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Buyers make the most of market conditions 18/06/2016

It is interesting to analyse the latest land sales figures in the context of how purchasers are making the most of what is essentially a buyer’s market.

It is interesting to analyse the latest land sales figures in the context of how purchasers are making the most of what is essentially a buyer’s market.

UDIA’s March 2016 edition of the Urban Development Index shows that while lot sales in the Perth and Peel region were down 28 per cent on the previous year, those buyers still in the market are taking advantage of current conditions and opting for larger or possibly more premium blocks of land.

We can see this pattern emerging by looking at the average size of lots sold which has slightly increased in three of the five growth corridors. This is particularly the case in the North East, North West and South West metropolitan areas.

Another positive in relation to quieter market conditions is that supply is starting to catch up with demand. This is following a period where strong population growth and a booming resources sector meant that developers were struggling to ensure adequate housing supply.

The number of lots on the market is up 15 per cent on the same time last year which means more choice for buyers.

The number of lots under construction in the Perth and Peel region for release in the coming twelve months is down by 29 per cent. Given decreased buyer demand, this figure shows we are heading toward a period of relative equilibrium between supply and demand, which is a big positive for sustainable housing supply moving forward.

In terms of the areas buyers are most active, the City of Wanneroo remains the top growth area with a 24 per cent share of all sales occurring in the Perth and Peel region. Wanneroo also has the most lots under construction in a single local authority for release over the next year.

The City of Swan also remains a growth hotspot with 21 per cent of sales occurring in that local authority.

Heading south, the City of Armadale was home to 20.5 per cent of all sales in the Perth and Peel region with an average price of $244,681.

The shire of Serpentine-Jarrahdale is where to look for the cheapest land, with an average price of $199,494. The average size of land in this area is around 430sqm which means you are looking at paying $462 per sqm, well below the Perth average of $669 per sqm.

If you want to know where future supply is located, the South West Metro corridor constituting Cockburn, Kwinana and Rockingham combined has the most lots under construction for release in the coming year.

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