NOV30-06

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Volume 4, Thursday 30th November, 2006

Overheated?

Will the heat go out of the market with the new subdivision?

By Les Rochester The imminent release of about 125 building blocks in a new subdivision south-east of Stuart Road is expected to stabilise house prices in Roxby Downs. According to real estate agent with Raine & Horne Mr Wayne Lawson, the release of the new blocks will relieve the pressure on rental accommodation. “I don’t expect it to have the same impact as the crash in property prices the town experienced back in 1999-2000 when rents fell from $350 a week to $200-$230 a week. “That was a different scenario. There was an oversupply of housing and not much demand. At the moment the reverse is true, where there still is a huge demand for housing and rental accommodation,” he said. “Current prices are way overheated, there’re just too high, because people’s expectations are over the top on what they want to get for their property. “The buyers and investors are not around as they were this time last year. They’re still willing to pay a realistic price, but not something that is quite fanciful,” Mr Lawson said. Agents in Roxby Downs are of the opinion that the new subdivision will not have an immediate impact on the market other than to stabilise it.

Real Estate Consultant for Wardle Real Estate, Ms Ali Webber said many people have been concerned about the land release and what it may do to the current market. “During the last few months, we have certainly experienced a decrease in the average median sale price but it has begun to rise again along with greater interest from investors,” she said. Ms Webber said whilst this development and further development announcements have slowed the market and made it a little unstable for the time being it is hard to pin point exactly the cause. “Although there are whispers about BHPBilliton releasing many more subdivisions it all comes back to two words, supply and demand,” she said. Her comments are supported by Mr Wayne Lawson. “It’s quite simple really. It’s going to take at least 18 months to two years to have a house built on the new site, so in the short term, no, it will not have an effect. “The interest rate hikes over the last few months have also helped rein things back in with some sellers dropping prices 20 to 30 thousand dollars just to clear them,” Mr Lawson said. Work on the new subdivision is expected to be completed before Christmas.

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Roadworks, guttering, stormwater and sewerage infrastructure have all but been completed. This subdivision will include three large allotments which are proposed for high density, town house style accommodation. In its last newsletter to employees BHPBilliton said options were being considered for the allotments which could contain 40, two-bedroom and three-bedroom townhouses, providing 120 additional units of accommodation. The company said it had activated plans for two further 100-lot subdivisions in Roxby Downs, as it continues to meet the critical shortage of accommodation for its workforce. Back in June the company reported it had 225 parties interested in house and land packages and that homebuyers will be able to select from three, four and five-bedroom houses as well as twobedroom duplex style accommodation. The packages are to be sold at the cost of the land and the building construction with no profit to the company. BHPBilliton said those prices will be kept low as it will be able to achieve discounted costs for each type of house through bulk ordering and its direct project management of the construction work. Construction is expected to begin early next year.

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