Prices Reach Limits

Author:  Craig Binnie

Date:  Sun March 6, 2010

 

 

VACANT BLOCK PRICES	Cardinia	Casey	Hume	Melton	Whittlesea	Wyndham
2000	$44,000	$61,000	$63,000	$64,000	$85,000	$62,000
2005	$109,750	$139,000	$129,000	$115,000	$157,000	$125,000
2009*	$143,995	$175,000	$149,000	$125,000	$160,000	$152,000
Percentage rise over 10 years	227%	187%	137%	95%	88%	145%
Percentage rise over 5 years	31%	26%	16%	8.7%	1.9%	22%
JB Herald Sun 06/03/10 *Preliminary figures. Data sourced from Land Victoria, compiled by Oliver Hume Research

 

Values are rising across the outer suburbs, writes Craig Binnie. Herald Sun, 6^th March 2010.

House and land prices in popular growth areas rose more than 28 per cent in the past three years but buyers still get more value compared with places closer to the city.

 

The price of house and land packages is rising – and it’s the land element of the package that is forcing up prices – the cost of building has remained relatively stable – which is great news for existing owners and anyone who is holding land.

 

Prices in the Shire of Cardinia (Pakenham, Officer, Beaconsfield, Koo Wee Rup) have performed the best of Melbourne’s six designated growth areas – Wyndham, Cardinia, Casey, Hume, Melton and Whittlesea – in the past five years.

 

Buyers who paid the 2005 median of $109,750 have watched the price of blocks in Cardinia rise an average 6.2 per cent a year to $143,195, according to preliminary Land Victoria figures for last year.

 

City of Casey (Berwick, Cranbourne, Hampton Park, Lyndhurst, Lysterfield South and Narre Warren) blocks were the next best performers, up an average 5.2 per cent a year.

 

Land Victoria’s figures are based on settlements that can be more than a year behind current prices.  This means that in reality prices are higher than the figures reflect.

 

Oliver Hume Real Estate sales figures for the last quarter of 2009 show the median price reached $170,000 in Cardinia and $187,000 in Casey.

 

It says the Hume median is now $178,570 and it’s $122,000 in Melton, $175,000 in Whittlesea and $196,900 in Wyndham.

 

Of course, many properties sell for less than the median price.  In Cardinia, for example, blocks sold for between $122,000 and $219,000.

 

In Melton the range was $93,900 to $405,000 and it was $115,000 to $420,000 in Whittlesea, $147,000 to $410,000 in Casey, $115,000 to $600,000 in Wyndham and $148,000 to $280,900 in Hume.

 

The company’s general manager of research, Andrew Perkins, says in three years land prices in growth areas have risen an average 30.5 per cent and house-and-land package 28 per cent.

 

Based on sales contracts, the median land price in growth areas reached $180,000 last year and is expected to top $200,000 this year as supply tightens, Perkins says.

 

The good news for owners is that land prices in growth areas have risen consistently and avoided the volatility of the wider metropolitan market.

 

Despite growing demand for land, supply is slowing and prices will continue to rise.

 

During the past three years, the availability of lots in growth areas has fallen 55 per cent.  Last year, 23 new projects were launched, or about 7200 lots.  About 10,000 lots were released in 2007 and 12,980 in 2008.

 

In other words, anyone shopping for a new home or vacant block has a lot less choice than they had a few years ago.  And they will pay more.