Steady as she goes for buyers in search of land | Ralph Lauren

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If you are seeking out land in the current market, you may be wondering where to start your search and what to expect when it comes to pricing.

West Real Estate spoke to industry experts about the current state of the land market and what was expected going forward.

Looking over the first three months of this year, Satterley CEO Nigel Satterley said the north-east corridor and masterplanned communities along the coast were the busiest areas in respect to land sales.

“The busiest growth corridor in Perth is from Caversham north to Vale Aveley and Upper Swan,” he said.

“This has been the busiest corridor for the last three years. The northern beaches from Burns Beach Road to Yanchep and Two Rocks has also really picked up in volume over the last nine months.”

Mr Satterley said these sales looked to be steadying, however.

“Since the large spike in land sales in June and July 2020, the market is generally settling down in the growth areas to around 450 net sales per month,” he said.

While there is limited vacant land supply in the inner-city suburbs, Mr Satterley noted there had been a substantial pick-up in bowl-over-and-rebuild activity, running at around 55 sales per week.

“Going forward, based on the current population growth and economic conditions, we see the Perth growth areas selling annually at 5200 to 5500 net sales per annum,” he said.

When it came to homebuilding, Mr Satterley said there was a slight discrepancy between house prices and the value of the land.

“This is interesting as the established house prices in growth areas are recovering – probably by 10 per cent in the last 12 months,” he said.

“Homebuilding prices have increased seven to 10 per cent in 12 months and land in most areas hasn’t increased in value.”

REIWA Vice President Joe White said over the first three months of the year, land prices were reasonably steady, and the declining number of listings was expected.

“I don’t think there’s a supply problem in land, but there is always a lead time in getting titles and that’s what’s keeping the prices reasonably level against the building prices, which are obviously moving upwards due to an overstretched construction industry,” he said.

On the other hand, Mr White said REIWA’s point of view was there was a housing supply crisis, with rising population meaning there were not enough roofs for everyone.

“We want to see as few bottlenecks and constraints in the supply pipeline as we possibly can so the time from someone buying a block to getting the keys to their house is the least amount possible,” he said.

“Every one of these houses that gets handed over at completion, whether it’s an owner-occupier or whether it’s an investment property to be leased out, it’s still one more house, which means there’s one more family that’s accommodated, and the pressure will come off the rental market because that house exists.”

Mr White said despite the current crisis, he was quite optimistic.

“We are working through it, so as bad as it is, the solution is evolving and I think probably come August/September when we some of the houses completed, we’ll see pressure come off both price rises on houses and also the rental accommodation issue,” he said.

“The rental accommodation is our biggest ulcer at the moment.

“In reality it’s just that it’s increased here that people are noticing a difference, but by comparison to other states, it’s still about the cheapest. But that said, we’ve got to address it, as there are so many things which can be done better.”

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