THE PROPERTY DEVELOPMENT REVIEW
Development Areas of SEQ or through Melbourne’s growth corridors, the cost to unlock supply and pull forward services to many of these sites is cost- prohibitive without scale and thus, we’d suggest that if you can find land which ticks all these boxes then it will be highly sought after. Throughout the year, have you noticed a shift in time on market for development sites? If so, how is this shift affecting your approach sales campaigns? We’ve had several campaigns which have transacted at the culmination of a 4- or 5-week Expression of Interest process with strong competition and we’ve also had several that haven’t received the same level of competition and have required longer timeframes to transact. Whilst dollar per sqm greenfield land rates have largely remained unchanged, settlement times frames have pushed out to accommodate the market. It really comes down to the planning status of the property and whether the Vendor is willing to meet the market on commercial terms. With regard to changing our approach to sales campaigns, we approach properties on a case-by-case basis; Expressions of Interest campaigns remain a very successful method for transacting development land as it offers flexibility to the market on price, terms and
deposit structure and we’ve noticed Vendors enjoy the process as they can assess a variety of offers in a non- pressured environment. What advice do you have for any prospective developers in the current climate? What you are seeing is a healthy market correction from the pull forward demand from the pandemic stimulus and an unsustainable low interest rate environment. Underlying fundamentals of supply and demand remain unchanged, and Australia is facing a chronic housing shortage. There are always opportunities in any market. If you’re looking to set yourself apart when purchasing an on- market opportunity, complete as much due diligence as possible during the campaign; we’re seeing vendors take a slight discount to their price if there are unconditional offers on the table.
August / September 2023 – 43
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