The vacant residential land market has picked up during 2013 with a record number of volume and transactions recorded however, despite the current low interest rate environment activity in 2014 has declined.
During 2014, $35.78 million in vacant land sales have transacted in 129 transactions within the Shellharbour LGA excluding Shellcove, down from $47.45 million in 2013, representing 55 fewer transactions. Historically, the volume of sales has hovered between 90 and 130 sales per annum (excluding 2013’s high) which averages around 9 transactions per month, the 2014 result, while down on last year’s high has resulted in one of the best years since 2005 in terms of transaction numbers and value achieving over 10 sales per month.
Shellcove has been excluded from this analysis which achieves a higher value compared to the broader Shellharbour market. Looking alone at Shellcove this market has been extremely active in 2014 with $42.05 million changing hands across 121 transactions; this is a record high for this market both in value and number of transactions. During 2014, 54% of all transactions in Shellharbour LGA have been within Shellcove, this can be attributed to the recent release of Red Sands (The Shallow and The Waterfront precincts) stages within the growing community. Encouragingly the total level of activity while down -5.4% on 2013’s high recorded still represents $77.82 million across 250 transactions being greater than 20 vacant land sales per month.
Considering the size of lots, there has been some change in the average lot size. Not dissimilar to the rest of the country, in order to maintain affordability the average lot size has decreased. The improvements in design and construction allows smaller lots to hold quality homes and as such the average size in this location of 634sqm (excluding Shellcove), this rate has remained reasonably stable over the past three years after falling from the highs of closer to 750sqm. When considering this change in lot size compared to Shellcove, demonstrates an interesting trend. While Shellcove has provided a premium lifestyle product given the surrounding amenity, marina etc, the smaller lot size has been commonplace in this community over the past ten years. While there has been some minor movement in sizes, the average lot size 615sqm has been maintained for this period and continues to do so with 2014’s average of 613sqm. The now closed gap between the broader Shellharbour market and Shellcove average land size could be answerable to the recent change in demand within Shellcove as their historically small lot size is now in line with the broader region.
While lot sizes area now similar across Shellharbour LGA (excluding Shellcove) and Shellcove the values continue to differ. During 2014 the average land value on a per square metre basis has increased in both locations, Shellcove yielding a better result up 11.88% over the year to $550/sqm, while the broader market saw a sizeable 9.25% annual increase to $438/sqm. Based on these results, the average lot value in Shellcove is just shy of $350,000 while the remainder of Shellharbour LGA provides a more affordable $275,000 lot price, a large differential given the similar lot sizes now on offer. According to IRIS, vacant land values across the Wollongong Statistical District (Wollongong, Shellharbour, Kiama, Wingecaribee, Shoalhaven LGA’s) for September 2014 now sits at $267,000 per lot, this representing a 4.70% growth in the 12 month period.