Previously sleepy property markets in Western Australia’s north are experiencing an awakening, with real estate agents in Broome and Karratha reporting an upswing in sales.
Contributing to the stimulus is the State Government’s $116 million Regional Land Booster Package, which has reportedly led to a significant sales surge for country lots.
Pilbara Real Estate Director Rob Sleator said government spending was a bonus to a market that had already started to thrive after a long-term slump.
“Sales have increased exponentially over the past 12 months, whereas prior to that land sales were few and far between,” he said.
“There were a few mortgagee in possession land sales, but in summary the cost to build verses buying established homes was too far apart.
“No bank would finance a house and land package that was going to cost $700,000 but the value would only be $500,000.
“However, the established market has been improving for the last three years. Now building verses established is a lot closer in price. Larger blocks of land started selling mid to end of last year.
“We’re seeing young families mostly, a few people who have moved due to COVID-19 and activity due to a mining industry shift from FIFO to residential workers.
“The big change I see is that investors are now back in force and looking for nine to 10 per cent returns.”
PRD Real Estate Director Andrew Blackley said there had been similar stagnation in the Broome market prior to COVID-19, with land sales very low.
According to the agent, established properties listed for sale were largely priced well below replacement cost, which meant buyers were incentivised to buy and renovate, rather than build.
Federal and state grant money has largely closed the gap between buying and building in Broome and has encouraged many first-time buyers who had been renting in the beach resort town for a number of years to take the plunge.
“Enquiry and sales in general have been fantastic over the past few months,” Mr Blackley said.
“Rents are still strong, so investors can see very good returns in long-term leased investment properties, and actually there are only approximately 45 properties available for rent in all of Broome at present.
“We have also been getting a number of sales and endless enquiries from retirees looking at a holiday home-type property in Broome.
“We have strata-titled resort units which are perfect for this scenario.
“The owner can stay up to three months of the year in their unit and rent it out the rest of the time they aren’t here.”
Also running hot with inquiries is DevelopmentWA, which has sold 40 lots in country WA and experienced a fourfold increase in regional inquiries.
The developer sold land in Kambalda, in the Goldfields, for the first time in 13 years, and sales in Broome and Karratha were recorded for the first time in six years.
The developer received offers on 18 lots in Karratha’s Madigan residential estate at Baynton West within one week of the July 15 rollout of the Regional Land Booster Package.
DevelopmentWA has released an extra 15 lots to meet demand in Karratha alone, with purchasers required to build on the land within two years to kick-start movement in the construction sector.
The Regional Land Booster package comes in addition to the State Government’s Building Bonus grant and the Federal Government’s HomeBuilder grant, enabling eligible land buyers to receive up to $69,000.