Where to buy land: How prices fare from Brisbane to the coast

Build contracts are being drawn up closer to 90 days from land titles being registered in order to ensure construction prices were more reflective of the market.

The price of a block of land from Brisbane to the Gold Coast rose 7.5 per cent in the past year despite the construction crisis, with major swings underway, say experts.

Oliver Hume Queensland and Northern Territory general manager Dan Ross said price points, buyers and demand remained fairly consistent off the previous highs for land “even though there’s a lot of uncertainty around”.

“We have an undersupply of land as it is and waves of inquiry of future migration will only continue to put pressure on that.”

The median lot price for new residential land across South East Queensland rose 7.5 per cent to $346,000 year-on-year in June, he said.

But major drops were recorded across Brisbane (-19.4pc to $584,500), the Gold Coast (-36.1pc to $637,000) and Moreton Bay (-4.2pc to $378,500).

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Oliver Hume Queensland General Manager Dan Ross.

“Those numbers are a little bit deceptive with quite a big drop,” Mr Ross said. “We also have to remember that this time last year, Q2 2022, we were coming out of the back of Home Builder and so a lot of the lots that were remaining were probably large acreage lots, premium lots that weren’t tailored to the broader market. As developers have worked through their supply, they’ve been able to bring back a gamut of product offerings, which has made it more in line with typical price points for the corridor.”

Major adjustments were being made by developers and builders to cope with strong market conditions, with the latest Oliver Hume June Quarterly Market Insight report finding prices of land dropping dramatically due to higher levels of smaller block sizes.

Brisbane median lot prices fell -19.4pc to $584,500. Picture: AAP Image/Darren England.

Ipswich almost flat with a 0.2pc lift to $325,000. Massive median land price surges were seen in Logan (up 29.8pc to $314,050) and Redland (up 17pc to $547,500) where there had been strong demand as well as supply for a period.

”It took a while for those corridors to work through supply that they had available to the market, and once that supply was exhausted, then price growth was able to be achieved – and that did occur at the back end of last year through to this year.”

“It’s going to be an interesting 18 to 24 months in the future, but I don’t see it slowing down right through until the lead up to the Olympics. Brisbane and South East Queensland will continue to be a focus for the national news cycle, which will just keep eyeballs on this state.”

The Oliver Hume report found that over 30 per cent of land lots sold in June 2023 were expected to title within this year or had already titled, with around two thirds (almost 63 per cent) due to title in 2024 and about 7 per cent in 2025.

Mr Ross said some of the changes underway across the industry now included build contracts being drawn up closer to 90 days from land titles being registered.

Brisbane logged a massive falls in median lot prices, most of which was linked to smaller lot sizes hitting the market, and larger blocks clearing in previous periods. Picture: AAP Image/Dave Hunt.

“What that does is help reduce any risk associated with signing a build contract with a builder that may incorporate a price hike or something unforeseen. We’re very fortunate that our builder partners around South East Queensland have also worked to mitigate factors that are outside of their control. Allowing build contracts to be signed a little bit closer to registration has helped with ensuring completion rates that we’ve seen within Queensland.”

That, he said, was helping bring back some measure of calm.

“We have seen in the last four or five months that civil contractors’ price rises and time frames are easing. There’s a lot more supply coming through to help with delivery, and obviously we haven’t had the wet weather that we found through the start of 2022, which has also helped keep construction time frames intact.”

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Among blocks set to come onto the market next year is stage 2 of Frasers Property Australia’s $500m master planned community The Quarry, Keperra. Picture: Lyndon Mechielsen/Courier Mail.

First home buyers are struggling though, with their market share falling to one of its lowest points in the past year at 36 per cent in June, compared to a long term average of 50pc.

“It’s something that developers talk about a lot – offering product diversity, whether a smaller lot product to try and recapture that price point for their entry level purchaser, or working with builders on terrace style homes focused at entry level price points,” Mr Ross said – adding that buyers too needed to adjust their expectations to get a foot in the market.

Over 30pc of lots sold in June were 400-449sq m, Oliver Hume found, while almost 19pc were 500-549sq m, and around 7pc smaller lots sized 250-299sq m.

“Going forward, the provision of more affordable stock will be increasingly important,” the Oliver Hume report said, “especially for buyers aged in their 20s and early 30s”.

First home buyers were now well into their 30s, the report found, which helped drive those in the 33 to 44 year segment to account for the largest share of lots purchased – 39pc – though that included many second home buyers looking to upgrade from their first home.

Frist home buyers are now well into their 30s the report found. Picture: AP Image/Glenn Hunt.

About a third of buyers were 41 to 55 years, while those aged 26 to 32 years made up almost 19pc of sales.

Mr Ross said significant population growth, including interstate and international migration, would continue to drive demand for land.

“It’s going to be an interesting dynamic because I do believe that we’re going to face strong interstate migration. We’re already seeing the number of inquiries coming from interstate has increased over the last 18 months. Obviously their budget, time frames and understanding of purchasing off the plan is a lot stronger than probably the typical Queensland purchaser, so that does put them in a stronger position.”

The Oliver Hume report found nearly half of all buyers in June were born in Australia, with the rest made up of migrants led by Indian born buyers (22pc).


The post Where to buy land: How prices fare from Brisbane to the coast appeared first on realestate.com.au.

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