New $15,000 construction grant to spur on recovery of Ipswich property market: PRDnationwide

The new and existing house markets of Ipswich and Yamanto on Brisbane’s fringe are expected to benefit directly and indirectly from the recently introduced new $15,000 first-home owners construction grant (FHOCG), according to new research from PRDnationwide.

The property group has released reports on the Ipswich and Yamanto property markets and forecasts that both will benefit from an “influx of young budget-conscious buyers since the introduction of the FHOCG on September 21".

The grant applies to new property bought or built at a value under $750,000.

Ipswich is 40 kilometres west of Brisbane and considered part of the greater Brisbane metropolitan area, while the adjoining Yamanto local area comprises the suburbs of Raceview, Flinders View and Yamanto.

As the chart below shows, Ipswich house sales are starting to trend up following a number years of declining sales.

Click to enlarge

According to the PRDnationwide Ipswich report, a combination of the FHOCG and the reinstatement of transfer duty concessions “provide an exceptional saving for first home buyers who are considering building”.

First-home buyers pay no stamp duty on land valued up to $400,000, an additional saving of $5,520.

“The availability of competitively priced house and land offerings in the immediate area is likely to be the key draw card to buying new," say PRDnationwide research analyst and Ipswich report author Robert Matta.

“Already developers are noting an increase in buyer enquiry and have been successfully unloading old stock to bring forward mooted stages in their estates. It is expected that volumes will trend upwards on the back of this new incentive at least for the short term.” 

There is also an expectation among local property analysts of a flow-on effect to the existing house markets as sellers are forced to discount properties in order to compete with developers.

PRDnationwide Ipswich principal Peter Mendoza says activity is trending upwards.

“Sales are up 25% on last year,” he says.

“Over the past few years a lot of people put things on hold but we get the feeling there’s a lot more confidence in the market now and people are starting to list and sell.”

According to PRDnationwide research, 30% of total sales in the Ipswich area occurred in the sub-$250,000 price range in the 12 months to June 2012, compared with 15% in the June 2010 period.

The median Ipswich house price sits at $293,000, which is 35% cheaper than compared with inner Brisbane.

“This is a major draw card even for those who work in the Brisbane CBD or surrounds,” he says.

PRDnationwide also highlights census population data, which shows that the Ipswich municipality has demonstrated the highest average annual population growth rate (3.9%) from 2006 to 2011 across the south-east Queensland region.

In Yamanto, the volume of house sales is up 22.7% over the past 12 months to June 2012.

However, house prices have fallen 4.6% over this period to a median of $310,000, with Yamanto following the trend of the wider Ipswich municipality, with the correction to prices improving buying conditions. 

Activity in the Yamanto Aarea vacant land market has also turned a corner to register 40 settled transactions during the June 2012 period, almost double the number recorded during the June 2011 period.

Land prices were down 12.7% to $165,000 for the June 2012 period.

“In the Yamanto, Flinders View and Raceview region we are experiencing a lift in enquiry for established houses,” says PRDnationwide Yamanto principal Roger Muller.

“There are great buys out there in all styles of homes. More listing are needed to supply buyer’s varying requirements.

“With good land prices, some buyers are opting for house and land packages.”

Rental properties are also in high demand, he says, because of good returns on offer.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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