BENCHMARK HAS MOVED

The HomeBuilder effect means eager buyers outstrip available lots

This past week has felt like I should be out at sea … and not for its rugged connotations and the leisure of a fishing rod and cold “brewski” or three. But rather, because I seem to be spending an inordinate amount of time looking for land as eager buyers outnumber available lots on the market.

If ever there was a case study for the federal government to attempt to work out exactly where their stimulus money was best spent, it’s this moment. Something tells me it would be hard for them to go past the HomeBuilder grant and the snowball effect it’s had in conjunction with other state government boosts.

It’s been just over 90 days since the HomeBuilder grant became available, the Cairns real estate market has changed dramatically, with land that has been ticking along in slow motion now speeding away at pace. Not only are we witnessing land being snapped up in timeframes unheard of these past few years, we’re also experiencing a level of price growth that has also been severely lacking up until now.

Land in that sub-$400,000 house and land price is almost impossible to find now, with just a handful of land lots within the region under the $150,000 mark. In areas where that price point is still achievable, both home and lot sizes are reduced, compared with 12-18 months ago.

While the HomeBuilder grant is due to finish at the end of the year, its long-term effects on the price of land are likely to stay around for some time. Even as developers have dialled up resources to match demand, new benchmarks have still been set in several areas as supply fails to satisfy the market.

And while HomeBuilder developments will fade out, we’ll still see a gap between developed land and market demand for some time, which should maintain that new pricing and more.

There’s an incredible opportunity for those with good-quality land to achieve a premium price or value add in the current market. High demand and tight supply is already a great set of conditions, but combined with the Cairns Regional Council’s new policy to encourage development by waiving infrastructure charges in some cases, those with larger blocks can now subdivide at a significantly lower cost, retaining their home and freeing up cash.

Looking to take advantage?

Talk to your friendly REIQ local agent or town planner today.