Vacant land values soar as supply dries up and projects get shelved

Southeast Queensland vacant land values have soared amid concerns some areas will run out of land within years, and developers pull the pin on hundreds of projects across the state.

A shortage of vacant land and huge buyer demand has seen median land values across southeast Queensland soar 27.3 per cent over the past 12 months.

And exclusive new data from Oliver Hume shows that the median value for a vacant block across all land sizes shot up 6.4 per cent in the last three months alone, despite interest rate hikes and inflation.

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This 407sq m block at Graceville could be yours for an offer over $1.25m

It comes as a separate report by PRD shows that the value of residential construction spent in Queensland fell 15.8 per cent in the six months to March.

“The increasing number of residential projects either delayed, deferred or abandoned has

resulted in a supply issue for ready-to-sell stock, and even more so for detached dwellings,” the report said.

At Runaway Bay, this 617sq m block is listed for $5m

Analysis shows 111 new residential projects across Greater Brisbane have updated their status to ‘abandoned’ since January 1, while 157 have been ‘deferred’.

Deferred projects include the Cedar Woods Greville townhouse project at Wooloowin, the Oro Newstead mixed-use development and the Trilogy Apartments at Kangaroo Point, according to Cordell Connect.

Cedar Woods has shelved its Greville, Wooloowin development. Picture David Clark

In the regions, 63 projects have been ‘abandoned’ and 86 ‘deferred’ since the start of the year.

Property Council of Australia Queensland executive director Jen Williams said Queensland was in the midst of a “housing affordability and availability crisis”.

“No developer wants to pull the pin on a project as it costs a lot of money to hold land, but if they don’t, they would go broke,” she said.

Property Council of Australia's QLD Executive Director Jen Williams Pics Tara Croser.

Ms Williams said the perfect storm of rising costs, supply chain issues and labour shortages came at the worst possible time, as the rental crisis deepens.

She said bold moves were needed to address the crisis, adding that while overseas skilled workers were needed, they would also need a roof over their head.

It was recently revealed that Noosa could run out of residential land by February and supply could dry up on the Gold Coast by June 2023.

There is not much land left to develop in the Noosa region. Credit Tourism and Events Queensland

In Brisbane, the short-term supply of land for residential purposes could be depleted by December 2024.

Those numbers are well below the short-term land supply benchmark of four years, and it is not much better for the wider Sunshine Coast region (3.1 years), or those looking in Moreton Bay (4.1 years) and Logan (4.3 years).

On 1253sq m, this Noosa Heads block is listed for $2.5m

Deputy premier Steven Miles, who is also the Minister for State Development, told Senate Estimates that southeast Queensland had at least 15 years of long-term planned residential land supply, but that some councils had fallen below the minimum four years required for short-term land supply.

“Clearly we need to continue to work with local governments to assist and support them to increase supply,” Dr Miles said.

Steve Miles . Photo Steve Pohlner

But the devil is in the detail, with the supply levels likely much more constrained as developers defer or abandon projects and bank the land for future use.

A search of realestate.com.au shows there is just 14 listings for vacant land in the Noosa shire, with prices ranging from mid-$800,000s for a 600sq m block at Tewantin to $4.8 million for a 519sq m block at Sunshine Beach.

At Sunshine Beach, this 519sq m block comes with a DA-approved (pending) design from award-winning Paul Clout for $4.8m

In the wider Sunshine Coast region, a 522sq m block at Nambour is listed for offers over $299,000 – the cheapest of the lot.

On the Gold Coast, land in The Arbour at Burleigh Heads will cost north of $749,000, with lots starting from 600sq m, while a 2784sq m vacant block at Runaway Bay is listed for an eye-watering $15,000,000.

The surge in demand for land has seen buyers camp out at new land releases, and developers hold lotteries for land releases.

Hopeful buyers have taken to camping at Palmview's Harmony Estate whenever there is a land release.

“The data the government uses doesn’t take into account the incredible demand we have seen and that land has been consumed much faster than their forecasts,” Ms Williams said.

“We have projects that were meant to have a 10-15 year lifespan, coming to an end now as releases were brought forward to meet that demand.

“While you could never foresee the issues facing the industry and community right now, the reality is that we haven’t been properly planning supply for a long time.”

The Pacific One Gold Coast showroom and site in Frederick St Surfers Paradise after the tower was canned last month. Picture Glenn Hampson

Ms Williams said that other than a greenfield site at Caboolture West, the industry was largely in the dark about where the next “urban footprints” could be.

She said there were “lots of areas” they were concerned about in terms of housing supply, and communities were already under immense pressure.

“It takes an average of 10 years from the time when land is identified to actually getting it to market, to getting a lot to put a house on,” she said, adding that opposition to new developments was shifting as the housing crisis affected more people.

“They are now seeing we need some big, bold decisions to get us out of this spiral of homelessness, of essential workers, families, living in caravan parks and cars.

“We don’t have time to sit back and go through the normal planning process that takes 10 years. We need to get things happening now.”