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Is it time for a sustainable stimulus solution
30 July 2020
The Governments’ incentives to drive activity and growth in the property sector have been …
The Governments’ incentives to drive activity and growth in the property sector have been highly effective in achieving the desired outcomes. As a result, developers are calving through land stock to keep up with demand and builders are facing the pressure of delivering across the entire supply chain. So, is it time to look for a more sustainable and enduring model?
Boutique land developer, Monument, is facing the challenge of keeping up with demand more than most. The company specialises in high demand and limited supply land-sites located close to city in established areas– the likes of which will generally attract more attention to the buyer market.
Following consecutive government announcements to introduce a series of home building grants, the company was quick to experience a huge spike in interest and sales.
However, while the stimulus packages have been warmly welcomed by the sector, Mr John Wroth, Director of Monument parent company, M/Group, says it is time for the Government and industry to take stock and focus on a plan that supports the sustainable growth of the property sector.
“There has been an enormous response to the grants and incentives, and many land developers are running low of stock to meet the new demand. On the face of it, this is not a bad problem to have, although the pressure is now on to increase land production and deliver on home builds without impacting the cost to the buyer,“ he said.
“As developers fast-track new land stages, the question needs to be asked, what happens when the incentives slow down.”
Monument has recorded over 40 sales across its three boutique estates in the last month and has seen an increasing reliance on banks to speed up processing timeframes to meet the deadline driven requirements of grants. There are also fears that a pending lack of supply will create an imbalance in the market as the industry aggressively works to keep up with demand.
Mr Wroth believes the company’s predicament in achieving high sales volumes is not isolated and there could be risks associated with incentives being removed swiftly and without consideration of the impacts.
“The State and Federal Governments should be commended for acting quickly and decisively to stimulate the property sector. It is now critical for government and industry alike to consider the consequences of what happens next and what the impact will be on a sector that is so important to maintaining a buoyant economy,” he continued.
“There is an abundance of opportunities that could help to maintain the steady growth of the sector, including the slow pulling back of incentives, or even a capped program that is reoffered annually. The idea would be to continue the great work of government and maintain the growth of the sector in a measured and continuing way.
“This issue sits way beyond achieving good sales targets. It is something that will impact everybody.”
For more information visit www.landbymonument.com.au.
It’s a Race to Get the Best Sites at the Right Price
4 July 2020
The Governments’ incentives have created a flurry of buyer interest with Perth’s best homesites …
The Governments’ incentives have created a flurry of buyer interest with Perth’s best homesites being snapped up at pre-Covid-19 prices. However, as demand increases and stock dries up, buyers need to be aware of inevitable price increases that are likely to create an impact across the entire home building supply chain.
Since a consecutive string of government announcements introduced home building incentives to stimulate the economy, Perth developers have been working tirelessly to meet new demand from people wanting to take advantage of the incredible savings.
Of course, the best and most well-located homesites are attracting most of the attention.
Boutique land developer, Monument, is experiencing this more than most. The company specialises in boutique, high demand and limited supply land-sites located close to city in established areas.
In the past month, Monument has sold over 40 homesites across its three estates, and its sales consultants are taking new enquiries on a daily basis.
Mr John Wroth, Director of Monument parent company, M/Group, says while this seems like a good problem to have, buyers need to act fast in order to secure their home and land package before the industry responds to the increased demand.
“The response to the government incentives has been enormous, but the reality is that many developers had been running according to a measured release plan of land stock prior to the announcements, so the best available lots are now simply walking out the door,” he said.
“The process of new approvals is arduous and timely and in the case of boutique developments such as ours, there is only a limited amount of land we have available. While we have no intention of increasing our land prices, other companies will find it hard to avoid the pressure for builders to meet demand through their supply chain is likely to impact building costs.”
“It is imperative that buyers recognise the extraordinary buying conditions and ensure they are finance-ready to act fast in securing the best possible land package for their new home.”
Here are some tips to help you secure the best lots on the market.
- Bigger is often seen as better!
Larger lots continue to prove the most sought after and, as such, are often in short supply. While it may be easier to secure larger lots in the outer suburbs, value is always going to be on location so do your homework and buy wisely.
- Be on the front foot with frontages
Home frontages of 15m or more are rare and popular. They often have a wait list of multiple offers in place, so it is prudent to get in fast and secure one as early as possible.
- Be finance ready
Make sure you have your finance pre-approved and speak to your mortgage broker or bank before making the commitment to buy a lot. Being prepare not only gives you the buying power to secure the lot you want quickly, it also means you won’t miss out.
- Secure your building contract now
It is unlikely that Perth will experience better building conditions any time soon, particularly with incentives that could save up to almost $70k on a house and land package. It is therefore important to recognise that the cost of building a home is currently based on pre-Covid-19 prices and builders are only able to commit to these prices if you sign quickly.
- Location is everything
Don’t be bedazzled by low prices in large outer-suburb estates. Your money will work harder and your home will be valued higher in the long-term if your land is surrounded by established infrastructure. You’ll also have the benefit of not having wait years for it to arrive.
- Don’t settle for second best
Monument offers a range of homesites across three well-located environments at various stages of development.
Atop in Beeliar is currently selling elevated, ocean view and park side lots in Stage 2 and 3 from $304,000, with Stage 4 scheduled for release and ready for titles by November. This stage will offer ocean view lots from $298,000.
The Wedge in Wellard North incorporates a community park, playground and walk trails, and is surrounded by the natural bushland of Bulrush Nature Reserve. It has sold out of Stage 1, and will have titles in place for Stage 2 in October. Lots are available from 375sq.m to 537sq.m with prices starting from $174,000.
Finally, the company’s inaugural land estate, Hamelin Park in Secret Harbour. It is just three-minutes from the beach and only has six lots left, which are priced from $194,000.
All Monument land estates are designed to impress and are located in well-established suburbs with shops, good schools, public transport and employment at your doorstep.
For more information visit www.landbymonument.com.au
Government Grants a Welcome Injection for Land Buyers
20 June 2020
Government incentives to buy land and build new homes has sent demand for land skyrocketing, …
Government incentives to buy land and build new homes has sent demand for land skyrocketing, according to Perth land developers.
“We are only weeks in from the state and federal governments’ stimulus announcement and the response has been significant,” Monument parent company M/Group Director John Wroth said. “So much so, that we expect to sell our current stock across all projects within a month.
“This is absolutely monumental. People are quickly responding to the prospect of up to almost $70,000 in incentives. Those who previously could only budget for outer-fringe areas might now be able to afford the more desirable land close to the city such as Beeliar, Piara Waters and Treeby.”
“However, this is a finite window of opportunity and I would strongly encourage anyone looking to get a foothold in the more sought-after areas to act quickly before prices adjust to demand.”
Cuttone Property Group Managing Director Phil Cuttone has also witnessed a significant growth in interest.
“We are seeing a significant spike in sales with most developers having to now consider constructing more lots to bring on new stock as quickly as possible before the December 31 grants deadline,” he said.
“The next three to four months should see titled stock being depleted across all urban areas around Perth, especially in affordable first homebuyer areas.”
“Lifestyle areas such as North Dandalup and West Pinjarra are also benefiting from land uptake where a significant increase of sales is evident.”
While this current period may be welcomed by developers, the future of the land market is dependent on a number of factors, from employment and migration growth to affordability, according to Mr Cuttone.
“Once we can look beyond the COVID-19 implications, the outlook may be positive in Western Australia compared to the eastern states, where the land prices have been at artificial highs compared to Perth which has experienced the opposite,” he said.
“I have an optimistic view of the recovery in the Perth land market for the future, anticipating that land prices will be steady for the next few years after the end of the grants, given that there is an oversupply of affordable land coming onto the market in the future.”
Mr Wroth said while land stock was being quickly bought up, buyers were spoilt for choice.
“Land buyers are certainly not starved for choice with four corridors of development and some very attractive infill land sites on the table,” he said.
“The market shake-up could have some impact on zoning, with some high-density zoned sites possibly changing to direct land subdivision.”
“However, this will all be dependent on the state and federal governments’ ability to maintain demand and stimulate the economy through the job creation, migration and improved relations with our South East Asian neighbours.”
“It is important to recognise that the property market is strong aligned to a good economy.”
The land market has been performing well recently, according to REIWA data witnessing 5049 sales for the year to March 2020, with a median price of $248,000 and 5.1 per cent change in prices for the year.
Piara Waters and Baldivis we two hotspots for land sales, witnessing 201 and 192 sales, respectively.
While the average days on the market for the land was 60, some areas like Bedford and Kinglsey witness an average of 299 and 329 days on the market, respectively.
Most areas of Perth have seen price increases, with Perth south eat witnessing a 7.1 per cent increase for the year, while the inner suburbs or Perth suffered and 10.1 per cent decrease.