Increasing occupancies and a shortage of supply is resulting in property price growth in the Whitsundays region in Queensland, as apartment owners reap the rewards of the exponential growth in the region's tourism sector.
In his latest analysis of the Airlie Beach apartment market, independent property analyst Michael Matusik has found apartment prices have jumped 18% in the last financial year.
This represents the third consecutive year of double digit price growth, making Airlie Beach one of the best performing apartment markets in Australia.
Mr Matusik's report states that occupancy rates in the Whitsundays are now the highest of any region in the state of Queensland, and are forecast to jump from 60.6% to 71.4% in the current financial year.
The growth of the region's tourism industry, and the finite future development potential for Airlie Beach in particular, is driving apartment supply levels to record lows.
Mr Matusik said that supply levels of new apartments in Airlie Beach are at critically low levels. Strong recent take-up rates and continued demand for property in the region has resulted in only seven months of remaining supply.
The research covers new apartments in projects either currently under construction or that have achieved sufficient pre-sales requirements to proceed.
"The exponential growth of Airlie Beach and the area's topographical restrictions which limit the potential for future development certainly add weight to continued price growth in what is a very under supplied sector," said Mr Matusik.
"Our research into the Airlie Beach market showed average annual increases for apartments of between 16 and 18% per annum over the last three years, with as high as 24.7% being achieved in some of the newer projects," he said.
"While some other parts of Australia are experiencing a softening in prices, we believe Airlie Beach will defy this trend."
Mr Matusik pointed to the greater accessibility of Airlie Beach to Sydney and Melbourne markets, created by a four-fold increase in flights into the Whitsundays region over the last few years, as a key to the continued growth of the apartment market.
"The growth of the tourism industry in the Whitsundays region and the increased number of flights has really opened the region up to the rest of Australia," Mr Matusik said.
The research shows that investors dominate sales in Airlie Beach, comprising nearly two thirds of settled apartment purchases in the 2004/05 financial year.
"Nearly two thirds of the expected population growth in the Whitsunday Shire over the next five years is expected to be people aged over 50," Mr Matusik said.
"This provides a platform to produce more alternative residential product to target this market. By this we mean a move away from detached housing toward apartment and townhouse product," he added.
