Recent research surrounding land values in the south-east corner of Queensland has confirmed the average square metre rate of new land now costs $523.
Analysis of new land prices from 2006 to 2016 shows the average newly developed lot has shrunk from 632m2 to 466m2, yet average prices have increased from $184,000 to $244,000. This combination of rising price growth and reduction in lot sizing shows the $/m2 rate has risen from just $291 to $523.
Despite this exceptional growth making residential land in SEQ as one of the best performing investment classes over the past decade, values are expected to continue to increase.
With both Sydney and Melbourne experiencing extraordinary growth in the last 2 years alone, and Brisbane experiencing 6% growth in 2016, CFMG Capital maintain a strong focus on growing their land bank in the south-east corner of the state. The growth in the Sydney/Melbourne markets has created a significant price disparity between the 3 major capital cities on the eastern seaboard, one which CFMG Capital looks to take advantage of via strategic acquisitions in 2017.
Melbourne’s median land price recently topped $267,000, which reflects a ‘month on month’ increase of circa $9,000, or around $12 per hour according to Red23 Research. Since January 2017, the median land price has increased by $27,000 with the $/m2 rate swelling 37% over the last 5 years and 79% in traditional growth areas – representing similar growth to SEQ in half the time.
Despite the median land price trending strongly north, sales volumes remain buoyant across all growth corridors, with double digit monthly sales rates the norm. ‘Deliverability’ now becomes the biggest industry challenge in the Melbourne market with some developers lifting sales prices to attempt to temper sales rates as titles in many instances are more than 18 months away.
This level of growth and volume is expected to shift to growth markets within Brisbane and surrounds, and CFMG Capital are poised with sales already commenced at multiple new residential communities and contractors being locked away before ‘deliverability’ challenges reach the local market.
Sources: Red23 Research / Oliver Hume