Follow up #2

As mentioned last week, several questioned a core statement in my recent land banking post being that land values within an active subdivision show limited growth.

Within is the key word here.

Yes land values across a wider area, and especially as a region matures, improves as amenities amass etc., do grow and more often than not faster than house values in the same region.

But this takes time, and much longer, than most subdivisions are active.

Also, given Australia’s projected annual population growth, undersupply of housing – especially new detached homes – plus the government push for more apartments, it is reasonable to anticipate that land value appreciation will accelerate.

A doubling in price (on a rate per square metre basis) and across our major urban area, within the next five to seven years, is possible.

This will see an increasing preference for smaller allotments and many buyers will look to maximise their housing asset by accommodating more residents on their title.

See my table and two charts below.

For your information.

Next week is Property Clock update time and then – as promised a month or so ago – I will complete the series of ‘reallys’ and attempt to answer what is really going on with the rental market.

Oh, I bet you cannot wait.



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