THE cost of residential land in Brisbane fell a massive 14 per cent last year with lots on the Gold Coast now more expensive than the Queensland capital. But the devil’s in the detail.
New data by Oliver Hume found buying a block in Brisbane set buyers back $358,500 at the end of last year – a median price drop of 14 per cent in just 12 months.
Land on the Gold Coast was $25,700 more expensive than Brisbane, according to the latest Oliver Hume Quarterly Market Insights, with the glitter strip pulling off an 8 per cent rise in median lot price to $384,200.
But Oliver Hume senior research analyst Amanda Bittenbinder said Brisbane’s massive median price decrease was not because of a struggling market but the type of blocks that were coming to market.
“The Brisbane market is shifting towards smaller lot sizes, due to land availability and affordability,” she told The Courier-Mail.
“Our data shows that 48 per cent of project land sales in Brisbane over Q4 2017 were between 301-400sq m whereas the Gold Coast recorded 52 per cent of sales over 500sq m.”
She said the Gold Coast had a higher median lot size than Brisbane.
Broken down, the data showed “the rate per sqm in Brisbane was $899/sq m in Q4, whereas the Gold Coast recorded $513/sq m – that’s a difference of $386 per sq m”.
In the December quarter alone, 1,956 lots were sold in South East Queensland, a fall of 5.5 per cent that had more to do with stock availability than demand.
Agent Tom Zhang of Yong Real Estate said demand was outstripping supply in Brisbane.
One of his recent sales included 6 and 8 Nabeel Place, Calamvale, which was part of a larger 1,400sq m block that a developer had bought for $1.1m.
“A developer bought it, they subdivided the rear 800sq m out and further subdivided that into two 400sq m blocks. For 400sq m that was selling for over $400,000 each. Those two blocks at the back sold for $800,000 and he still has the front house that will sell for more than $800,000. So his total income of over $1.6m minus development costs still ends up a fantastic return in a short period of time.”
He said “small to medium developers are so hungry for this type of product”.
“It’s easy to sell the land. The normal homebuyer can’t afford big blocks but a 400sq m block they might be able to. The worry now is the low supply of empty blocks of land in Brisbane and in the southern suburbs like Sunnybank and Calamvale.”
Redland – which includes mainland suburbs like Capalaba and Alexandra Hills as well as island suburbs like North Stradbroke and Coochiemudlo Island – had SEQ’s third highest block cost. Its median land lot was $312,000, a figure that had dropped 3 per cent last year.
Popular Moreton Bay – which covers a large area including Caboolture and Redcliffe – saw a 4 per cent fall to $238,000, while the second cheapest land lots in SEQ came out of Logan where the median was holding steady at $230,475.
The cheapest place to buy land in the region was Ipswich ($199,500), though that’s changing rapidly with the area posting the second highest cost increase last year (4 per cent).
Despite low retail land supply and strengthening demand, the median land lot price in Queensland was fell slightly to $260,500, the Oliver Hume report said – mostly because of shrinking block sizes.
Median Retail Lot Price:
Moreton Bay $238,000 (-4%)
Redland $312,000 (-3%)
Logan $230,475 (0%)
Brisbane $358,500 (-14%)
Ipswich $199,500 (4%)
Gold Coast $384,200 (8%)