as it used to be,” Mr Curtis said.
The Chevron Island development will be launched at the end of the year, taking advantage of the traditional buying period on the Gold Coast at the start of 2018.
The selling season will be improved, according to Mr Curtis, by the Commonwealth Games next April, which will bring in more potential buyers and see a flow-on effect from associated infrastructure.
“We looked at Brisbane a few years ago and weren’t convinced. We’ve been looking at the Surfers Paradise area for some time,” he said.
“Right now we think the Gold Coast and Surfers Paradise is a much better prospect than Brisbane, which is why we are buying there, not in Brisbane.
“The Gold Coast goes in cycles. It’s coming back.”