By Herron Todd White
One of Brisbane’s great boasts as a capital (and let’s face it, there’s plenty to boast about) is there’s an abundance of land available within a very commutable distance of our CBD.
This ease of supply coupled with affordable pricing is a primary driver for the new Queenslanders coming up from down south. A very bearable drive on major roadways will get you a quick trip into town on the weekdays and award-winning beaches on the weekends.
Yes, there’s plenty of dirt providing a blank canvas for your dream build, but is it wise to take on a construction project when there’s plenty of established housing already on offer at reasonable prices?
While your own circumstances will dictate what’s best in terms of property purchases, here’s our locational guide on land + build throughout the Brisbane region
Inner City Property Updates
Not surprisingly, vacant land in inner city addresses is relatively expensive due to limited supply and higher demand compared to outer suburbs, and many buyers seem keen to create a twist when it comes to vacant land too, with splitter blocks being all the rage
A great suburban example is Camp Hill in the city’s south.
Camp Hill has seen a surge of buyers looking to knock down post-war dwellings on large lots, split the land and sell off the resultant blocks individually.
That said, the price of vacant allotments is beginning to soften after a value peak around mid-2018. Camp Hill vacant lots range from $550,000 to $750,000 for a 405 square metre site with no major views. In contrast, a 607 square metre lot with a demolishable house will sell for between $675,000 and $750,000. Properties that can be split are limited to a small number of allotments which most local agents know about. As such, they achieve a premium in this very competitive area.
Owners will usually spend around $550,000 to build a home in Camp Hill, but that’s exclusive of landscaping or a pool, both of which will be required if an end value above $1.2 million is expected. We are also seeing a push toward Hamptons design, which can be a simple descriptor for a monochromatic house with a gabled roof.
Construction costs in Camp Hill for owner-occupier product run at around $2,500 per square metre of living area, with the per square metre rate of the garage running at about 75 per cent of this. Investor-grade product reflects $1,400 per square metre for the living area with the same discount applied for the garage.
Approximately ten months ago, a $600,000 construction on a 405 square metre allotment would reflect an end sale price of $1.4 million. Changes in market conditions since have seen this outcome reduce somewhat to now reflect a price around the low $1.3 million mark.
Buyers who have been pushed away from Bulimba, Balmoral and Hawthorn by higher prices are driving demand for good quality houses on 405 square metre allotments in Camp Hill.
A great example is 40 Brisbane Avenue, Camp Hill which sold for $1.805 million in April 2018. This dwelling was a high-quality build that ticked all of the boxes. It illustrates the level of demand for high-end product compared to a circa 2005 build reproduction Queenslander across the road at 37 Brisbane Avenue, Camp Hill which was a little tired and had no pool. It sold for $985,000 in November 2018.
Western corridor Property Updates
Our western corridor, out to and surrounding Ipswich, has become a major growth zone in southeast Queensland.
Stimulated by the establishment of Forest Lake and Springfield (the precursor to Springfield Lakes), there’s also been moves afoot in Ripley Valley to produce more land.
In general, western corridor estates provide typically investor-grade product with the cheapest allotments being around the $170,000 ($453 per square metre) to $180,000 ($480 per square metre) for 375 square metre sites in Redbank Plains.
Bellbird Park reflects land priced at around $200,000 ($533 per square metre) to $220,000 ($586 per square metre) for 375 square metre allotments. Springfield Lakes, Brookwater and Springfield have a range of $220,000 ($586 per square metre) to $250,000 ($667 per square metre) for 375 square metre allotments.
Of note is that land sizes are beginning to shrink. This is designed to help developers maintain acceptable profit margins while keeping the end product price reasonable for buyers.
Land contracts in estates being marketed toward owner-occupiers are stacking up pretty well on valuation. These estates often have better amenity such as shops or green spaces.
In developments pitched more toward investors, contract prices for land + build can be a little shakier on valuation.
Lowset brick and tile or Colorbond dwellings will run at a construction cost of around $1,200 per square metre for an investor-grade product with a rate of $800 per square metre for the garage space and $600 per square metre for the outdoor area. In addition, the majority of building contracts do not include landscaping or window coverings.
In most cases, we’ve found building contracts have become more expensive over the past twelve months despite limited evidence supporting an increase in as if complete values.
It’s becoming increasingly difficult to support the cost of land plus construction as equal to or above the end value of the completed property. Competition is coming from second-hand property within each development that’s comparable in accommodation and utility, but is trading between private sellers at $30,000 to $40,000 cheaper than new stock. In addition, many of the older homes are substantially larger than new homes, making them an attractive option for buyers.
Northern corridor Property Updates
Brisbane’s northern corridor includes multiple estates with a variety of allotments and housing types on offer.
Newport estate in Newport.
Vacant land sales range from $300,000 for 350 square metres to approximately $385,000 for 500 square metres, although many lots are smaller than 425 square metres.
Sites in this estate achieve a premium compared to vacant land in surrounding suburbs.
The entry-level price for new housing is circa $550,000 to $625,000, with higher quality dwellings commanding up to $750,000.
As this estate is still in its infancy, having not yet garnered local market momentum, there are a limited number of resales, which creates higher volatility in sale price ranges.
Build rates for new homes range from $1,200 per square metre for investor-grade product to $1,800 per square metre for higher quality, owner-occupier dwellings.
Capestone Estate in Mango Hill
Vacant land sees sales range from $220,000 for 280 square metres to $300,000 for a 450 square metre site, to $375,000 for 600 square metres. We note that many newly-created lots are smaller in size than they were in earlier stages, with most having an area of 450 square metres or smaller.
The estate is around five years old and investorgrade housing is priced at $425,000 to $500,000. If priced above this, expect to see larger homes with higher quality finishes.
The estate has gained increased demand from local buyers, with many residents moving from North Lakes. Capestone has achieved sale prices of circa $850,000 for high-quality homes on 700 plus square metre lots.
Build rates for new homes range from $1,100 per square metre for investor-grade product to $1,400 for a higher quality, owner-occupier dwelling.
There is a high percentage of investor-standard product for sale in this estate and properties listed at sub-$500,000 are taking longer to sell.
Griffin’s vacant land prices range from $230,000 for 300 square metres to $300,000 for 500 square metres.
Build rates for new homes range from $1,100 per square metre of living area for investor-grade product to approximately $1,400 for a higher quality owner-occupier dwelling.
Entry-level homes start at around $400,000 and there are opportunities to purchase second-hand dwellings at below replacement cost in the area.
Investors are mostly active in the small lot size and new construction market whereas owner-occupiers are drawn toward second-hand stock offering a little more space and less chance of the “new car” premium.
Of note in Griffin is a large number of dual occupancy dwellings being constructed. These mostly appeal to cash-flow oriented investors. It will be interesting to monitor the price and volume of resales achieved in dual occupancy properties over the next few years.
North Harbour in Burpengary East
North Harbour has vacant land at $235,000 for 450 square metres and $300,000 for 600 square metre blocks.
Entry-level homes are priced at around $430,000 to $480,000 for a new product, which is an appealing price point for investors and first homeowners.
For owner-occupier stock, properties are realising $480,000 to $600,000 with many of these purchasers upsizing into their new home.
House construction costs run from $1,200 per square metre for investor-grade stock through to $1,400 per square metre for owner-occupiers.
Other suburban projects
In Narangbah and Burpengary, vacant land is priced around $170,000 for 199 square metre allotments up to $280,000 for 550 square metre blocks, with the majority of new lots being below 500 square metres in area.
Build rates for new homes range from $1,200 per square metre of living area for investor-grade product to $1,400 per square metre of living area for owner-occupier stock.
In comparison to many of the new multi-stage estates in adjoining and nearby suburbs, developments here do tend to attract a higher proportion of owner-occupiers.
The entry-level pricing of new homes starts from $380,000 with many priced up to $500,000. Investors and first home owners are mostly active in this price bracket, while upgrading owner-occupiers purchase homes in the $500,000 to $750,000 price range.
Looking to the suburbs of Caboolture and Morayfield, vacant land starts from $180,000 for 400 square metres and goes up to approximately $230,000 for 750 square metre blocks.
Entry-level new homes are priced from $330,000 to $390,000, with typical owner-occupier properties comprising larger homes and blocks, priced at around $400,000 to $450,000. Build rates for new investor-grade homes sit at approximately $1,100 per square metre of living area, while owner-occupier homes cost around $1.200 per square metre to construct.
Many buyers are taking advantage of the opportunity to purchase second-hand dwellings at below replacement costs in this area. Investors are mostly active in the small lot sizes or new construction markets compared to owner-occupiers who tend to purchase second-hand dwellings on larger lots.
Speak with a Brisbane Mortgage Broker today.
DISCLAIMER: The information contained in this article is correct at the time of publishing and is subject to change. It is intended to be of a general nature only. It has been prepared without taking into account any person’s objectives, financial situation or needs. Before acting on this information, Smartline recommends that you consider whether it is appropriate for your circumstances. Smartline recommends that you seek independent legal, financial, and taxation advice before acting on any information in this article.