LMW Link Gold Coast Residential Land Review Q3/2016 1 Highlights Demand for vacant land across the Gold Coast has continued to improve, with the latest data revealing an 18% increase in new lot transactions for the year ending March 2016 (the most recently available data). Land production (newly certified vacant residential lots) increased by 52% and standard lot registrations increased by 53% for the year ending March 2016. Demand for vacant land exceeded supply. Residential construction activity is concentrated in the Coomera-Pimpama area; around the new canal system in Hope Island, and at Helensvale-Arundel where Villawood and Villa World have major projects. Demand for vacant land, and in turn, new homes, is being driven by continued low interest rates, Government incentives ($20,000 First Home Owner Grant), relative affordability and stability of land prices (facilitated by a reduction in average lot size) as well as escalating house prices in centrally located suburbs.
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LMW Link Gold Coast Residential Land Review Q3/2016
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Highlights Demand for vacant land across the Gold Coast has continued to improve, with the latest data revealing an 18%
increase in new lot transactions for the year ending March 2016 (the most recently available data).
Land production (newly certified vacant residential lots) increased by 52% and standard lot registrations increased by 53% for the year ending March 2016.
Demand for vacant land exceeded supply.
Residential construction activity is concentrated in the Coomera-Pimpama area; around the new canal system in Hope Island, and at Helensvale-Arundel where Villawood and Villa World have major projects.
Demand for vacant land, and in turn, new homes, is being driven by continued low interest rates, Government
incentives ($20,000 First Home Owner Grant), relative affordability and stability of land prices (facilitated by a reduction in average lot size) as well as escalating house prices in centrally located suburbs.
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Key Facts The following key facts have been sourced from the most recent Residential Land Development Activity Profile (March
2016) for the Gold Coast, compiled by the Queensland Government Statistician’s Office (QGSO), Queensland Treasury.
The average size of a new vacant lot is now a record-low of 444m2, down 4% on the previous year, and down 32%, or 206m2, from 2008. This compares with the national median lot size of 453m2, down 4.3% on the previous year.
At the same time, the median sale price of a new lot has remained relatively flat at $240,000.
The price per square metre ($/m2) of new lots continues to increase, up 8.3% (or $43/m2) over the year to $560/m2, and up 53.8% (or $196/m2) since 2008.
New lot prices currently represent around 50% of the price of the average house and land package, which is currently $482,500.
The total number of standard lot registrations (60m2 – 2,500m2) was 2,825 for the year ending March 2016, up 53% on the previous year, the highest level recorded in many years.
The three dominant land size categories of new lot registrations are 350-450m2 (40%), 450-600m2 (27%) and
600-800m2 (12%). It is interesting to note that the 350-450m2 sized land category represents the most dominant size of new land today, however represented just 5.7% of land released in 2008.
The market more than soaked up this increased supply, with the number of new lot sales (3,060) exceeding the
number of new lot registrations (2,825).
An issue of concern is that infrastructure in the Gold Coast’s northern corridor is failing to keep up with the area’s population growth and expansion of new estates. A combination of no new local roads and the already congested Pacific Motorway is frustrating residents and businesses in the area.
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Development Activity South East Queensland (SEQ) continues to drive growth in state-wide land markets. The table below describes the top 10 local Government areas in Queensland for several development activity indicators for the year ending March 2016. Overall, the Gold Coast continues to record the greatest level of development activity across a number of indicators including Lot Registrations, New Lot Sales and Dwelling Approvals.
In the year ending March 2016, the Gold Coast recorded a 47% increase is Detached Dwelling Approvals compared with the previous year. More than 70% of all new dwelling approvals across the Gold Coast were concentrated in the northern corridor.
Overall, Lot Approvals in Moreton Bay were strongest followed by Ipswich and Logan. These three regions have seen significant large scale land acquisition activity, due mainly to the availability of land and proximity to existing and establishing infrastructure and employment nodes.
Rank Lot Approvals Standard Lot Registrations New Lot Sales Detached Dwelling Approvals1
1 Detached dwelling approvals can occur on existing lots and are not directly comparable with new lot approvals, registrations and sales. (C) = City (R) = Regional Council Source: QGSO, Dwelling Activity Monitor, March 2016
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New Lot Sales
In the year ending March 2016, there were 3,060 new lots sold on the Gold Coast of which 2,774 were vacant. The remaining 286 lots were either part of a developer ‘house and land’ package sale or consisted of an existing dwelling that sold after subdivision of a parent parcel. Sales of new vacant lots (not forming part of a house and land package) represented a 22.9% increase over the previous 12 months and was the largest percentage increase seen throughout SEQ. The majority of sales were concentrated in the northern corridor (Coomera and Pimpama) where most land estates are situated.
Strong demand for vacant land has led developers to release several stages to the market simultaneously. The strong demand has also motivated several developers to pre-sell allotments in stages not yet under construction.
For example, Mirvac have lodged application for six stages within their ‘Gainsborough Greens’ estate, AV Jennings have lodged applications for four stages in their ’Big Sky’ estate and Leda are currently developing several hundred lots in their ‘The Meadows’ estate.
Average sale rates achieved in medium and large-scale estates across the Gold Coast vary greatly between approximately 5 and 35 lots per month. Almost without exception, sales rate increase as stages are rolled out.
Vacant Land – New Lot Sales1 (140m2 to 2,500m2)
No of Sales Median Sale Price No of Sales % change
12 months to Mar-16
Median Sale Price % change
12 months to Mar-16
1 Brisbane 1,649 $376,000 5.8% 7.7%
2 Ipswich 1,443 $185,000 -5.2% 1.6%
3 Logan 942 $209,800 -12.2% 7.6%
4 Redland 611 $300,000 8.3% 3.4%
5 Moreton Bay 1,806 $244,000 -16.0% 9.7%
6 Sunshine Coast 1,896 $255,000 -13.9% 3.9%
7 Gold Coast 2,774 $240,000 22.9% 0.9%
1 May include resales of vacant land. Excludes intermediate vacant land transactions relating to developer house and land package sales. Source: QGSO March 2016.
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Lot Size The trend of declining lot sizes across all regions has continued over the past year and is a reflection of changing market preferences, land constraints and affordability pressures. The average lot size across the Gold Coast is now 444m2 - a 32% decrease (or a decrease of $206/m2) on the average lot size recorded in 2008.
It is interesting to note the number of small lots (circa 350m2) being released across various estates. Examples include houses on 250m2 lots (10-metre frontages) at ‘Highland Reserve’ in Upper Coomera, houses on 240m2 lots at ‘Yarrabilba’ and 225m2 lots at ‘The Meadows’ at Pimpama.
The shift in lot delivery has been a necessary movement to ensure the price point for house and land remains affordable for the target market. With land supply likely to remain constrained over the medium term, affordability pressures are likely to influence the composition of new housing.
Changing lifestyle preferences are also having an impact on housing consumption. Buyers are increasingly attracted to low maintenance options that come with smaller lots. They are also attracted to the recreation amenities, communal facilities and communal ‘green spaces’ that many new estates provide.
Land Values per Square Metre (m2) Median lot prices do not take into account the differences in the characteristics of the lots being traded such as their size. A comparison based on prices per square metre (m2) is therefore more appropriate for analysing land values.
Land values increased in $/m2 terms over the past year across all regions studied in South East Queensland.
The largest increase occurred in Brisbane (+$65/m2), followed by Redland Bay (+$51/m2), Moreton Bay (+$47/m2) and the Gold Coast (+$43/m2). By a very considerable margin, Brisbane remains the most expensive land market at $833/m2.
Outside of Brisbane, Redland Bay is the most expensive market for land ($627/m2), followed by the Gold Coast and Moreton Bay (both at $560/m2).
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House & Land Packages The majority of new house and land construction on the Gold Coast is concentrated in the growth region from Hope Island to Beenleigh and west to the Scenic Rim.
New house and land packages occupying small to traditional sized lots are typically priced between $450,000 and $550,000 with the main variance in price being the size of the land area. Very small terrace style product typically start from $300,000. Anecdotal feedback from local agents indicate that there is a price ceiling of circa $550,000 for the majority of demand seen in recent times.
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The table below shows sales of allotments as a component of a developer house and land package as well as subdivided lots containing an existing dwelling.
On average there have been 238 new allotments sold per annum as a component of a house and land package from 2008 to 2016. Sales were strongest in 2008 recording 404. More recently, however, preliminary sales volumes for the March-16 year have decreased by 12.3%, which is largely a reflection of supply and demand. The vast majority of developers are producing vacant land only– not traditional ‘House & Land’ packages.
The median sale price for House and Land packages increased by 6.6% over the same 12-month period to $482,500.
Logan is currently one of the most affordable regions across the South East and has experienced strong sales growth over the past 12 months largely due to of its affordable price points.
House & Land Package2 Market
Median Sale Price No of Sales No of Sales % Change
12 months to Mar-16
Median Sale Price % Change
12 months to Mar-16
1 Brisbane $635,000 719 8.1% 7.6%
2 Ipswich $394,307 300 5.3% -3.8%
3 Logan $399,000 238 37.6% 4.7%
4 Redland $510,500 234 25.1% 4.4%
5 Moreton Bay $444,000 502 25.8% 1.8%
6 Sunshine Coast $480,000 272 30.1% 4.6%
7 Gold Coast $482,500 286 -12.3% 6.6%
2 Includes lots as a component of a developer house and land package in addition to subdivided lots containing an existing dwelling. Source: QGSO March 2016.
Supply The QGSO data revealed that there were 3,306 lots with ‘Current Operational Works Approvals’ at the end of the March 2016 quarter. These lots represent approved land most likely to be developed in the short term and accounted for 41% of the 7,989 uncompleted lots* in the pipeline.
Additionally, the latest broadhectare** data show that there is approximately 3,520 hectares of broadhectare land suitable for residential development on the Gold Coast. This figure has fallen 11% from 3,964 hectares recorded in 2013, which at that time represented around nine years of supply. If the current volume of broadhectare land were to be fully developed, it would have the potential to yield approximately 47,000 dwellings. It is likely that the current amount of broadhectare land available is now below the nine years of supply recorded in 2013.
Future land supply, with the exception of a few existing operating estates, is severely constrained. It is therefore likely that there will be more pressure to release protected land such as cane fields. It is only through deep-rooted reform to land supply policies that underlying structural barriers to new housing supply will be overcome.
*Uncompleted lots have development approval but have not proceeded to survey plan certification.
**The land identified in the broadhectare study is the first stage in the land development pipeline. It includes parcels of land identified as suitable and potentially available for future residential development.
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Detached (New & Established) House In the year ending March 2016, there were 20,114 new and established dwellings sold on the Gold Coast. Of these dwellings, 9,133 (45%) were detached houses.
The Gold Coast detached housing market continued to strengthen and was one of the strongest market across Queensland over the past quarter. Sales growth has increased by 9.8% for detached dwellings over the previous year. At the same time, house prices increased by 6.6% to a median sale price of $575,000 over the same 12-month period.
Most transactions over this period occurred in the $500,000 to $1m price bracket.
Market trend indicators are clearly showing a market operating in a high demand environment. Median days on the market have contracted by about a week over the past 12 months, sitting slightly above one month. Median vendor discounting contracted to 4.2% (May 2016) and stock on the market and total listings have both shown a slight reduction.
The Gold Coast (detached houses) remain in the top five most expensive regions in Australia being 5th on the list behind Canberra (see adjoining graph).
