The 10th annual Urban Development Institute of Australia (UDIA) National State of the Land Report was released at UDIA’s National Congress in Melbourne this morning, reinforcing the Perth property market’s move into recovery mode following several years of downturn.
The report covers both greenfield land and multi-unit development in Perth, with both sectors following a similar trajectory.
“Our unique analysis of the greenfield land market in Perth shows that while the number of lots sold per month during 2017 was down 2.2% on the previous year, the rate of decline has slowed, stabilising from the massive 49% drop experienced between 2014 and 2015,” UDIA WA President Nick Allingame said.
“The average price of new land in Perth is also down 1% this year, but again, prices are performing much better than the significant falls experienced in previous years,” Mr Allingame said.
The average price of land sat at $227,000 for the December 2017 quarter.
“The report also shows that levels of stock are declining, which means that supply and demand is starting to even out,” Mr Allingame said. “This is a good indicator that demand will pick up in the coming months.”
“Interestingly, the report highlights that Perth has the smallest lot size in the country at 375m²,” Mr Allingame said. “Even smaller than Sydney at 390m².”
“This small lot size reflects the trend that started during boom times when developers started to produce smaller lots to address affordability issues,” Mr Allingame said. “It also shows that the Perth market has progressed and buyers expectations are changing in regard to how much land they are looking for.”
“The multi-unit market in Perth has followed a similar trajectory to the new land market, with completions falling 38% between 2016 and 2017,” Mr Allingame said.
According to the report, these falls are a result of lower levels of demand and the clearing of the oversupply of stock created during the resource industry construction ‘boom’.
“The highest number of unit completions occurred in Lathlain, Burswood and Victoria Park,” Mr Allingame said. “Interestingly, the areas with the second highest number of completions were Kardinya, North Coogee, Hamilton Hill, Bibra Lake, Spearwood and North Lake.”
“The location of multi-unit stock is reflective of a move to diversify housing opportunities in areas further from the CBD,” Mr Allingame said.
The highest median sales values were recorded in the central city and beachside locations including Scarborough and City Beach at $450,000. Meanwhile outer suburban locations in the 20km-50km band recorded median values around $310,000.
“Overall the report suggests further stabilisation of the greenfield and multi-unit development sectors throughout 2018,” Mr Allingame said.
“This positive sentiment is due to easing of the unemployment rate, improved job creation and a slow pick up in population growth,” Mr Allingame said.
“The state government has also been proactive with regard to progressing planning reform, the establishment of Infrastructure WA as well as introducing Strata Title Reform that will all help boost the property market in WA,” Mr Allingame said.
“2018 and beyond is looking bright for the Perth market.”
Ends.
For more information:
Gemma Osiejak
UDIA WA Executive Manager Communications & Marketing
E: gosiejak@udiawa.com.au
M: 0421 506 819