Gold Coast Land Supply More than Sufficient

My latest Prodap Report, released last week, confirms that vacant land sales on the Gold Coast fell to just 175 in the latest December quarter. This compares to 316 sales of vacant land in the September 2010 quarter and 324 sales in the December 2009 quarter. This is the lowest number of quarterly vacant land sales on record in 16 years!

The fall in the latest quarter reflects both diminishing activity by “spec” builders and the low level of assistance to first home buyers in the Gold Coast compared to other regional Queensland areas and also Victoria.

Currently, Gold Coast, Brisbane and Sunshine Coast first home buyers receive only the Federal Government grant of $7,000 when building or buying a home. Regional areas of Queensland, excluding Ipswich, Lockyer Valley, Logan, Moreton Bay, Redland, Scenic Rim and Somerset, receive an extra $4,000 on top of the $7,000 for new homes only. In Victoria, the first home buyers grant totals $20,000 for a new home and $26,500 for a new home in regional areas, including the Federal Government’s $7,000. Stamp duty rates are comparable in both states.

So, the Gold Coast is about $15,000 behind Victoria for first home buyer incentives, in addition to Victoria’s lower median house prices.

The Prodap Report also confirms that there is approximately 13 months supply on the Gold Coast for vacant land lots at current take-up rates, and approximately 11 months supply for new packaged housing lots.

But further significant land development in the immediate future could easily lead to over-supply, assuming demand does not improve over the next 12 months.

Indications from developers are that future land production over the next 12 months will reach twice the current level of annual demand.

New house and land package sales held up in the latest December quarter, but are still very low. This is despite the encouragement given to developers of new rental accommodation under the Federal Government’s National Rental Affordability Scheme, which is taking some time to sprout wings.

Want a copy of the latest Prodap Report? Visit our website at www.prodap.com or call on +61 755228755.