LAND DEVELOPERS IN PERTH ARE FAST-TRACKING LAND RELEASES AS STOCK LEVELS DECLINE TO THEIR LOWEST LEVEL IN SEVEN YEARS.
A survey of over thirty major land developers by the Urban Development Institute of Australia (WA Division) showed the level of stock on the market fell 24.7 per cent over the three months to June 30 and 45 per cent over the past 12 months.
UDIA (WA) CEO Debra Goostrey said that developers are working as quickly as possible to bring forward planned stages, but these releases in Perth are being snapped up quickly amidst favourable market conditions.
“A lift in first home buyers and declining mortgage rates lifted new land sales over the last 18 months leading to a significant reduction in stock,” said Ms Goostrey.
“Developers brought 61 per cent more lots to the market in 2012/2013 compared to 2011/2012, but supply has been unable to keep up with demand.
“Developers in Perth sold the highest number of lots in ten years in 2012/13.
Ms Goostrey said that she doesn’t expect to see stock levels fall to 2005/06 levels.
“There is still more than twice as much land available as during the peak of the boom last decade and developers in Perth are expected to increase the number of lots brought to the market in the second half of this year,” said Ms Goostrey.
The Institute’s research showed developers are expected to increase the number of lots brought to the market in Perth in the second half of 2013 by 6 per cent, with 54 developments committed to bring land to the market.
Ms Goostrey said that after several strong quarters in the last twelve months and a limited supply of lots on the market worked against further sales increases in the June quarter.
Sales of vacant lots declined 6.3 per cent in Perth compared to the March quarter. The number of lots sold in the June quarter was, however, 44 per cent above the ten-year average in Perth.
“The industry is doing its best to keep up the supply of lots and it is absolutely critical that the government does not introduce any further restrictions on the supply of land to the market if we are to avoid the price hikes that occurred last decade,” said Ms Goostrey
“A larger proportion of higher priced lots changed hands and pushed the average price of lots sold up 6.2 per cent over the quarter to $238,400,” said Ms Goostrey.
Ms Goostrey said that land sales will continue to translate into above average housing construction levels in WA.
Approvals for the construction of new homes in Western Australia increased 6 per cent in the June quarter and 27.5 per cent over 2012/13 compared to 11/12. Multi-unit construction has been the standout in Western Australia over 12/13, increasing 44.0 per cent over the year compared to 23.7 per cent for detached housing approvals.
Top Locations for vacant land sales, Greater Perth, 2012/13*
| Suburb | Settled Sales | Median Price | Median Price/sqm | Notional House and Land Package Price** |
|---|---|---|---|---|
| Baldivis | 1102 | $185,000 | $387 | $394,500 |
| Piara Waters | 450 | $255,000 | $564 | $461,500 |
| Alkimos | 438 | $219,000 | $526 | $438,000 |
| Ellenbrook | 423 | $218,000 | $498 | $419,000 |
| Butler | 415 | $180,000 | $583 | $367,000 |
| Harrisdale | 415 | $242,000 | $637 | $448,500 |
| Aveley | 401 | $223,000 | $521 | $424,000 |
| Byford | 374 | $169,000 | $352 | $378,500 |
| Wellard | 354 | $185,500 | $440 | $380,500 |
| Landsdale | 352 | $303,500 | $638 | $534,500 |
| Yanchep | 263 | $201,000 | $409 | $420,000 |
| Brabham | 243 | $245,000 | $574 | $440,000 |
| Banksia Grove | 229 | $200,000 | $508 | $391,500 |
| Southern River | 227 | $270,000 | $569 | $477,000 |
| Dayton | 214 | $199,500 | $695 | $394,500 |
| Clarkson | 160 | $205,000 | $640 | $425,500 |
| Halls Head | 156 | $215,000 | $401 | $456,000 |
| Golden Bay | 152 | $165,000 | $453 | $421,000 |
| Caversham | 151 | $247,000 | $591 | $459,000 |
| Eglinton | 130 | $230,500 | $533 | $449,000 |
*Based on settlements data supplied by Landgate. Preliminary data as it does not include sales made in 2012/13 that have not yet reached settlement.
**Based on the average value of houses approved for construction in region during 2012/13 and the median land price.