This post I want to discuss the vacant land market.
Four tables have been included in this post.
Table 1: SEQ urban land sales 2009 vs 2019, sale volumes + median prices
| LGA area | 2009 | 2019 | Ten year change | |||
| Sold | $ | Sold | $ | Sold | $ | |
| Brisbane (C) | 1,375 | $278,000 | 1,750 | $416,250 | 27% | 50% |
| Gold Coast (C) | 1,125 | $248,500 | 1,475 | $290,250 | 31% | 17% |
| Ipswich (C) | 1,350 | $169,750 | 1,600 | $203,000 | 19% | 20% |
| Lockyer Valley (R) | 350 | $81,500 | 200 | $149,750 | -43% | 84% |
| Logan (C) | 950 | $171,500 | 2,100 | $226,750 | 121% | 32% |
| Moreton Bay (R) | 2,350 | $214,750 | 1,975 | $253,750 | -16% | 18% |
| Noosa (S) | 150 | $275,250 | 125 | $340,500 | -17% | 24% |
| Redland (C) | 250 | $294,500 | 325 | $319,250 | 30% | 8% |
| Sunshine Coast (R) | 1,475 | $240,250 | 1,675 | $275,500 | 14% | 15% |
| Toowoomba (R) | 850 | $109,500 | 500 | $180,250 | -41% | 65% |
| Tweed (S) | 225 | $267,750 | 200 | $380,000 | -11% | 42% |
| South East Qld | 10,450 | $219,000 | 11,925 | $278,750 | 14% | 27% |
| Matusik Ready Reckoners, ABS, Qld + NSW Govt. Financial years. | ||||||
Table 2: SEQ urban land sales 2009 vs 2019, median lot size + $/m2
| LGA area | 2009 | 2019 | Ten year change | |||
| m2 | $/m2 | m2 | $/m2 | m2 | $/m2 | |
| Brisbane (C) | 500 | $556 | 410 | $1,015 | -18% | 83% |
| Gold Coast (C) | 700 | $355 | 475 | $611 | -32% | 72% |
| Ipswich (C) | 510 | $333 | 450 | $451 | -12% | 35% |
| Lockyer Valley (R) | 480 | $170 | 525 | $285 | 9% | 68% |
| Logan (C) | 575 | $298 | 410 | $553 | -29% | 86% |
| Moreton Bay (R) | 600 | $358 | 450 | $564 | -25% | 58% |
| Noosa (S) | 800 | $344 | 665 | $512 | -17% | 49% |
| Redland (C) | 650 | $453 | 460 | $694 | -29% | 53% |
| Sunshine Coast (R) | 660 | $364 | 600 | $459 | -9% | 26% |
| Toowoomba (R) | 890 | $123 | 850 | $212 | -4% | 72% |
| Tweed (S) | 725 | $372 | 700 | $543 | -3% | 46% |
| South East Qld | 620 | $353 | 475 | $587 | -23% | 66% |
| Matusik Ready Reckoners, ABS, Qld + NSW Govt. Financial years. | ||||||
Two take outs
Table 1 shows that land sale volumes are up 14% across south east Queensland over the past decade, whilst end prices have risen by just 27% over that same time frame. At first glance this price escalation looks middling at best.
But table 2 explains that median land sizes have fallen by 25% in this neck of the woods since 2009, whilst the price paid by the punters on a price per square metre basis has risen by 66%.
So, across SEQ, lot sizes have fallen by a quarter and the real land price (best measured a rate/m2) has increased by two-thirds.
This reflects two trends:
- tightening land supply and rising associated costs of land development, and
- changing housing demographics and lifecycle preferences.
We won’t rehash the land supply story – go here if you aren’t convinced – but I want to include in this post a note about the people stuff.
The people stuff
There are two major housing demographic shapers over the next decade. These two forces apply across most of the Australia, including south east Queensland.
These two next big waves are first home buyers and downsizers. Both these markets are looking for affordable housing outcomes and more often than not, smaller homes with less maintenance.
Smaller lots – especially those near high quality offsets like parks, cafes and views – are in increasing demand.
Most of us have busy lifestyles these days and much of a family’s spare time is now structured around kids’ sport, after school activities and homework.
For the adults going to the gymnasium is more popular than kicking the footy in the backyard.
And when we have a catchup with friends or relatives, the local café or boutique pub beats cleaning up the house post event (and having your house and possessions critiqued by others).
How can they live like that? Oh, I thought they would have better stuff? Did you see the state of the bathroom? Who needs the aggravation!
Besides we are spending more and more time in front of our digital screens and less leisure time outdoors or with friends/relatives. Well at least not face to face.
And if the car hiring and car sharing trends are taken up by the mainstream, then less private land will be needed for the second or third car. Well maybe.
Cars aside, these trends are also driving allotment sizes smaller. Pun intended.
The next ten years
Table 3 below outlines the more commonly used allotment typology.
Our recent work suggests that we are likely to see further shifts towards more smaller allotments.
Table 3: SEQ past and future new allotment mix
| Urban lot type | Median lot size | Past decade | Next decade |
| Terrace allotment | 250m2 | 5% | 15% |
| Cottage allotment | 350m2 | 10% | 25% |
| Villa allotment | 400m2 | 20% | 25% |
| Courtyard allotment | 500m2 | 35% | 25% |
| Traditional allotment | 650m2 | 30% | 10% |
| Matusik, Qld + NSW Govt. Past decade = 2009 to 2019. Next decade = 2021 to 2031.
Matusik estimates for next decade. |
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Pricing benchmarks
Some think this is just a scam, a means by which developers can charge more per metre of dirt sold, and yes, they do charge more per square metre for the smaller allotments.
Table 4: SEQ past and current pricing benchmarks
| Urban lot type | Median lot size | 2009 | 2019 |
| Terrace allotment | 250m2 | 130% to 140% | 145% to 150% |
| Cottage allotment | 350m2 | 120% to 125% | 130% to 140% |
| Villa allotment | 400m2 | 110% to 115% | 120% to 125% |
| Courtyard allotment | 500m2 | 105% to 105% | 110% to 115% |
| Traditional allotment | 650m2 | 100% | 100% |
| Matusik, CoreLogic + PriceFinder. | |||
Yet developers can only charge what the market will bear and table 4 shows that over the past decade, buyers are placing a premium on the smaller allotments.
This trend, I think, will accelerate in the future.