There’s an old saying that “they’re not making any more land”, but does that mean vacant land in Queensland is a good investment?
And what about the proposed changes in the federal budget which potentially limit deductions on vacant land for investors?
Right Property group director Victor Kumar said vacant land could produce results with one investment strategy involving buying residential blocks of land before the titles had been registered by the developer.
“Effectively, you’re buying land off the plan but it’s important to understand that there are pros and cons to this strategy,” he said.
“The pro is that if it’s in a high-demand area and you’ve bought during the early stages of development, you tend to make some money.
“Naturally, because you are very much dependent on how fast the developer can register each block, you’re at the whim of the market, which can be catastrophic if the market hasn’t gone your way, and if you aren’t quite financially ready.”
He said another strategy was to target greenfield sites ripe for subdivision — but investors had to have the cash flow to make it happen.
“Greenfield rural sites can be bought for an affordable price but if you can’t get the subdivision approved you need to have the money behind you to fight all your way up to the environment court if necessary,” Mr Kumar said.
“A better strategy is to target infill sites within already established residential areas or buy a property on a larger block and subdivide.”
Mr Kumar said the proposed changes announced in the federal budget, which would potentially impact the tax deductibility components of vacant land such as interest repayments, meant investors must now seriously consider the holding costs before proceeding with the strategy.
Real Estate Institute of Queensland spokeswoman Felicity Moore said Queensland first-home buyers were keen on vacant land, partly because of the opportunity to offset the cost with the first home owners’ grant.
Prices for vacant land have been increasing across the south east, she said, with Moreton Bay and the Sunshine Coast in demand from their growing populations.
Banksia Beach on Moreton Bay’s Bribie Island had recorded strong growth, she said.”This land ticks a lot of boxes – waterfront, prestige, and within close proximity of infrastructure,” Ms Moore said.
“Most of these land sales, if not all, are part of the Pacific Harbour development, which offers marina berth blocks from $386,000 and just 50 minutes from Brisbane, which is an easy commuting distance for most.”
Strong vacant land performers over the past five years included Peregian Springs and Bli Bli on the Sunshine Coast and Springfield Lakes in Ipswich, she said.
Gordonvale in Cairns has also been in hot demand, she said, with first home buyers picking up affordable vacant land in a failed development site.
“The majority of buyers, about 75 per cent according to local agent Tom Quaid, have been first-home buyers who are getting better value in Gordonvale than they would just about anywhere else in the region. The block sizes are larger, and you get more bang for your buck,” she said.
Looking for vacant land? Here’s some suggestions:
18 Kingsley Terrace, Wynnum
Vacant land with a sea view: 18 Kingsley Terrace, Wynnum. Photo: LJ Hooker Wynnum
Offers over $650,000
405 square metres
Agent: Murray Mercer, LJ Hooker Wynnum, 0413 702 222
If you’re after beautiful sea views and bay breezes, this 40-metre by 10-metre block has all the services connected and ready to go. Located in the sought after terraces precinct and walking distance to the waterfront and cafes, it’s considered entry level for land of this calibre in the area.
90 High Street, Mount Gravatt
Up among the treetops: 90 High Street, Mount Gravatt. Photo: Ray White Mount Gravatt
Offers over $339,000
405 square metres
Agent: Grant Boman, Ray White Mount Gravatt, 0413 381 434
This elevated site on the hilltop of Mount Gravatt would have to be one of the most affordable blocks of land on Brisbane’s southside. Set among the treetops with stunning urban views, it has oasis potential but it will require more than just a basic project home.
49 Sirius Street, Coorparoo
Blue chip status: 49 Sirius Street, Coorparoo. Photo: Harcourts Property Centre
Buyers in the mid-high $1.1 millions
809 square metres
Agent: Trent Powles, Harcourts Property Centre, 040 861 173
The house has been cleared and the block terraced, ready for a new dream home in Coorparoo’s most desirable precinct. This is blue chip land already surrounded by multi million-dollar homes.
4 Venus Street, Ashgrove
Whisper quiet and leafy: 4 Venus Street, Ashgrove. Photo: Place Newmarket
Buyers guide: $575,000 to $600,000
405 square metres
Agent: Ashley Horswill, Place Newmarket, 0403 042 821
In this peaceful and very private cul-de-sac, this infill block is minutes from some of Ashgrove’s best schools, parks and cafes. It has an east rear aspect and gentle slope to the street.