Perth’s new housing estates attract overwhelming demand,
The asking price for vacant lots in new Perth housing estates is rapidly increasing.
Some properties have seen a 20 percent rise in just the past three months, according to industry insider reports.
Chris Hinchliffe, director of Herron Todd White, noted that house prices have surged dramatically since 2020.
However, land prices remained relatively stable until last year, when significant changes began to occur.
After nearly a 10 percent growth in the last quarter alone, the outlook for land prices is shifting noticeably.
According to figures from the Urban Development Institute of Australia WA, new land prices in the metro area are rising steadily.
Currently, the average price for new land now exceeds $300,000, with rates above $800 per square metre.
Hinchliffe emphasized that these prices have not been seen since the economic boom of 2007.
Given the challenges developers face in keeping up with demand, it’s no surprise that supply shortages are driving prices higher.
For example, the southern suburb of Baldivis, once known for declining values, has now become one of the hottest markets.
“Baldivis has transformed from a semi-rural suburb into a residential area over the past 18 years,” he explained.
It continues to offer some of the only steadily available land options in Perth, making it attractive to buyers.
Hinchliffe cited the case of 6 Chadstone Way in Baldivis as a reflection of current market trends.
The 451 square metre lot sold for $292,000 in June, up from $199,000 in October 2023.
This represents a remarkable 47 percent increase in value since it was purchased directly from the developer.
A similar situation is occurring in Armadale, where it was once challenging to sell any vacant blocks.
Recently, however, the suburb has experienced a rapid rise in popularity due to more affordable property prices.
“Armadale has always had a significant number of properties with development potential, but conditions have rarely favored development,” he noted.
He highlighted a particular block on 7 Wungong Road, originally a 787 square metre lot facing a train line.
This property sold for $210,000 in June 2023 after only 24 days on the market.
Since then, the lot has been subdivided into three separate lots, each selling for $155,000 in June 2024.
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Hinchliffe mentioned that vacant land is currently scarce in older, established coastal suburbs. This includes areas such as Two Rocks to the north.
Additionally, there are southern suburbs near Mandurah, which include Silver Sands, San Remo, and Halls Head.
Recently, newer developments in outer suburbs are providing smaller lots. These lots typically start from around 300 square meters in size.
Estates such as Seaside in Madora Bay, Ocean Hill, and The Gardens in Lakelands are selling out rapidly.
Moreover, Florida Beach and Melros Beach in Dawesville are experiencing similar quick sales.
“If you’re interested in these areas, you must act fast,” he explained.
“Most stages sell out quickly, with sold stickers being placed on boards as soon as they open,” he added.
On Wednesday, the UDIA WA published a new report. This report indicated that the state government could unlock residential land.
It suggests boosting housing supply by approximately 90,000 homes. This could occur in key growth corridors such as North Ellenbrook and Bullsbrook.
Other areas mentioned include East Wanneroo, East Wellard, and Mundijong. This could be achieved through a $420 million infrastructure program.
Chief executive Tanya Steinbeck noted the infrastructure requirements that were identified. These primarily include wastewater pump stations and trunk mains.
Additionally, power substations and feeder networks are also needed. Intersection and road upgrades are necessary as well.
“WA has the fastest-growing population in the country,” she stated.
“There are numerous job opportunities available, and our economy remains strong. However, the problem is the housing shortage.”
“There is a common misconception in Perth about the availability of land,” she continued.
People believe that land zoned for urban use is abundant and easy to bring to market.
“However, the reality is that numerous constraints exist on this land,” she explained.
These constraints range from infrastructure issues to environmental concerns.
Since September 2022, Perth’s greenfield land market has seen strong growth in demand.
However, dwelling approvals, commencements, and completions are significantly below the long-run average.
Across the March and June 2024 quarters, lot availability has fallen below record lows seen in 2006.
Steinbeck emphasized that while the report focused on new housing supply, infill development remains essential.
The UDIA acknowledges that infill development is a critical aspect of solving the housing supply puzzle.
