Flashy developer incentives push up cost – and attendant stamp duty – of Melbourne land packages: Australand
Australand has slammed some of its biggest house-and-land competitors for offering incentives to entice buyers as the outlook for the Melbourne land market remains soft.
Land sales on Melbourne’s fringes have been in decline since the second half of 2009, falling from 16,000 sales in 2010 to just 6,000 for the first six months of 2012, according to the latest Melbourne communities report from Colliers International, which forecasts only modest growth ahead.
Median land prices fell by 9% over the six-month period, from $215,000 to $205,000, but recorded an increase of 7% year-on-year.
Developers have also been hurt by the withdrawal of the $13,000 Victorian government first-home buyer handout for the construction of new homes, which ended in June.
Australand general manager Rob Pradolin told Fairfax the current land market remained tough, with first-home buyers disappearing following the ending of the grant, but says rebates and incentives are causing hundreds of home owners to pay more stamp duty because the face value of contracts included those extras.
He says there is a lot of competition in the marketplace, with “developers under-cutting each other and offering significant incentives to make a sale”.
Pradolin says rebates are disguising the adjustment that has already occurred in the Melbourne land market and says it is about time developers face the facts, give a simple best price and move on.
Australand has eight land estates for sale on the Melbourne fringes including Casiana Grove in Cranbourne West, with land prices starting at $187,000 featuring 670 lots.
According to Colliers, 400 lots remain available for sale in this development.
Among those offering incentives is one of Australand’s biggest competitors, Stockland, which is offering a $10,000 cash rebate on selected lots.
The rebate is offered at Selandra Rise in Clyde North, the-top selling residential project over the second half of 2011, according to the same Colliers report.
Lend Lease is offering to pay back the value of stamp duty of the land component of the sale to be received as a cash-back upon settlement before December 7, 2012.
Another developer, Peet, was giving away Toyota cars up until October 14.
Other developers offering incentives include Intrapac, which is offering a $15,000 new home buyer grant at its Somerfield development at Keysborough in Melbourne’s south-east, which is available to all buyers.
“We’re extending the expired new home buyer hrant to include everyone,” says the Somerfield brochure.
Some of the promotions come with flashy, attention-grabbing signage.
The Stockland offering is called the “Hot Lots Offer” complete with burning flame.
Other developer incentives have included cash rebates, stamp duty rebates, free fencing and landscaping.
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