A regional land boom could make a patch of dirt in Ballarat’s new housing estates worth as much as those in Melbourne by Christmas.
Other regional centres within striking distance of the capital are also at risk of home price booms that could cause a years-long affordability crisis.
Analysis by Research4 director Colin Keane shows Ballarat’s average block has soared from
$175,000 to $260,000 since the pandemic hit. He predicted the figure would surpass $300,000 and reach parity with Melbourne’s median blockcost before the end of this year as the city’s supply of land was rapidly eroded by growing numbers of people heading out of metropolitan areas — manynow driven by a desire to escape urban life rather than affordability.
“We are seeing a Covid-induced change, people want to be there (Ballarat),” Mr Keane said.
“The demand is there to be outside of the urban footprint. And if they can’t get a lot, they will turn to the established market and that will push the house prices through the roof.”
He claimed the issue was being compounded by town planners releasing land for sale based on 2019 data, when just over 600 lots sold in a year. In 2020 there were 1750 lots sold. This year the figure is expected to top 1800, with 924 sold in the first six months of 2021.
Mr Keane said Ballarat wasn’t alone, with land planning shortages in other regional hubs such as the Macedon Ranges, Bendigo and Warragul also potential risking affordability issues.
“If they don’t act quickly then that demand pressure will move to the established housing market and they will face an affordability crisis,” Mr Keane warned.
“To prevent that, they need to fast-track any new subdivisions already in plans. ”Geelong’s median lot price has been matching Melbourne’s more affordable new housing growth corridors for a number of years.
Resi Ventures boss Khurram Saeed said he had a 500-lot subdivision to Ballarat’s north that could be available for sale by 2022 if the local council fast tracked approvals, but was currently expected to hit the market in 2024.
“We’re not asking for special treatment, however unless something is done to fast-track the land rezoning, the Ballarat unmet land development market is facing a supply black hole,” Mr Saeed said.
PRD Ballarat director Jason Birch said there had been a notable surge in land and house prices across the city, with a property that would have cost $450,000 now worth over $600,000 and instances of those who had bought land selling it for tens of thousands more before it had even been titled.
But Mr Birch said even if a block wound up costing as much as one in Melbourne it would likely be substantially larger than you would get in the big smoke.
“I don’t think it will be a crisis,” Mr Birch said. “But there will be people who find it difficult as prices for everything are rising, but wages aren’t.”
He added that the wage gap between those employed in Melbourne and those in Ballarat would also impact affordability, with first-home buyers squeezed out also likely to struggle to access a rental property amid heated demand.
City of Ballarat development and growth director Natalie Robertson said the city had 1290ha of future urban expansion in the Ballarat West Growth Area and is looking for other opportunities.
“In addition, the City of Ballarat is currently preparing an affordable housing policy to provide for the delivery of different affordable housing models in Ballarat in close consultation with key state government agencies,” Ms Robertson said.
From The Sydney Morning Herald