- November 21, 2013
- Posted by: admin
- Category: Budget, Enconomy, Finance News, Financial goals, House prices, Stamp Duty, Wealth
So what is happening with vacant land sales across urban Queensland? You don’t read a lot about the land market these days – it’ all houses this & apartments that.
So are land sales heading north? In what direction are land prices going? Have house & land package prices increased? What about lot sizes – are they still shrinking?
For the most part, vacant land sales and the sale of house/land packages across Queensland continue to trade at volumes less than the year before.
The biggest falls over the past year have been seen – not surprisingly – across regional Queensland.
The most notable falls in land sales were recorded Mackay; Whitsundays; Central Highlands; Townsville & Gladstone.
Land sales have increased in Cairns; Sunshine Coast; Redlands & in Brisbane.
Cairns sales are up because of insurance hikes due to recent weather events, which have increased the cost of body corporate fees. New house & land product – on free-hold title – are taking sales away from the apartment & townhouse markets in Cairns.
Since the federal election, land sales have improved, so too the sale of new house/land packages, but across most Queensland markets, this recent lift in sales is still below the volumes traded in recent years. Things are improving. But it will take a consistent lift in sale volumes to get back to longer term averages.
Land value movement across the state results in a somewhat mixed bag.
For example, Cairns land prices have dropped by $77 each week or down $4,000 compared to last year. Most vacant land is priced around $169,000 in Cairns. The reason for the drop is because land size has decreased, along with the size of the actual new house being supplied. This is to help capture the townhouse investment market & to cater for the more traditional townhouse/apartment tenant. The average lot size in Cairns is now 600 sqm. The typical new house & land package costs $385,000, down $14,000 or $270 per week on last year.
Land values have also fallen in Gladstone; in and around Hervey Bay; on the Sunshine Coast; Gympie; in Brisbane & the Whitsundays.
Average lot sizes have shrunk in most locations; so whilst the overall land price has fallen, the rate per square metre of the land sold continues to rise. For example, in Brisbane it typically costs about $700 per sqm to buy residential dirt, and yet, whilst overall land prices dropped about 7% last year, the rate per sqm increased by about $50.
Land values rose in Mackay; Issac (Clermont; Dysart & Moranbah) – in fact up by 17% or $21,000 to $145,000 for a 600 sqm allotment; in Rockhampton; on the Gold Coast (wow, now you are rocking the boat); in Logan; Toowoomba and across the Western & Southern Downs (Dalby, Warwick etc.)
The most expensive allotments for sale are in Brisbane ($295,000 per allotment); followed by Redlands ($264,000); Gold Coast ($240,000) & the Sunshine Coast ($235,000).
The cheapest dirt is around Warwick ($110,000); then Gympie ($119,000); Lockyer Valley (Gatton/Laidley) ($130,000) and Bundaberg ($144,000).
Typical new house & land packages (being three or four bedrooms; two bathrooms & double garage – usually sized between 200 & 250 sqm) range from $545,000 in Brisbane to $235,000 in Gympie.
17 out of Queensland’s 25 larger urban municipalities have land typically priced under $200,000, with ten locales having a median land value under $150,000. Nearly all Queensland municipalities have new house & land packages available under $400,000, some of which are located in SEQ & in key regional markets.
New housing of this nature isn’t unaffordable in Queensland.
Finally, the typical allotment across urban Queensland ranges in size from 424 sqm in Brisbane to 1,714 sqm in the Scenic Rim (old Beaudesert Shire). Gone are the days of the traditional 800 sqm allotment. Only four Queensland municipalities have a wide choice of vacant land over 800 sqm.
All locations, except the Scenic Rim, have seen allotment sizes fall in recent years. Some have fallen by up to a third in size over the past five years. Higher taxes & charges, plus centralised control of the subdividable land stock by a handful of major developers are behind this trend. There is a demand for more convenient lot sizes, but this demand is highest in more central locations.
I believe the Queensland land-based market would be stronger (i.e. more sales) if there was more variety on the market. Importantly, this includes an increase in lot sizes; wider frontages & the clustering of smaller allotments around parks and the like & away from larger homes/bigger allotments. In other words, less salt’n’peppering of small lots through an estate.
Our polling suggests that potential buyers are put off by the mixture of housing lots throughout the estate.
Another thing which would help make more sales would be for more turn-key product on the market. A turn-key property is one which is complete & ready to move into on completion. Everything, except furniture, is installed.
Whilst there has been a lift in the proportion of turn-key sales across the state – with one in ten land-based sales being turn-key in nature last year (up from 8 per cent, three years before – this trend is largely confined to the south east corner of the state. The proportion of turn-key sales in Brisbane is 30%; 18% in Logan; 15% on the Gold Coast & Redlands; 13% in Hervey Bay & 11% in the Moreton Bay area, north of Brisbane.
Outside of Cairns – 11% – the regionals are not offering as much turn-key options to buyers as maybe they should. In today’s world, buyers are looking for convenient & immediate housing solutions. The traditional house building process has diminishing buyer appeal.