Investing In Land Developments

It appears that the number of housing starts right across Australia has been on the rise for some time and the expectation is that 2010 will see some very strong demands in this area of residential properties.

The Australian Bureau of Statistics does however predict that figures will slow as there has been a slower rate of land development for housing.

In Western Australia and Queensland housing starts are still well below the demand for growth in both states and in the near foreseeable future it does not appear that the housing starts will meet the growth figures.

For property investors this could be an area to look at as low availability of land for housing starts will mean that land prices will be high and as the land is developed in these areas the prices should, by all accounts increase quite rapidly due to demand of completed homes.

Consideration could be given to purchasing land (if you are lucky enough to get your hands on it) and contracting a builder or to purchasing a house that a builder is building. Or alternatively contacting one of the big land developers and see what options there are for you.

Just for an example there is a subdivision on the Sunshine Coast, Qld, due for sale soon where land was only $75,000 – $90,000 some 8 years ago which is now being listed at $219,500. This is purely a supply and demand price.

It takes so long for subdivisions to be developed that it is not expected that the land supply will be eased any time soon in any particular area.

The Australian Bureau of Statistics reports that loans issued for construction of new homes to have risen 9.2% last October following a 9.8% rise in September. This is more than double those issued in August 2008. These figures substantiate the growth that Australia has been experiencing in the real estate market during 2009.

Is this an avenue for Australian property investors to take advantage of?

Filed Under: Property Investment Tips

Tags: Land Development • Property Investment • Property Investors