Land sales to investors have tripled across SA in the past month, new data shows. Picture: Getty
South Australian homebuyers have been dealt yet another blow, with new research showing land sales to investors have tripled in the past month.
In a swift response to the federal budget’s negative gearing changes, investors have turned their sights from established property to new builds, with Oliver Hume’s latest market update revealing 38.1 per cent of land sales last month were to investors – a massive jump from just 12.9 per cent in May.
New home and land packages are typically cheaper than buying established property, making them an attractive proposition for cash-strapped homebuyers.
However, SA has a scarcity of vacant land and increased competition from investors would undoubtedly raise prices, which had already experienced “extraordinary growth’’, rising by more than 30 per cent across the Adelaide region in the past year, said Oliver Hume chief economist Matt Bell.
Oliver Hume chief economist Matt Bell. Picture: Supplied.
“Investors coming into that (land sales) market in increased numbers are going to keep pressure on prices high,’’ Mr Bell said.
“In the end, it still comes down to supply and if Adelaide cannot supply enough land then price growth will remain quite high … which isn’t going to help first home buyers.’’
Mr Bell predicted the proportion of investors buying land would continue to climb in coming months but doubted they would reach levels that outnumbered owner-occupiers.
He said the change in investor focus would create a small silver lining for owner-occupier buyers, with more established properties available to them.
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“The mitigating factor for first home buyers or owner-occupiers is a lot of those investors (now buying land) are investors that would have purchased in the established market otherwise, so it is opening up one market a little bit while making it a little bit harder in the other market,’’ Mr Bell said.
Ray White Semaphore sales agent Heather Montemayor said buyer interest in a rare 175sqm Ethelton block of land, to be auctioned this Wednesday, had been evenly split between investors and owner-occupiers.
“The response has been phenomenal,’’ said Ms Montemayor, who attributed the strong investor interest to the federal budget changes, which will now see negative gearing tax benefits applied only to newly-built homes.
Land was already in short supply across SA.
While there has been no advertised price guide for the land, which due to grandfathering is much smaller than Port Adelaide-Enfield Council’s usual 250sqm allotment requirements, Ms Montemayor said investors, in particular, had indicated they were prepared to pay in the low-$300,000-range.
Concept plans arranged by Ms Montemayor showed the block could support a two-storey, three-bedroom home, including a master suite with a walk-in robe and ensuite, and a double garage.
“It (the tiny block) packs a lot of punch. It’s a pocket rocket,’’ she said.
“One guy (investor) has called me three times and he’s … very, very keen (to purchase it).
“I’m really hoping for a great price.’’
– Lauren Ahwan
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