Southeast Queensland land prices jump as buyers vie for stock

Oliver Hume project marketing chief executive Julian Coppini said buyers were becoming more comfortable with interest rate levels.

Southeast Queensland land prices leapt in the June quarter, taking gains from the last 12 months to more than 14 per cent, as buyers adapt to higher interest rates and competition heats up for limited stock.

New data from property services group Oliver Hume shows the average price of a block of land in the region was now $380,640, up 11 per cent in the three months to the end of June, and up 14.3 per cent in the 12 months to the end of June.

Oliver Hume project marketing chief executive Julian Coppini said buyers were becoming more comfortable with interest rate levels and were willing to pay the higher prices needed to get into the market.

“While the pressure is easing, supply remains an issue in the southeast with simply not enough land available to meet the demands of a growing population,” Mr Coppini said.

“The southeast Queensland market is one of the strongest in the country and we don’t see that changing any time soon.

“The HomeBuilder initiative bought forward a lot of land releases across the southeast and was followed by a period of undersupply as developers had to react to bring pipeline projects to market.”

The average price for a block of land in Brisbane rose 5.42 per cent for the June quarter, and 18.67 per cent in the past 12 months.

Gold Coast went against the trend, as average prices fell 21.7 per cent for the quarter, and 4.02 per cent for the year. Its average price for a block of land was $595,000 at the end of June, below Brisbane’s $632,000.

Ipswich maintained its title as the most affordable local government area in the southeast, with prices up 5.3 per cent for the quarter, and 3.74 per cent for the year. Prices in the Logan local government area were up 2.4 per cent in the quarter and nearly 9 per cent for the year to $336,900.

Mr Coppini said it would take some time, but market conditions were returning to normal which meant buyers would have a wider range of choices.

“Many buyers are still concerned about factors outside of their control such as the lending environment and building prices but are seeking to mitigate this by focusing on homesites that are ready to build on in the next six months,” he said.

“Any homesite that is registered and ready to build is being snapped up very quickly and carrying a premium, which has helped drive prices this quarter.”

Oliver Hume manages project sales and marketing on behalf of some of the country’s leading developers, including Villawood, HB Land and ID Land.

Its research team tracks and analyses more than 3900 sales nationwide, including 1582 in Queensland in the June quarter. In June, the company released and sold more than 80 new homesites, worth $30m, across five different projects.

Oliver Hume Queensland general manager Dan Ross said the market was being driven by a mix of first-home buyers looking to get off the rental treadmill and second-home buyers looking to upgrade.

“The established home market in Queensland is very strong at the moment, allowing the owners of older homes to access significant equity gains and upgrade to a new home,” Mr Ross said.

He said homesites that were available to settle and build on in the next six to nine months were the most popular.

“There is still a bit of uncertainty for buyers around interest rates and building prices,” Mr Ross said.

“The more certainty they can build into the process around building contracts and settlement times, the more willing they are to proceed with their purchase.”