This Week in Real Estate – 3rd March 2023
Gold Coast Land In Demand
The shine is yet to come off the Gold Coast market with the latest deal involving the sale of a block of vacant land for $7.5million.
The double block at Knightsbridge Parade West, Sovereign Islands on the Northern Gold Coast is 1407sq m.
The waterfront land which overlooks Stradbroke Island, sold to buyers from New South Wales’s Northern Rivers region.
Sovereign Islands is a gated community within Paradise Point which features some of the Gold Coast’s most expensive homes.
Price tags are frequently in excess of $20 million.
Part of its appeal includes deep water access for luxury boats and yachts. It has a median house price of $1.7 million which increased by 8.6% in the past 12 months.
Marketing agent Amir Mian says the land is one of the best blocks on the island, which is connected to the mainland by a bridge.
“Knightsbridge Pde is one of those streets that is well known, exclusive and has a high calibre of homes.”
SEQ Land Costs Rising
Increasing demand has driven land prices up by more than 36% in Southeast Queensland in the past year.
Migration and a lack of affordable stock has pushed southeast Queensland median land prices up by almost $100,000, according to Oliver Hume’s latest Quarterly Market Insights report.
The median land price in Southeast Queensland is now $339,000, while in the Ipswich and Logan Local Government Areas reached an average price of $300,000 or higher.
The report also says the Moreton Bay region achieved the largest market share (over 35%), for the first time.
Oliver Hume CEO of project marketing Julian Coppini says Southeast Queensland has high levels of good-quality stock available for the first time in years.
“The SEQ market has really struggled over the last couple of years to meet demand which means there has been only limited stock available,” he says.
“For the first time in two years, three of the six SEQ growth corridors recorded over 200 available lots.”
Quote of the Week
“Finding solutions to the issue of affordable housing is imperative. as it poses one of the country’s biggest challenges, and we must work together to address it.”
Master Builders Australia chief executive Denita Wawn
The Real Crisis Issue
Lack of supply and growing demand are not the only issues causing Australia’s housing crisis, according to new research from LongView and PEXA.
It also pinpoints high population growth, urban concentration and a shortage of well-located residential land near job nodes and services as contributing factors.
The research says house prices have grown much faster than incomes at a compound annual growth rate of 7.2%.
PEXA CEO Glenn King, says it now takes Australians up to 14 years on a median salary to save for a deposit on a typical mortgage, which makes it harder for young people to enter the market.
“Many first home buyers, who are forced to buy far from the centre of cities, are denied the opportunities that may increase their quality of life, including access to the higher paying jobs in the central city and employment hubs,” King says.
“They aren’t reaping the economic benefits that living in a city should bring.”
Rents To Rise Another 11%
Rents are tipped to keep rising and are unlikely to hit their peak until early next year according to new analysis by Westpac.
Westpac Business and St George senior economist Pat Bustamante says the situation is likely to be longer and more severe than previous rent rise cycles.
He predicts asking rents will increase by 11.5% this year, resulting in a national asking rent of $633 a week.
“Given the current supply and demand dynamics, and the lag in supply, the peak would likely take longer than people expect,” he says.
“The return of migrants and international students is providing an important injection of labour supply, but it’s also putting a further strain on the rental market.”
Bustamante says supply is sluggish at the moment as a result of rising interest rates and a lag between approvals and construction.
“Which means we’re unlikely to see a reasonable amount of new supply until the middle of 2024,” Bustamante says.