House and land packages need to offer more variety to appeal to buyers
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 and apartments that.
So are land sales heading north? In what direction are land prices going? Have house and land package prices increased? What about lot sizes – are they still shrinking?
Sales volumes
For the most part, vacant land sales and the sale of house and 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 in Mackay, Whitsundays, Central Highlands, Townsville and Gladstone.
Land sales have increased in Cairns, Sunshine Coast, Redlands and 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 and land product – on free-hold title – are taking sales away from the apartment and townhouse markets in Cairns.
Since the federal election, land sales have improved, so too the sale of new house and 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 values
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 and to cater for the more traditional townhouse/apartment tenant. The average lot size in Cairns is now 600 square metres. The typical new house and 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 and 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 square metre to buy residential dirt, and yet, whilst overall land prices dropped about 7% last year, the rate per square metre increased by about $50.
Land values rose in Mackay, Issac (Clermont, Dysart and Moranbah) – in fact up by 17% or $21,000 to $145,000 for a 600 square metre allotment, in Rockhampton, on the Gold Coast (wow, now you are rocking the boat), in Logan, Toowoomba and across the Western and Southern Downs (Dalby, Warwick etc.)
Article continues on next page. Please click below.
More statistics
The most expensive allotments for sale are in Brisbane ($295,000 per allotment), followed by Redlands ($264,000), Gold Coast ($240,000) and 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 and land packages (being three or four bedrooms; two bathrooms and double garage – usually sized between 200 and 250 square metres) 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 10 locales having a median land value under $150,000. Nearly all Queensland municipalities have new house and land packages available under $400,000, some of which are located in South East Queensland and 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 square metres in Brisbane to 1,714 square metres in the Scenic Rim (old Beaudesert Shire). Gone are the days of the traditional 800 square metres allotment. Only four Queensland municipalities have a wide choice of vacant land over 800 square metres.
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 and 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.
Two suggestions
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 and the clustering of smaller allotments around parks and the like and 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 and 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%, 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 and Redlands, 13% in Hervey Bay and 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 and immediate housing solutions. The traditional house building process has diminishing buyer appeal.
Michael Matusik is the founder of Matusik Property Insights, which has helped over 550 new residential projects come to fruition. Read Michael’s Blog or follow him on Facebook and Twitter or connect via LinkedIn.