This past week has felt like I should be out at sea – not for its rugged connotations and the leisure of a fishing rod and cold beverage or three, but because I seem to be spending an inordinate amount of time looking for land as eager buyers outnumber available lots.
If ever there is a case study where the Federal Government looks back on this time and tries to work out where their stimulus money was best spent – I think it will be hard for them to go past Homebuilder and the snowball effect its had in conjunction with other State Government boosts.
In the space of just a few short months (literally, its been just over 90 days since Homebuilder went into effect), the Cairns real estate market has changed dramatically, with land that had been ticking along in slow motion now speeding away at pace. Not only are we seeing land sell in timeframes unheard of in the past few years, but we are also seeing a level of price growth that has also been severely lacking up to now.
Land which fits in with that magic sub $400K H&L (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 to 12-18 months ago.
While Homebuilder 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 dialed up resources to match demand, new benchmarks have still been set in a number of areas as supply fails to satisfy the market. While Homebuilder will fade out, we will still see a gap between developed land and market demand for some time which should maintain that new pricing and more.
While 2020 might be remembered with a few choice adjectives, there is 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 local agent or town planner.