‘Rightsizing’: property buyers forgo land size and focus on home inclusions

The developer of an award-winning community says there is renewed demand for smaller land lots, amid biting interest rates and inflation.

AVID project director Anthony Demiris said prospective buyers were focused on home inclusions, rather than land size, amid tightened borrowing capacity.

“The market has seen an important recalibration over the past six months or so, particularly for new home buyers who were being priced out of the market and pushed into an oversaturated rental space,” he said.

“It’s a normal occurrence in a slower market. Buyers are ‘rightsizing’ … they’re not necessarily happy about it but they still want the top-end housing inclusions, so in its place are forgoing land space,” he said.

In 2022, AVID was selling out of its largest blocks soonest. The developer reacted by reconfiguring 28 smaller blocks into 20 larger blocks at its flagship 4600-block community, Harmony at Palmview.

“(But) it’s now the opposite of what we were seeing prior to mid-2022,” Mr Demeris said.

“Buyers would rather have the butler’s pantry, floor-to-ceiling tiles and all the bells and whistles, and if that means the land they can afford is 100sqm smaller then they’re willing to make that sacrifice.”

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Harmony is one of the Coast’s fastest-growing estates.

AVID has seen sales for smaller blocks (under about 350sqm) trending higher in the 2022-23 financial year and inquiries for these block sizes increasing.

Mr Demiris said newly completed homes were hitting a sweet spot with buyers who were looking to get out of the saturated rental market.

“There is a rare window now where new home buyers can secure land at the right price,” he said.

“That said, demand remains and there is an entire industry still playing catch-up, so a bit of patience is needed.

“But the current market presents a good opportunity for those who want to lock in land at today’s price to settle in six or 12 months when we expect interest rates will start to stabilise, and once home builders have had the chance to work through the backlog.”

AVID Property Group is an Australian builder-developer responsible for residential masterplanned communities, houses and apartments, with 38 developments in key growth areas across Australia’s east.

Article source: Queensland Property Investor