By Herron Todd White
A generous amount of vacant land has been offered to the ACT market over the past three years, owing to various new housing estates and the Mr Fluffy buyback scheme. Green fill land releases have been sold in the Gungahlin and Belconnen areas with Moncrieff, Throsby, Taylor and two new subdivisions in the Holt area. Price points for these new sites are usually around $800 to $1,000 per square metre of land.
The Mr Fluffy buyback scheme resulted in the knockdown of many established houses in the established suburbs of Canberra. This created the opportunity for the market to purchase and develop vacant blocks in older parts of the city. These blocks are being purchased by developers looking to develop and split units, or owner-occupiers and investors looking to build houses to occupy or rent. These blocks are located in multiple suburbs all around Canberra, so price points vary based on location and block size.
Land values over the past three years have been strong but appear to have flattened in the past six to twelve months, which is to be expected given the change in lending environment and the long period of growth.
Build rates are pretty similar across the ACT, but are slightly higher in the prestige and inner city areas. Standard build rates in suburban locations are generally between $1,650 and $2,500 per square metre based on the quality of build, inclusions and size of the build. Prestige and high-end build rates are often around $3,000 per square metre and sometimes as high as $4,000 per square metre.
The cost of the land and build adds up to the value on completion for the majority of the valuations we undertake. There are occasional cases of over capitalisation, usually when the owner decides to pay extra for specialised or over-the-top inclusions that the general market would not pay for, or where the land value is significantly lower than the build cost. Values are holding up for most new, vanilla constructions with a reasonably even break up between land and construction cost.
Speak with a Canberra Mortgage Broker today.
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