New home buyers in ACT struggle to find affordable land under Homebuilder threshold

While inquiries for blocks of land are skyrocketing with buyers looking to take advantage of the Homebuilder package, industry bodies have raised concerns on whether people understand that the incentive includes both land and the costs of building a home.

Ante Vatavuk of Elliot Hardie Homes, a residential building company, said he’d seen a “strong uptake” in inquiries for custom-built homes in Googong, Throsby, Taylor and Straithnairn — some of Canberra’s newest suburbs.

“Those who are driving inquiries are first-home buyers and people looking to upgrade from an apartment or townhouse to a standalone house,” Mr Vatavuk said.

However, while it is popular, the package — which is capped at $750,000 and only available until December 31 — has made it difficult for buyers to find affordable land.

According to Allhomes listings currently on the market, the most affordable block of land starts at $326,700-$458,000 in Strathnairn and can go up to more than $1.9 million for almost one hectare of land in Yarralumla.

“Many buyers wanting to take advantage of the incentive while staying under the $750,000 threshold are finding it difficult due to the pricing of land and lack of the smaller affordable blocks currently available,” Mr Vatavuk said.

There are currently six blocks of land available on Allhomes’ website under $350,000 that are yet to be snapped up.

Mr Vatavuk added that the cost of building a house, not factoring in the land price, can range anywhere from $400,000 for a single-level house to more than $580,000 for a two-storey house.

“Most of our clients on the lower level are having to spend more on land than the construction of the house,” he said.

The federal government’s HomeBuilder scheme was announced in June and is available to individual applicants who earn less than $125,000 or $200,000 for couples.

Mr Vatavuk called on the government for a tailor-made incentive program for the Canberra community, noting that the incentive “is better targeted towards [off-the-plan] apartment and townhouses opposed to those wanting a house”.

While the package is an attractive stimulus for buyers looking to purchase a new build, Gavin Van Zyl of White Rhino Properties said established homes are still popular among buyers.

“We’re still seeing really good numbers through our open home inspections … and almost all of our listings are under offer at the moment so evidently there isn’t enough stock on the market,” Mr Van Zyl said.

According to a spokesperson from Googong Township, a joint venture between developers Peet and Mirvac Group, some buyers who were looking to purchase an established home pre-pandemic opted to wait and buy a house-and-land package after the inventive was announced.

“There was a lot of speculation surrounding a potential stimulus package. Although our recent campaigns saw high volumes of inquiries and sales, we feel HomeBuilder may have pulled forward demand and assisted in driving prospective purchasers to [purchase],” they said.

Mr Van Zyl, who specialises in the Googong area, is also selling land in the $420,000 to $440,000 price range.

According to Mr Van Zyl, buyers will get more bang for their buck when it comes to land across the border.

“The block prices over the Canberra border are almost $200,000 cheaper than the ACT and for me, personally, I’d rather put that money into building a quality house than a patch of land,” he said.

Alexander Anlezark of Instyle Estate Agents added that some buyers find “building a new home quite daunting”.

“I think the demand for established properties will always be there because, in some instances, established homes are on bigger blocks of land and some people want a move-in ready house.

“They want to purchase and move right in, rather than wait for six months for their homes to be built.”