Housing lots shrink by up to one third
A new report says property developers are now producing smaller lots to encourage demand. Source: Supplied
NEW houses in Australia’s capital cities are being built on plots of land that are up to one third smaller than 10 years ago, says industry analyst BIS Shrapnel.
BIS Shrapnel’s report, Outlook for Residential Land, says property developers are now producing smaller lots to encourage demand.
The higher density of housing also boosts the developers’ revenues.
“Median lot sizes have shrunk by between 14 and 32 per cent across the capital cities over the last decade,” says the report’s author, Angie Zigomanis.
“Developers have tried to keep headline lot prices lower in order to keep the cost of a new house competitive with the existing stock in the outer fringe suburbs, thereby encouraging demand for land,” Ms Zigomanis, said.
The report said that Sydney and Perth are leading the way as demand for residential land picks up.
In Sydney and Perth, years of low new dwelling construction had resulted in a deficiency of housing.
Also, houses have become more affordable due to weakness in house and land prices and lower interest rates.
“The upturn in lot production in both Sydney and Perth is now well and truly underway,” BIS Shrapnel said.
A pick-up in Brisbane should emerge over 2013/14, but demand for land in 2014 is expected to remain subdued in Melbourne and Adelaide.
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