Building rates stagnate despite affordability

GOOD DEAL: Building in Bendigo has stagnated, despite a lot of house and land packages priced under $400,000.

GOOD DEAL: Building in Bendigo has stagnated, despite a lot of house and land packages priced under $400,000.

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Local building rates have stagnated over the past year despite Bendigo’s eminently affordable house prices, according to recent data. 

The average new house price in Bendigo has risen around four per cent each year since 2014, with new builds excluding land costing, on average, $285,000 in 2016/17, latest Australian Bureau of Statistic figures show.

New builds have hovered around the 1000 mark for the past three years, and building permits issued in the North Central region dropped just under 10 per cent since mid-2016, according to the Victorian Building Authority.

From July 2016 to February 2017, 3845 permits were issued by the VBA – down from 4260 the previous year.

PRD Nationwide director Tom Isaacs said a confidence issue in the land market was slowly correcting itself.

“Urban sprawl was seen as an issue. You reduce urban sprawl by building more allotments, which in turn reduces the allotment sizes,” he said.

“The consumer has taught developers a bit of lesson into the kind of stock they want,” said Mr Isaacs, who suggested 700m2 blocks were now sought by punters.

“A lot of people have been buying land and waiting to build.” 

Second-home buyers were the dominant force gobbling up plots of land larger than 1500m2, he said. 

Meanwhile, White Hills – Ascot was the prime-moving suburb, according to ABS data, with 302 houses built since 2015, while Strathfieldsaye (253) and California Gully – Eaglehawk (167) were other areas experiencing growth. 

Mr Isaacs said affordability remained “very strong” in a market exhibiting steady growth. 

Land prices varied between suburbs, according to Mr Isaacs, with greenfield sites north of the city, like Huntly and Epsom, still very affordable at $92,000-$125,000, compared to pricier areas like Strathfieldsaye ($140-175,000).

Most land and house packages were still under $400,000, he said. 

The state government recently doubled the first home-owner grant to $20,000 from July 1, in a bid to stimulate the housing market. 

Just 228 residents in Greater Bendigo used the first home owner scheme in 2015. 

The Andrews government also abolished stamp duty on properties worth up to $600,000.

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