If you are thinking about a home loan for property in the Baldivis area, you may want to pay close attention to this post. While the housing market has been “flat” for the last year in many parts of the Perth area, there is another market dynamic going on that could affect the way we buy houses in the coming years.
The Current Market
While home prices are level and even went down in some suburbs, land prices are actually rising. During a year in which the median home price was relatively constant, land prices for the Perth metro area increased 10.7%. Even as the vibrant market of Sydney dominates Australian real estate news, Perth now has the most expensive median price for a square metre of land in the entire country: $733.
The median price for a block of land in Perth is $299,000. However, the average land block is now 428 sqm. This is forcing builders to become more creative and try to build ultra-efficient, smaller homes that provide a similar living experience to larger homes. While thinner, rear-loaded lots were becoming more popular at first, developers are increasingly depending on front-loaded “squat lots.”
The Effects on the Market: Now and in the Future
The smaller sized blocks and homes are cheaper to develop and cheaper to build. This is resulting in more affordable housing, especially for first home buyers. However, population growth in Perth has stabilised and the mining slowdown is complete. The market correction for this is to develop less property.
What it Means to You
Currently, the average block size is less than half of what it was 30 years ago. We see blocks shrinking now, especially considering changes in the R-Codes for many councils. It may not happen right away but we expect that median to shrink further and further, with a possibility of the median being less than 300 sqm someday.
Call a Mortgage Broker at Smartline Rockingham for a Home Loan
If you want enough land to enjoy yourself, buy ASAP before the average goes down further and land prices rise again. Blocks are not going to start getting bigger anytime soon.
Call us today: (08) 9527 1800.