The eight biggest property losses on the Gold Coast’s Millionaire’s Row

The Mermaid Beach beachfront attracts the highest prices on the Gold Coast – and thereby attracts the greatest attention in both buoyant and depressed markets.

The latest resale hasn’t had much publicity, but at 56% less than its 2007 pre-global financial crisis sale price, it’s the highest yet recorded luxury price decline.

The 199 Hedges Avenue property has been bought by Parkdon Pty Ltd, a company associated with Avi Silver from Caulfield. The vendor, Max Twigg, also comes from Melbourne.

It cost $17.5 million in 2007 and resold recently at $7.7 million, meaning the price dropped by about $50,000 a week during his four-year ownership.

Another $10 million plus loss on the Gold Coast’s “Millionaires’ Row” was incurred by the internet-billing company high flier Daniel Tzvetkoff, who splashed out $27 million in early 2008 on the unfinished mansion of fallen tourism entrepreneur Tony Smith and his wife, Simone. At its mortgagee sale in 2009 it resold at $17 million to drilling tycoon Peter Mitchell, who was cashed up after selling his business for $150 million. Given the Ipswich-born internet whiz-kid spent $8 million on almost completing construction, Tzvetkoff’s foray actually translated to an $18 million loss.

Many buyers are only prepared to purchase under market value at the moment, according to valuer Herron Todd White.

The company suggests current enquiry for property is steady, with agents noting that vendors must be keen and willing to meet the market.

“As well as a reduction in the volume of sales, prices since the GFC have fallen by anywhere between 35% and 50%, with the most expensive homes generally suffering the greater price drops,” HTW notes.

HTW advised that housing varies from original 1950s beach shacks on single 405-square-metre allotments to luxury mansions built over four to six allotments.

The most recent land content sales have ranged from $4.17 million to $4.25 million.

Quality house sales have been $5 million to $5.5 million on single blocks and $7.7 million for a luxury house on a larger 530-square-metre block of land.

HTW notes sales in Main Beach have also been few and far between, given there are only 15 beachfront house properties in Main Beach and these are generally tightly held.

Beachfront Sales (Mermaid Beach and Main Beach)

* includes under contract sale

Source: Herron Todd White

“There has only been one sale of a 400-square-metre allotment (improved with a one-bedroom cottage) at $3.6 million early this year,” it notes.

Twigg – who made his fortune in waste management – has indicated he did not know that the market in Hedges Avenue properties had been fuelled in the boom by unusual and hidden deals.

The Ray White Australia chairman Brian White recently noted that Hedges Avenue in recent years had been “like a property casino and people were caught up in a frenzy to get in”.

Investigations by the Queensland Office of Fair Trading and police into alleged property price manipulation continue.

Top 8 Mermaid Beach price collapses (compiled by Property Observer)

199 Hedges Avenue, sold in 2011 for $7,700,000, last sold for $17.5 million in 2007, a loss of 56%

247 Hedges Avenue, sold in 2010 for $5 million, last sold for $10.25 million in 2007, a loss of 51%

31 Hedges Avenue, sold in 2011 for $5.4 million, last sold for $11 million in 2008, a loss of 50%

19 Albatross Avenue, sold in 2010 for $6 million, last sold for $11 million in 2008, a loss of 45%

31 Albatross Avenue, sold in 2009 for $5.35 million, last sold in 2008 for $9 million, a loss of 40%

49 Hedges Avenue, sold in 2000 for $9.5 million, last sold in 2008 for $16 million, a loss of 40%

89A Albatross Avenue, sold in 2010 for $6.5 million, last sold in 2006 for $10 million, a loss of 35%

33 Hedges Avenue, sold in 2009 for $17 million, last sold in 2008 for $27 million, a loss of 37%

This article first appeared on Property Observer.