This Week in Real Estate -25th February 2023
Developable Land Supply Low In SEQ
More than half of the land under review for development by the Queensland Government cannot actually be built on.
Department of State Development, Infrastructure, Local Government and Planning Director-General Mike Kaiser told a UDIA event that, of the 30,000 ha identified in South-East Queensland for potential development, only 13,000ha can be built on.
The land had been identified initially via the Queensland Government’s Underutilised Urban Footprint.
Kaiser says those sites which can’t be built on have either “intractable constraints or are uncommercial”.
UDIA CEO Kirsty Chessher-Brown says with a severe housing crisis it is important that there is clarity around where development can and can’t proceed.
“These findings are in line with the views of the Institute’s five regional branches across SEQ, expressed over many years,” she says.
“Institute members are at the coalface of these problems so are well-placed to work with State and Local Government as advisors and partners to deliver much-needed housing as soon as possible.
Quote of the Week
“While selling conditions have clearly softened from where they were in early 2022, and market activity has slowed, the fundamental long-term drivers of demand for housing remain solid.”
PropTrack economist Angus Moore
Clearance Rates Rebound Strongly
Auction clearance rates have rebounded with buyers still keen to buy under the hammer.
According to CoreLogic figures, the national preliminary clearance rate hit 71% last week, the first time it has surpassed 70% since April 2022.
Sydney had a clearance rate of 78% and Melbourne 68%.
In the smaller capital cities, Adelaide once again had the highest preliminary clearance rate of 69%, followed by Canberra (66%) and Brisbane (63%).
As 2023 gets into full swing it is expected the number of properties being offered for auction will increase in the coming week, with about 2,500 homes scheduled to go under the hammer.
CoreLogic’s Tim Lawless says the rebound, particularly in Sydney, reflects a stabilising of the market.
“It’s really a strong result, something we haven’t seen in a year, well before interest rates started rising,” he says.
“Auction clearance rates have been improving and getting into the 70% range since the end of last year, but these numbers are a step-up.”
Listings Still Low And Prices Solid
The number of properties being listed for sale across Australia remains lower than at the same time last year, despite a recent uptick.
Analysis by PropTrack economist Angus Moore shows new listings in capital cities almost doubled month on month in January as sellers returned to the market.
“Despite the increase, new listings were still below 2022’s strong levels,” Moore says. “Conditions and activity slowed in the back half of 2022 following an extremely busy spring in 2021 which extended into early 2022.”.
At the same time Moore says house prices declined slightly, down 0.1% month-on-month in January, to be now 4.5% below their early 2022 peak (as a national average).
He says although some may struggle with continual interest rate rises, he is optimistic about the longer-term state of the economy.
“While selling conditions have clearly softened from where they were in early 2022, and market activity has slowed, the fundamental long-term drivers of demand for housing remain solid,” he says.