Last Wednesday’s auction saw almost two-thirds of packaged lots in Throsby fall short of their reserve price, circulating rumors that the price of land in Canberra may have already peaked. The price of these lots averaged $1,142 per square metre.
According to Master Builders ACT executive director Kirk Coningham, the price of land has become uneconomical for builders.
“It comes to the point where it just becomes too expensive to build a home and extract a profit, particularly on smaller blocks,” Coningham said. “When you’re getting over $1,000 a square metre, it’s some of the most expensive lands in Australia for residential building.”
Packaged lots were first released in February, and they netted almost $17 million—well above the reserve price. A further 106 residential blocks were sold that month, selling for an average of $108,000 over reserve for a combined total of $48 million. These single residential blocks sold for an average of $920 per square metre.
While buyers who want a piece of land in theses undersupplied areas are willing to pay these prices, builders are not too keen on it, especially since they need to turn a profit.
The rising cost of land was “concerning for the industry,” said HIA ACT/southern NSW executive director Greg Weller. In fact, more builders are looking outside the ACT for more affordable land.
‘Builders are finding it difficult to secure land that they can build an affordable product on,” he said.
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