By Herron Todd White
Sunshine Coast Property Update
As mentioned in a previous Month in Review, the continued low numbers of COVID-19 in the community and the various government stimulus packages have all assisted in improving confidence. On the back of this confidence there’s no doubt there’s been a resurgence in the land and construction sector on the coast.
Indications of this resurgence can be seen from the most recent releases in the various estates around the coast. Stockland’s Aura estate and Avid’s Harmony estate have both been recording good volumes of sales with most stages being sold out at or soon after release. This land activity is then transferring into the construction sector where we are seeing a higher volume of construction valuations been ordered.
With the construction grants on offer and the looming deadline before they close, we are seeing some mad scrambling to find land and a number of land re-sales that have shown good growth in values. One example is Olivia Crescent, Nirimba (Aura), 296 square metres, which previously sold in May 2019 for $210,800 and was re-sold for $250,000.
This is even more prevalent as you get closer to the coast. Stockland also operates the Bokarina Beach development along the Kawana Beach areas between Caloundra and Mooloolaba. A recent resale is 30 Singlefin Crescent, Bokarina, 250 square metres, which previously sold in March 2019 for $427,000 and re-sold in July 2020 for $585,500.
We also saw some strong interest in a rare vacant land sale in the beachside area of Buddina near Point Cartwright. The property was located at 22 Lalwinya Street, Buddina and is a 567 square metre lot which went to auction on 5 September and sold under the hammer for $770,000. Considering you can purchase an older style house in the area for under that mark, this would indicate a premium, but really, if you want a clean canvas in a good spot, where else do you go?
Importantly, these increases we are seeing are not only being achieved in the beachside suburbs on the coast. Hinterland estates have also seen increases in demand with a notable increase in values. An example of this is a vacant 700 square metre lot in the hinterland township of Mooloolah Valley which was originally purchased from the developer in May 2020 for $270,000 and was resold only a month later for $292,000.
With the upward pressure on land values, we may see some struggles to support construction valuations with sales of the existing built product. This is something that has occurred in the past but at the moment, with the buoyancy in the market, the value has been there. The question is and has been for a long time, that with all the stimulus around COVID-19, once it stops are the current levels sustainable?
Rockhampton Property Update
Land sales and construction in the Rockhampton region had been increasing up until the COVID-19 pandemic with sales of land and house and land packages in modern estates attracting good numbers, along with the rest of the market. The pandemic, whilst slowing things up for a month or so, is almost non-existent in this region and we have seen a continued trend of land and house-and-land packages being popular. Modern estates in both.
Rockhampton and Yeppoon are proving to be more popular than ever. A number of estates have sold all available stock and also have the majority of lots in the next stages on hold. This includes land that will not be available until early 2021.
Pricing of land in the Rockhampton region is dependent on location, size and the gradient of the allotment. Buyers have a range of choices depending on their budget. Secondary locations generally provide an opportunity to buy a standard house allotment of around 600 square metres for around $100,000. A house-and-land package on these allotments can be around the mid $300,000s. These areas are not seeing the uptake of the more popular estates within Rockhampton and the Capricorn Coast. Pricing in the more popular estates in the Rockhampton region can start at around $150,000 for a smaller allotment of approximately 400 square metres. A house-and-land package for these lots is generally around $400,000. Standard size allotments generally around 700 square metres and above are starting at around the $170,000 mark and depending on size, elevation and views, can fetch up to around the $200,000 mark, with some being early $200,000s. A house-and-land package for a standard size home on a standard size allotment is generally in the mid $400,000s, however can get much higher depending on the buyer’s budget.
Whilst the builder’s grant and first home buyer’s grant have been well received in the area, we see a continuation of the current positive trend into 2021. The Rockhampton and Capricorn Coast regions have a number of ongoing projects that have brought people to the area. Rental vacancy rates are extremely low with rental prices generally increasing. Available stock is also limited for modern homes with agents reporting multiple offers and time on the market very low on well-presented homes. Builders and associated trades are extremely busy and struggling to keep up with demand. With these factors taken into consideration, we believe things should continue to remain positive going into 2021.
Speak with a Rockhampton Mortgage Broker today.
Emerald Property Update
We have not seen any surge in house and land packages in the Central Highlands region apart from Moranbah which is seeing the majority of vacant lots within town being quickly taken up. In the major regional centre of Emerald, construction of new homes has been steady with a marginal increase in demand. With construction costs very high, it appears that people wanting something modern are still prepared to buy an established home of eight years of age with shed and pool at a depreciated rate.
Speak with an Emerald Mortgage Broker today.
Mackay Property Update
The introduction of the government’s stimulus packages designed to promote new home construction has definitely had the desired effect in Mackay. Demand for vacant land has increased significantly, with one large developer on record saying enquiries had increased over 400 per cent. Even blocks that had been on the market for extended periods have been snapped up. Almost all the major estates in Mackay have sold out of existing stock, with the race on now to develop more allotments. The demand has not been limited to any particular estate but has been across the board.
Land prices typically start at the $150,000 to $200,000 mark in most estates, with land sizes ranging from 500 up to about 700 square metres in this price range. For land greater than 700 square metres, prices rise to between $200,000 and $250,000.
Construction costs vary, but a typical fourbedroom, two-bathroom home with double lock up garage, with a total floor area of between 200 and 250 square metres under roof will cost around $350,000 and increase depending on fitout and ancillary improvements. This gives a total house and land package of between $500,00 and $550,000 depending on land size and dwelling constructed. Sales in new estates of new homes tend to support the value levels. Despite COVID, the general sentiment is pretty positive, with strong employment in the resource sector, infrastructure and government continuing to drive our economy.
Speak with a Mackay Mortgage Broker today.
Gladstone Property Update
The government stimulus packages for the construction sector have had a marked impact on the Gladstone market. We have seen a significant rise in the number of new builds since the stimulus packages were announced.
Well-located, near-level vacant lots are getting hard to come by in the region. Larger estates such as Vantage (developed by Peet) on the western urban fringe have recently started selling lots again after a lengthy period of low sales rates after the boom. The first few sales we have seen in this estate are around the $130,000 to $140,000 mark for 700 square metre allotments.
Small lot estates such as Oasis in Kirkwood and Hill Close in Clinton are getting lots away for sub $100,000 for typically sub 400 square metre lots. Most purchasers of these smaller lots are investors building house-and-land packages and first homebuyers on tighter budgets. Other estates in the region such as The Sands in Tannum Sands, Riverstone Rise in Boyne Island and Cloudscape in Calliope have also seen a flurry of recent activity after a prolonged lack of sales activity in recent years. Infill residential and rural residential allotments in various locations are also being snapped up, some at well above current market parameters and all by buyers wishing to take advantage of current stimulus packages on offer.
Most new building packages from mainstream local quality builders in Gladstone stack up just fine, however we have also seen a recent increase in investment activity, particularly on smaller allotments marketed by project marketers to southern investors at very inflated prices. With the increased demand, some mainstream builders are beginning to reach capacity and as such we have seen the emergence of low volume and specialty builders out in the market. These smaller builders typically in the past may have only built one or two homes a year, however specialize in two-storey or higher quality homes.
It is highly likely that the increasing trend of new construction activity will continue for the foreseeable future until the stimulus packages end. There is still good value to be found in the region despite the shift in market conditions and we consider that new construction will continue once the stimulus packages end, albeit at a slower rate.
Bundaberg Property Update
With the introduction of the various government stimulus packages for the building sector and competitive offers from banks, we have seen a strong increase in new builds and land sales in the region. Demand has been stronger than we all anticipated. Affordability is still a main factor in our region along with an attractive lifestyle. This is attracting city dwellers away from the city centres and out to our region. New estates both in the coastal areas and city centre are all going well. The majority of coastal estates including Bargara Rise, Outlook, Bargara Beach Estate, Headlands Estate and Elliott Heads are all going strong. Other estates in Ashfield, Svensson Heights, Sharon and Branyan are also popular due to their location close to schools and services and their affordability.
Like other regions, until these stimulus packages end, it is likely this strong trend of new construction activity will continue for the foreseeable future.
Hervey Bay Property Update
The Fraser Coast area has experienced very high demand for vacant land since the Homebuilder package was announced by the federal government.
Sales have been consistently occurring in established estates as well as smaller infill developments with prices predominantly ranging from $160,000 to $200,000. Sites typically range between 600 and 1000 square metres offering full council services. Existing estates with exhausted land supply are now scrambling to develop their next stages to take advantage of the elevated demand. Local builders have reported that many clients have land waiting to settle or be titled before they can proceed to the building phase.
A new estate in Point Vernon known as Pandanus on the Point has recently been released offering 27 fully serviced lots from $167,500 with sizes ranging from 543 to 850 square metres. Most of these sites are relatively level and are located approximately 700 metres from the beach. Another new development in centrally located Kawungan is Abode Estate. It has 42 fully serviced lots with sites ranging from 514 to 854 square metres and prices from $165,000 to $185,000. Titles are expected in October 2020 for this estate. The Springs estate in Nikenbah offers fully serviced lots. Most sites are over 900 square metres and asking prices start at $190,000. Most estates have building covenants which ensures a good standard of improvements and assists with resale.
River Heads has some of the most affordable land stock in the area, with prices starting at $63,000 for 697 square metres for a moderately sloping lot with town water (however septic is required). Many sites in this area have views of the ocean and Fraser Island. The seaside location of Burrum Heads has fully serviced lots for sale starting at $130,000 which are typically level, cleared sites located very close to the beach. Beachcomber Park Estate in Toogoom has sites over 2,000 square metres starting at $160,000, also located very close to the beach. Town water is available, however there is no sewer. Maryborough has a lower supply of vacant land with most available lots in existing older areas starting at $75,000 (fully serviced). Lot sizes are generous in this location with some sites over 1,000 square metres listed for $79,000. Overall, the Fraser Coast represents exceptional value for money in comparison to other coastal areas, with regard to proximity to the beach, lifestyle and local services.
Speak with a Hervey Bay Mortgage Broker today.
Townsville Property Update
Townsville’s residential property market appears to have shrugged off the effects of COVID-19 and is powering on. Sentiment is positive and this in turn is feeding through to positive levels of homebuyer demand.
Demand for vacant land has seen a surge on the back of government incentives with anecdotal evidence indicating demand across most new land estates. The larger estates are pushing forward with development of new land releases to meet the demand and timeframe requirements of the builder’s grants.
Agents are reporting that infill blocks within established suburbs that had seen little demand over the past few years have also been snapped up as the volume of readily available land diminishes.
This surge in increased levels of demand is on the back of the current state and federal government building grants, which for a first home buyer could be up to $45,000. Even so, homebuyers who don’t qualify for the first homebuyer’s grant could still qualify for the federal government’s Home Builder’s Grant of $25,000 and the offered state government Regional Builder’s Boost of $5000 given after the purchase or construction of a new home.
We have seen a strong increase in the volume of valuation requests for new home construction with a large percentage of these packages falling in the $400,000 to $600,000 price bracket. From a valuation perspective, approximately 80 to 90 per cent of the packages we are seeing are stacking up in the current market.
Whilst this sector of the market is currently very active, there are concerns about the longevity and sustainability of the demand for land and construction once these additional grants expire.
Toowoomba Property Update
Having very few COVID-19 cases in regional Queensland together with government stimulus packages is underpinning the current boom in demand for vacant land and new house construction. Builders across Toowoomba and the broader Darling Downs region are reporting unprecedented levels of interest. Demand is coming from first home builders but also from upgraders and retirees moving in from western Queensland.
Until recently, there was a selection of housing estates around the Toowoomba periphery that contained residual vacant land stocks that had proven difficult to sell to local buyers. Suburbs containing a selection of these estates include Cotswold Hills, Highfields and Kleinton.
Developers are now fast-tracking further subdivision stages that had previously been earmarked for development at some point in the future. A challenge to the industry remains the cost versus value equation. In some instances, the cost of house construction plus land may exceed the property’s achievable value due to competition provided by existing product.
However, the established housing market is also trading well with agents reporting strong buyer enquiry and a shortage of listings, which is helping seller.
To date, there has been no significant uplift in vacant land prices however it is reasonable to expect developers to increase pricing in line with demand. Below is the 15 year trendline for vacant land sales and median price in the Toowoomba Regional Council area:
In-fill vacant land lots remain thinly traded due to a shortage of supply. Changes to local planning guidelines after the unit construction boom between 2012 and 2015 reduced housing densities in some suburbs which has significantly reduced the number of hatchet lots being developed.
The supply of housing to the market is reducing which is helping the upgrader sector of the market. Agents are reporting both local and absentee investor interest including buyers from interstate who are often happy to buy sight unseen. It is reasonable to expect a market correction at some point in the next twelve months as government stimulus packages reduce over time. Builders are likely to be busy well into 2021 and this will have a positive flow-on effect to other sectors of the local economy.
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.