INDUSTRY NEWSNEWSQLD

Demand for Queensland land driving prices higher in growth corridors

A major shortage of land across South East Queensland’s growth corridors has driven up prices for new lots.

Land prices in some areas of South East Queensland have increased almost 30 per cent, while supply has been trending lower based on data from Oliver Hume.

Property group CFMG Capital said there had been strong demand for its latest land releases, with one project 80 per cent sold in just two weeks.

CFMG Capital General Manager Andrew Thomson said demand for land had been incredibly high since the launch of the Federal Government’s HomeBuilder scheme in 2020.

“CFMG, along with other developers, are really struggling to keep up with demand with every release we make being absorbed by the market very quickly,” Mr Thomson said.

“Everyone from first-home buyers to upgraders, investors and interstate migrants are all active in the market, which has created a very competitive environment.”

He said there was a strong combination of factors underpinning the demand, but Queensland’s relative affordability compared to other states was a key driver.

“Queensland’s population is continuing to grow thanks to strong migration from southern states, which added into natural population growth is creating a real shortage of land,” Mr Thomson said.

“Supply is also considerably constrained as developers deal with a raft of issues including weather delays, local government bureaucracy and access to construction workers and materials.”

Rampant demand for land across Queensland has been a key driver of higher prices over the past 12 months.

According to the latest Oliver Hume Quarterly Market Insights report, price growth continued in the Sunshine State in the three months to March 30 on the back of solid interstate migration, low levels of new stock and a number of premium developments hitting the market in Brisbane and the Gold Coast.

The median price for a block sold in South East Queensland increased more than 28 per cent, reaching $307,700, in the year ending March 30.

Low levels of new stock across key markets is keeping a lid on sales volumes with total sales in the South East Queensland market running below long-term average levels.

While demand is expected to remain resilient, Oliver Hume expects stock levels to increase over the course of 2022 as more projects and releases come online.

Oliver Hume Queensland Project Director Matt Barr said lot availability continued to be one of the key drivers of sale volumes with markets having more stock to sell also dominating sales.

“Many land projects are planning new releases that will help satisfy a lot of the pent-up demand for land in South East Queensland,” Mr Barr said.

“Securing land will remain competitive until those releases fully replenish stock levels, which we expect to happen around mid-year.

“Ipswich and Logan are the two growth regions that currently have the most amount of available stock and buyer interest has been focused on these locations.

“Ipswich recorded the highest market share accounting for 38 per cent of all sales in the March quarter, closely followed by Logan with 35 per cent of the market share.”

Oliver Hume Head of National Research George Bougias said low stock levels and Queensland’s high rate of interstate migration, had put upward pressure on prices.

“We expect more balanced conditions in 2022 which, undoubtedly, will be assisted by much needed stock coming to market,” Mr Bougias said.

“Beyond the regular cyclical trends we observe in all markets from time to time, we are very optimistic about Queensland’s prospects going forward.

​​“Queensland’s lifestyle and relative affordability is drawing more and more buyers and that’s been helping to push up land prices north of the Tweed.”

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Rowan Crosby

Rowan Crosby is a freelance journalist specialising in finance and real estate.