By Herron Todd White
North and North West
Seemingly within days of the government announcement of the vacant residential land stimulus package, many of the local estate developers marked their land sale prices up. There was, however, an instant surge in land sales. This appears to have slowed to a steady pace. Most recently, there appears to have been a softening in sale prices if some of the most recently sighted land contracts are any guide.
Sale prices within the new estates of Coomera are reflecting a square metre rate of between (circa) $675 and $775. Generally speaking, most of the land sales reflect levels of five to ten per cent above what the resales evidence reflects.
The majority of build contracts are being analysed as to be within fair and reasonable industry parameters. The building contracts that appear most likely to be at risk and analysed above market parameters are those from the estate developers themselves.
The northern end of the Gold Coast is the growth corridor characterised by large developing estates and new, modern, sprawling suburbs. There are still large pockets of englobo land development opportunity and as yet there is very little in the way of demand for infill development.
There has been a lift in demand for rural residential sites in the more modern estates. Sales have been strong in Maudsland, Mount Nathan and Ormeau with sales of good selectively or cleared allotments selling between say $450,000 and $600,000. Hinterland vacant sites are also selling well. Examples are estates at Woodhill and Tamborine where good circa 4,000 square metre cleared allotments are selling at between say $280,000 and $360,000.
The major factor playing out in the northern Gold Coast is the dire lack of sales listings of established dwellings. Less people are listing their properties, yet demand has been fuelled by low interest rates and other buyer incentives. Agents are reporting that the few listings they do have are typically selling very quickly with multiple offers and in many cases are selling above asking price and at levels higher than 2019 levels. We are speaking to cashed up, ready buyers who are now stressed as they find it difficult to compete for a purchase. This phenomenon appears to be a glitch in the local market as we suspect that the majority of homeowners want stability due to the uncertainty surrounding COVID-19, so are putting off selling at this time. The situation of few sales listings may be contributing to demand for new house-and-land sales.
The northern Gold Coast was hit very hard by the GFC which notably caused a 0.5 per cent national economy retraction with an approximate four year lag from 2007/2008 until the market absolutely bottomed out in 2012. The market that year was driven down by large numbers of lender-forced sales, with many suburbs falling in value as much as 30 to 40 per cent.
Move forward to today, where the economy has retracted 7 per cent coupled with very pessimistic national unemployment and tourism predictions, and what does that bring to our region? Many buyers of house-and-land packages will more than likely do it tough through the next five years or so. Following the steps of the GFC, the majority of owners who can weather a market storm will be those who can maintain their incomes and mortgage obligations. At some point, this market within the Gold Coast region will bounce back as it did after the 2012 crash. Many players in the market are predicting that the Gold Coast property market will be saved by a southern migration. It is definitely interesting times and we all wish we had the benefit of a crystal ball.
Southern Gold Coast and Northern NSW
Vacant land sales across the southern Gold Coast and northern New South Wales area maintained strong results throughout 2020, with very limited new stock available throughout the area.
Some examples of new land subdivisions in the area are seen along Fraser Drive in Tweed Heads South and Terranora with developments such as Fraser Cove and Altitude seeing reasonably steady sales.
Coolangatta will see a unique redevelopment of the site at 199-203 Boundary Street known as Freedom Rainbow Bay, which will comprise 16 freestanding homes. The development has reportedly attracted very strong interest and the developer has stated that it is now sold out.
The final stages of Casuarina known as The Village are already seeing strong re-sale figures with multiple instances of significant increases from initial developer sale prices in 2018 and 2019. Driving factors around the surge in prices stem from interstate migration and the lack of supply of new beach-front stock. Purchasers from our capital cities in particular are still seeing relative value in these areas.
We have heard reports of a recently proposed land subdivision of 17 allotments varying from 557 to 1030 square metres in Cabarita Beach known as Freedom Caba selling out in just hours, as well as reports of strong demand in a new estate in Cudgen known as Kings Coast.
Contributing factors to the continued strong demand in the area may also stem from improved infrastructure. The Tweed Valley Hospital site is cleared and under construction, with government spending increased by another $90 million in March to fast track the development, creating another 800 jobs during the construction stage.
As we progress through this current, strong growth cycle occurring on the southern Gold Coast and in northern New South Wales, we predict an eventual stabilising of prices, however with no evidence to suggest a slow down at the time of writing this article, only time will tell. Again, don’t we wish we had a crystal ball!
Speak with a Gold Coast Mortgage Broker today.
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