By Herron Todd White
May 2019

Sunshine Coast Property Updates

The Sunshine Coast has been growing significantly over recent years. The major infrastructure projects under construction, high standard of education and health care not to mention the amazing geographical diversity are all factors helping to attract people to one of the fastest growing regions in Australia. When we look at the land estates on offer we note that they are quite diverse. There is a wide range of product type and the rise of small lot housing is assisting with affordability. The breakdown of sizes for new vacant residential allotments sold is below. It shows that lot sizes are ranging from sub-300 square metre allotments up to large lots from 1,200 to 2,400 square metres. Sales specifically of sub-300 square metres have emerged from almost nothing ten years ago to account for 26 per cent of all new allotment sales in 2018. Sub-300 square metre allotment sales have also contributed to sales of new allotments of less than 450 square metres growing to over. 60 per cent of all new allotments sold during 2018. These changes are reflected in the average size of new vacant residential allotments sold reducing from 769 square metres in 1998 to 455 square metres in 2018.

There are a number of estates that cater for small lots with the main options being Aura by Stockland and Harmony by Avid. Aura is Australia’s largest master planned community in single ownership and is part of the Queensland government’s priority development area scheme. Upon completion it will provide housing for 50,000 people and will have created 20,000 jobs. Lot sizes generally range from circa 70 square metres to a maximum of 600 square metres with building rates per metre range between $1,100 and $1,800 depending on the size and construction style. For sub-100 square metre lots, house and land packages can be as little as low $300,000. These estates are located a little way inland off the coast but still east of the Bruce Highway.

When trying to find more land of old traditional sized 700 square metre lots, west of the highway in and around the hinterland townships is your best bet. The bulk of this supply comes from the smaller in fill subdivisions. Depending on where you are located, this type of lot tends to be positioned around $250,000 to $300,000 with four-bedroom, two-bathroom low set house and land packages being around the $550,000 to $600,000 mark. A number of these larger lots are being targeted towards dual occupancy investment grade product.

Up to the end of 2018, values for this estate product had been performing pretty well, however with the recent slowing in the southern Sydney and Melbourne markets, the effects of the Royal Commission into Banking and now the looming federal election, we have begun to see a slowing. In some estates there appears to have been an increase in supply with agents advising that there are fewer buyers in the market are these are more hesitant to pay full asking price.

Speak with a Sunshine Coast Mortgage Broker today.

Darling Downs/Toowoomba Property Updates

The majority of new estates are concentrated in the western suburbs of Toowoomba, including Glenvale, Harristown, Torrington and Cotswold Hills and satellite suburbs including Highfields and Kleinton to the north and Westbrook, Wyreema and Cambooya to the south, however the most popular location based on rate of sale and price point is Kearneys Spring and infill estates within the established south Toowoomba suburb of Middle Ridge.

Traditional lots generally range from circa $150,000 to $200,000, however in Kearneys Spring and Middle Ridge, the price point shifts to circa $200,000 to $300,000, with larger lots in desirable locations achieving above this level.

Typical building costs for standard new homes in Toowoomba range from $1,000 to $1,200 per square metre plus site improvements, with higher spec dwellings up to $1,500 per square metre and beyond. Architecturally-designed, prestige dwellings can cost $2,000 to $3,000 per square metre plus site improvements.

Costs often vary by soil type, with some western areas with E class soils requiring additional foundation costs, while the volcanic red soils in the established urban areas and northern satellite suburbs often reflecting M-H class soils which provide a more favourable building platform and suit standard foundations.

Across Toowoomba and indeed the broader Darling Downs, land + build does not always equal value. Buyers appear to be willing to pay a new home premium, which in some locations can disappear once the keys are handed over, much like the new car premium which evaporates once the car is driven out of the showroom. This phenomenon is more likely to occur in less desirable locations and in smaller rural and regional markets and is less likely to be experienced in larger established areas with a good depth of market demand.

Owners are prepared to pay a premium price to build their own home as this gives them flexibility to personalise their investment. Buyers of completed new or near new homes are unable to influence dwelling features such as size, layout, aspect, kitchen and bathroom style and appliances. Accordingly, there can be some resistance in the market place to this product.

Speak with a Toowoomba Mortgage Broker today.

Townsville Property Updates

The trend in new dwelling approvals in Townsville has been consistently declining since the middle of 2017, trailing away to historic low levels since records began in 1991. As at December 2018, the trend number of new houses being approved each month had reduced to just 26.

The trend in new dwelling approvals in Townsville has been consistently declining since the middle of 2017, trailing away to historic low levels since records began in 1991. As at December 2018, the trend number of new houses being approved each month had reduced to just 26.

This slow rate of new housing approvals is reflected in the vacant land market that has seen the number of lots being sold and settled by developers slow to a trickle. As at December 2018, the trend number of land sales per month was just 11, which represents a whopping 84.7 per cent reduction in the trend volume of sales over the five year period since April 2013.

There is currently a variety of land sizes available in locations across the Townsville region with entry level pricing from low $100,000 for a small lot. Building costs range depending on size and quality of fitout with a typical first home buyer entry product including land generally priced from the mid to high $300,000s. Second home buyers are typically in the $450,000 to $500,000 price bracket for entry level product including land.

Demand and confidence in the new housing sector is currently very slow with no drivers in sight to halt this slowdown. With the median sale price in the residential market soft, the economics of building a new home versus buying an established home is proving difficult in some cases to stack up.

Speak with a Townsville Mortgage Broker today.

Rockhampton Property Updates

The Rockhampton and Capricorn Coast area offers numerous options when it comes to vacant land availability. In recent times, sales have slowed around Rockhampton, whilst the Capricorn Coast has been more buoyant, albeit steady as she goes.

Rockhampton’s land stocks are starting to languish with the ever-popular Forest Park only having minimal blocks left. Further developments are now on the northern fringes growth corridor. Land parcel sizes vary in these estates with allotments from around 400 square metres up to around 4,000 square metres plus in rural residential estates.

The smaller 400 square metre lots are generally on offer to first home buyers and are mostly sold as house and land packages with overall packages starting from around the $350,000 mark. Creeping up to 600 square metres in size, prices generally start around the $150,000 mark and go up from there depending upon the size, shape and topography of the allotment. For larger residential allotments, prices generally start around $175,000 and get up over $200,000 for larger allotments over 1,000 square metre.

The Capricorn Coast has numerous estates currently developed and being developed, offering a wide range of options for a purchaser. With the various options, there’s also a variance in price range with some land as low as $140,000 for a general sized allotment of around 650 square metres up to a price range of $180,000 for larger allotments. The lower priced allotments may vary in topography and may have higher building costs for sloping allotments. There are a number of estates that have allotments available in the $180,000 price bracket with some estates offering retained, near level land with restricted distant ocean views reasonably close to major amenities.

Construction prices are pretty similar across the Rockhampton and Capricorn Coast area. Most estates are offering reasonably flat land to build upon which helps keeps costs consistent. Most average homes constructed in this region consist of three or four bedrooms, two bathrooms and double lock-up garage with a small to average sized covered outdoor area. Costs generally range between $1,250 to $1,450 per square metre for the main living area of the property depending upon the quality and inclusions. Sloping blocks and more unique designs tend to be above this range. These costs in most instances cover a turn-key build (i.e include construction, landscaping, fencing, driveway and paths).

Construction of new homes has been relatively slow in the Rockhampton area and moderate in the Capricorn Coast region. It has been evident over the past few years that in some instances, construction values (land plus construction cost) have not always been met. There have been many instances where resales of modern homes (two to seven years old) have occurred for between 10 and 30 per cent below replacement cost depending on the location, estate and condition of the home. Finance for the purchase of these existing homes however can be a challenge, especially for first home buyers as the first home owners grant does not apply to them. As we have seen a more positive outlook of late we would envisage that this may not be as prevalent going forward.

Speak with a Rockhampton Mortgage Broker today.

Gladstone Property Updates

For approximately six years after the peak of the market in Gladstone, building a new home was pretty much a no go zone. The fact that you could purchase a near new (up to about eight year old) home for between about $50,000 and $200,000 less than building a new home of exactly the same size and style was pretty much a no brainer. However, things started to change in 2018 and have continued in 2019. Now that the market has bottomed and stabilised, the value gap between existing modern homes and newly constructed homes has shrunk. Make no mistake, there is still a gap, however it is getting easier to support new builds and that is evident across Gladstone by the upward trend in construction activity.

There are various patches of vacant land available in the Gladstone region. There’s still an abundance of small lots which typically are very difficult to get across the line. There are two recent sales of roughly 300 square metre lots in New Auckland for approximately $30,000 each. Unfortunately, most small lots (sub-500 square metres) are not priced appropriately and are therefore not selling. These small lots were originally targeted at investors during the boom, but investors building new homes in Gladstone are virtually non-existent due to the low returns currently available. These small lots are now targeted toward first home buyers or those on tighter budgets

Average size lots of 600 to 800 square metres range between about $100,000 up to about $150,000 and can vary widely based on location, slope, contour and views available. Most lots above 800 square metres are single infill lots in established suburbs. New lots in the rebranded Jabiru estate in Glen Eden are mostly above 1,000 square metres in size and start in price at around $110,000. These larger lots are again very dependent on location and are worth up to around the low $200,000s.

As noted above, most lots in existing estates are small and demand for these is thin. There are few lots above 600 square metres in size in estates in Gladstone. There are some stocks in larger estates but to date, developers have been reluctant to meet the market in terms of price and therefore sales rates are extremely low. As the market improves and prices rise further, we can expect these estates to start filtering through new lots to meet demand.

There are about half a dozen mainstream builders in town that do most of the new builds in Gladstone. They range in quality and therefore price. Most building rates currently sit between $1,350 and $1,500 per square metre. A new build at $1,350 per square metre for the main living area will typically comprise an average quality, on ground, brick, four-bedroom, two-bathroom, double garage dwelling with features including laminate bench tops, standard appliances, 2.4 metre ceilings and air conditioning to the main bedroom and living area. As the rate per square metre increases, the features and quality of the dwelling typically improve to include ducted air conditioning, high or raked ceilings, stone bench tops and higher quality tapware and appliances. Most new builds also include allowances for a driveway, fencing and turfing or landscaping in order to comply with building covenants in modern estates. It’s with these ancillary improvements that the gap between new and established comes further into play. It typically costs between $5,000 and $10,000 to fully turf an approximately 600 square metre yard. Fencing costs have also increased and can cost up to $10,000 to fully fence a 600 square metre lot. These items typically increase the property’s marketability and presentation, however the full cost does not equal the added value to the dwelling.

Mackay Property Updates

The Mackay market has continued its improved momentum in 2019, with good sales volumes and shortening listing times and slight increases in value. This improved momentum has also included the new home market, with increased builder activity and construction across Mackay. This increase in construction has occurred at all price points across most new estates.

Local builders had a very difficult time during the downturn in the Mackay market. Values fell anywhere between 20 and 30 per cent between 2013 and 2017, with building costs rising during these periods. Resales of two to five year old dwellings were often selling well below replacement cost.

Dwelling approvals eased considerably during these years from a high in 2012/2013 of 1,806 or 151 per month to a low in 2016/2017 of 204, or 17 per month. Latest figures for 2018/2019 year to date are at 223 (as at 28 February) or 28 per month and highlight the recovery and improved sentiment in new house construction.

Entry level house and land packages can be purchased for around the mid to high $300,000 mark. These are generally small three-bedroom, two-bathroom dwellings with build costs around the $200,000 to $250,000 mark and built on land under 500 square metres which can vary from low to mid $100,000s.

The mid-point, which appears to be the most popular, is for medium sized four-bedroom, twobathroom dwellings with double lock up garage located in a number of estates on both sides of the river. They usually consist of a total house area of between 180 and 200 square metres and are full turn-key at around the mid $400,000s give or take $20,000. Construction costs are between $250,000 and $300,000 depending on fit out. Land sizes are around the 600 square metre mark and can be purchased between $160,000 and $190,000.

If you prefer to go big, then larger 750 to 900 square metre allotments can be purchased for just over $200,000 to $250,000, with build cost of large executive style homes (over 250 square metres in total area) starting at around $350,000 and higher depending on fitout. The total house and land cost of this style of property is around $550,000 to $600,000.

Speak with a Mackay Mortgage Broker today.

Hervey Bay Property Updates

Residential lots continue to be developed across Hervey Bay with in excess of ten larger scale estates currently offering lots. In addition, there has been an increase in the number of infill developments of less than ten lots developed over the past two years due to a change in planning scheme zonings in 2014.

With the high number of estates, there is a risk of oversupply however developers currently seem to be managing stock levels to ensure values do not diminish. Values have shown a slight increase from two to three years ago. Most estates are offering lot sizes from 450 square metres up to 900 square metres. Pricing can range from $135,000 up to $195,000 depending on location. Lot pricing appears to be accepted by the market, however be wary of some estates that blanket-price the lots, meaning they have the same price no matter what size. These situations can see the larger lots sell first and the smaller lots remain on the market for extended periods.

Owner-occupiers and investors are currently active in our market.

Some estates only offer house and land package deals with pricing from $330,000 up to $380,000 turn-key. Most homes generally comprise four bedrooms, two bathrooms with a double garage under main roof. There are a large number of builders in town from project packages to the more executive style homes. Display homes are found throughout Hervey Bay with the most recent concentration of display homes being situated in The Springs at Nikenbah.

Those that do opt for a building contract separate to a land purchase should shop around as pricing can be broad. General rates range from $1,000 to $1,350 per square metre of main area for homes from 125 to 165 square metres of main area plus garage and covered outdoor areas with average quality finish. Larger, more executive style homes can cost up to $1,500 per square metre however, of late, larger homes seem to be showing a slightly lower rate with some as low as $1,200 per square metre.

There appears to be a premium paid for new housing across Hervey Bay which is not achievable for older established homes. We understand some builders are offering incentives not disclosed in the contract which can negatively impact market sentiment and market value upon resale within these particular estates. Given the current level of supply and number of lots available to be developed in the pipeline, there is a heightened risk that in some cases, total package prices may not be achievable upon resale. On the flip side, rental vacancies continue to be very low with strong demand. Rental rates can range from $360 to $400 per week for new homes within these estates, realising a gross return in the vicinity of five per cent.

Speak with a Hervey Bay Mortgage Broker today.

Emerald Property Updates

The Emerald residential market continues to slowly firm.

Vacant land is limited but so is demand with Maranda Heights holding the majority of vacant lots in town ranging from 600 to 1,000 square metres and selling from $85,000 to $114,000. These lots were selling as low as $65,000 only eighteen months ago. Council also holds a large parcel of vacant lots and rumour has it they may test the market soon with some of those. Otherwise a few vacant lots belonging to the government in the old parts of town have firmed over the past twelve months from $30,000 up to $60,000. There is a steady but small demand for new housing with most building rates sitting between $1,300 and $1,400 per square metre. We are also seeing modern homes under seven years of age selling at near replacement cost at present. If they’re in a good location, well established and include a shed or pool, we are seeing them sell for prices about 10 to 15 per cent off the values achieved in the last boom in 2011/2012. We are yet to see a pickup in non-local investors but as rents and values continue to firm and positive resource sector activity continues, it is only a matter of time.

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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.