Stuff worth knowing #4 – SEQld Land Market

I started 2021 off by writing a series of ‘stuff worth knowing’ posts, they appeared to be popular with a number of peeps asking me for more.  In typical fashion it has taken me some time to respond.  But better late than never.

This week I cover the south east Queensland land market.

Four tables and three charts accompany this missive.  They are located at the end of my summary.

SEQld land market summary

Even when factoring in Covid’s impact, south east Queensland’s population growth rate is expected to increase over the next five years to average around 38,000 new residents per year.

As a result, there is a need to build some 14,500 new dwellings each year across the region, of which I estimate around 10,000 will need to be for detached dwellings.

Table 1 shows that most municipalities across south east Queensland do not have enough land supplies to cater for this demand, with only two local council areas having enough potential supply over the next five years, being Logan City and Lockyer Valley.

Chart 1 shows the interplay between underlying housing demand and dwelling registrations.  For mine, the most accurate measure of actual new housing supply is a dwelling registration.  This happens when the property title is transferred from the developer to the buyer and takes place at settlement.  Housing registrations across south east Queensland are well below underlying demand.

The undersupply of new housing, especially detached housing supply across south east Queensland, is now critical, with only 36 land estates releasing more than 50 allotments during 2020.  See table 2.  This is down from 62 similar sized land releases three years ago, and an alarming 93 comparable land estates in 2017.

As a result of increasing population growth (coupled with low interest rates/easy credit and various government incentives) land sales are increasing across south east Queensland, but with tight supply, land prices are rising too and sharply.  See charts 2 and 3.

Table 3 shows that some 17,000 urban allotments sold across south east Queensland during financial, which is up from 11,500 sales the year before.  The median urban land price across the region now exceeds $300,000; the median urban lot size is 425m2 and the median price of land on a per square metre basis is $710.  The median price of a new house and land package is close to $600,000.

And in conclusion, Table 4 shows that there is now little new land development that supplies allotments over 600m2.  The supply of new land sized over 1,000m2 is particularly tight.

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