Regional NSW

The Smartline Report – April Edition

The month in review: Regional NSW

By Herron Todd White
April 2015

NSW Central Coast

The availability of new land releases within the New South Wales Central Coast region is an interesting topic for us to consider this month. Those who are familiar with the region will know that the area is undergoing considerable expansion and change and has been for many years. There are a few contributing factors to this, including the region being on the doorstep of the Sydney metropolitan area, the relative affordability in comparison to Sydney prices, the agreeable lifestyle and the variety of housing types available. For those unfamiliar with the region, we hope this snapshot is helpful.

When speaking of new land estate releases, we find the region to be a little undersupplied at present and this is some way from where we have been in the not too distant past. This is particularly the case at the southern end of the region within the Gosford Local Government Area, where not only are there very limited opportunities available for developers to secure land for subdivision, but an apparent lack of will to do so.

For this reason, the main choice at present is the land being developed within the Kings Estate at Terrigal. Stage 1 of the estate has all but sold out and the developer advises that Stage 2 is almost sold out as well. Within the estate, lot sizes and topography vary. Sale and asking prices start from low $400,000 which seems reasonable given the close proximity to schools, shops and the beach.

Stepping outside of the Kings Estate, but remaining in the Terrigal area, we note that sale prices are often below the $400,000 mark, but we caution that some of this land is likely to be expensive to build on.

A smaller subdivision of ten lots in Green Point Gardens in Green Point was released late last year. Green Point is a suburb with good ongoing demand and with limited available vacant parcels, most of these lots were sold by December last year.

The recently completed Ridgeview Estate at Narara has 42 lots, but it appears they have all been sold as well. So apart from the Kings Estate, there are limited, if any new residential estates available on the southern end of the coast. We have however, noticed that construction of a new subdivision has just started at Lisarow. We understand there will be approximately 40 lots overall, but details of asking prices are unknown at this stage.

Naturally though, there have been numerous vacant land sales across the Gosford LGA over the past year. In fact a quick search of our records suggests there have been close to 200 sales, but we hasten to add that quite a few of these are smaller development sites or smaller rural residential sites. Vacant land prices span a wide range and setting aside those sales with indicators of out of line sales, it seems Spencer is the starting point of values at the southern end of the region at $115,000. Spencer is a somewhat isolated community on the banks of the Hawkesbury River and if quiet and isolation with a scenic backdrop suits, then Spencer is well worth investigating. At the other end of the value scale, expect to part with between $600,000 to $1 million for a vacant parcel at or near the beaches. In the suburbs a short drive from the beaches, we generally see vacant land prices between high $200,000 and high $300,000.

Overall though, it must be said that the southern end of the region has limited vacant land opportunities available. In response to this and not surprisingly there seems to be more activity in renovations and extensions by those wishing to trade up or upsize. In the absence of vacant land parcels, developers and smaller investors target those parcels fitting the infill development formula, not particularly good news for first home buyers looking to take advantage of the government grants and incentives available when building new homes.

A short drive to the northern end of the region reveals a slightly different story.

Covering the Wyong Local Government Area, this region has long been the hub of new residential estates, home building activity and young families, particularly so in the Warnervale Release Area. This is the area north of the Wyong Town Centre between the M1 Motorway and Kanwal, Gorokan and North Wyong. It includes the suburbs of Hamlyn Terrace, Woongarrah and Wadalba and the site of the developing Warnervale Town Centre.

This level of sales turnover is well down over previous years and again, indicates a lack of stock in this location. We draw this conclusion on the basis that a search of a popular real estate website contains a number of englobo (undeveloped ) sites available for sale at present in these areas with the main marketing theme being along the lines of land banking. In fact there are more englobo sites being marketed than residential parcels ready to build on.

These findings are interesting because the Warnervale Release Area has long been the hub of new development on the Wyong LGA, but it seems obvious and worrying that at present the availability of vacant residential land has dwindled to such low numbers. We would like to say that demand is low, but in the current market we know this is simply not the case. Largely on the back of low interest rates and market confidence, sales activity for improved properties is quite strong at the moment in these localities and has been this way for some time and it would seem a normal course of events to develop and sell land to meet this demand, but at present this does not seem to be case.

Asking prices for the vacant land parcels available in these areas tend to be hovering around the $200,000 mark for standard building blocks of 500 to 650 square metres and this is considered to represent good buying.

Watanobbi is also a developing area which is closer to the Wyong Town Centre. Values across the board tend to be slightly lower in this suburb and we have noted that asking prices for those few vacant land parcels available are around the $170,000 to $200,000 mark.

A little further to the north of Woongarrah and Hamlyn Terrace is the suburb of Blue Haven. This again is a developing suburb with asking prices also hovering around the $170,000 to $200,000 mark. We have noted at least one new estate here with approximately 30 lots available where sale and asking prices appear to be within this range.

These numbers and asking prices have been sourced from popular real estate websites, but we note that a number of development companies hold land stock in most of these areas. It is difficult to estimate the number of properties they have, but they are selling them under house and land package arrangements. For those seeking the convenience of buying a new home, ready to move into with floor and window coverings, driveways and landscaping taken care of, they represent reasonably good value overall, but it must be said that buyers need to exercise care as the quality and inclusions can vary considerably. They are also a good option for investors due to the allowances available.

Further north again lies the suburb of Gwandalan and in recent weeks we have visited a new estate here. It is quite a pretty estate with a gentle fall across it and next to the local primary school. From what we can see, there are about 30 lots in the current stage. A number of these lots have been sold already with further stages of the subdivision planned for development. Sale prices to date have been around the $165,000 to $175,000 mark.

NSW Mid North Coast

This month we look at where land is being developed, the demand and selling prices.

As we have noted in recent reports, the Mid North Coast is showing increasing activity in the residential sector.

As fast as developers are releasing their lots, they are being snapped up, firstly by builders, then investors and home buyers, with the builders seemingly obtaining the lion’s share of newly released lots at present.

The large estate of Sovereign Hills to the west of Port Macquarie is currently developing 83 new sites in its College Rise precinct with development approval for another 378 sites. After a long lead-in period with little interest, this new town appears to be booming with average sale prices of about $203,000.

Estates closer to Port Macquarie are selling out as fast as they come on line, as are the recently developed stages of several estates in Wauchope. The first stage of the new Glenview Park Estate (28 lots) just west of Wauchope sold out quickly with average prices of about $155,000.

The larger coastal towns further south (Harrington, Tuncurry and Forster) are also struggling to keep up with demand for new vacant lots, albeit at a lower level than Port Macquarie.

The increase in vacant land sales has led to an increase in building approvals and seen local builders’ workloads significantly increase, which is good to see after a few years of minimal new construction work.

In summary, the high take up of vacant land at present is helping fuel the local building industry with activity increasing rapidly. This in turn is helping the local economy as a whole. Sales of new dwellings are at a five year high with land values increasing in each new stage released as builders and other buyers compete for available land. Hopefully this activity will continue during 2015.

www.smartline.com.au

Please note that information in this publication is subject to change without notice. Smartline assumes no responsibility for any errors, omissions or mistakes in this document. © Smartline Home Loans P/L 1999 – 2015. Australian Credit Licence Number 385325

 

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