Buying frenzy puts squeeze on land supply in Warrnambool

Bill Welsh said he had been forced to tell prospective buyers it would be at least two years before he would have any blocks to sell.

Some real estate agents contacted by The Standard said they had little to no land on their books to sell right now but more supply was on the way by the end of the year.

One developer who has 290 blocks for sale in north Warrnambool said the city's land market had shifted and was operating more like a metropolitan market.

Some developers are playing catch up on the land they have already sold, unable to sell too far in advance because titles and infrastructure have to be completed within two years of a sale. Buyers were being put on waiting lists.

But for Mr Welsh, he said the whole system needed to move quicker so the city's housing market didn't stall.

Developer Natalie Stevens, of Land in Warrnambool, is one of the developers in Warrnambool who has blocks to sell right now.

She said there had been a shift in Warrnambool with land sales now selling more like metropolitan Melbourne and Geelong.

"You can't just buy a block of land and build but you haven't been able to do that in metropolitan areas like Geelong and Melbourne for a long time," Mrs Stevens said.

"When metro buyers are told there is a two-year wait, metro buyers aren't shocked.

"It's unheard of to be selling land in Warrnambool three or four stages ahead of when roads are built."

Mrs Stevens said the way to buy land was to put your name on a list.

Not taking into account pre-sold blocks, they have 450 rezoned lots in Warrnambool with 290 of those on the market in the Northern Edge Estate as part of a staged release. "We will never stop selling land," she said.

But she said while they had land for sale, it did not mean you could buy today and start building tomorrow. There was still a decent wait of up to two years before you could build on most blocks, Mrs Stevens said.

Land development could only happen so fast, she said, with developers limited by their ability to produce it and get it through planning.

Land in Warrnambool has a new subdivision on its books east of Aberline Road but that is yet to be approved and rezoned. It, she said, "had the potential to save the city", if it could be fast-tracked.

Homeseeka's Paul Jellie said blocks were still being sold in Riverside Estate off Wollaston Road, and there was a 50-lot subdivision in the pipeline elsewhere.

He said blocks were being snapped up quick, and while they were constructing stage four, they were selling stage six with three more stages yet to go on the market there. Each stage has 20 to 25 blocks.

Mrs Stevens said the growing demand was pushing local buyers out of the market with people who have lived in Warrnambool their whole lives now forced to move elsewhere.

Mr Welsh said he had run out of blocks to sell and was waiting on more to be rezoned, but that took time.

"It seems like we do have land stock available, we've got developers that are keen to do it. We've got capabilities with civil contractors able to carry out the construction. The issue we've got is there's no land that's shovel ready now. That's the problem," he said.

He said one real estate agent told him he didn't have one vacant block to sell and was telling people to call back in two years.

Mr Welsh said he had met with council about eight months ago and warned this was where the city was heading. He called on the state government to get involved to help address the problem. ''We've got to do something," he said. "The reality is, if you can't sell land the whole market stalls."

Mr Welsh said once the market stalled, growth in Warrnambool was going to struggle. He said people were already starting to get locked out of the housing market. "It's going to reverberate down," he said. "There is a lot of land that won't be available for another 18 months to two years."

Mr Welsh said the state government had thrown another spanner in the works by talk of a windfall tax on developers. He said the uncertainty had left developers wondering whether it was worth it and warned it could just push costs back onto buyers.

"It's going to be a game changer. I don't know if anyone has got their head around how it is going to work," he said.

Mr Welsh said Warrnambool needed to find more parcels of land to open up or there would be a problem down the track. "We've just got to make sure there's enough land available," he said.

The council's city growth director Andrew Paton said there had been record levels of residential construction with data released this month showed 407 new dwellings were either under construction or built in Warrnambool over the past 12 months - almost double previous years.

Mr Paton said planning didn't happen overnight but the council had already, and would continue to divert resources where it possibly could to help facilitate this.

He said that included working on future growth areas that might require rezoning in the future such as, but not limited to, east of Aberline Road. "This work is being led by the Victorian Planning Authority with technical assessments under way and council will continue to advocate its progress," he said.

Mr Paton said Warrnambool was well positioned to accommodate future growth in an orderly way with supply in excess of 20 years across six different residential growth areas.

"A range of housing diversity and choices are also an important offering for a regional city like Warrnambool," he said. "Council will continue to monitor closely the take-up of land and associated land supply to accommodate sustainable levels of growth."

Myers Planning Group managing director Steve Myers said the past 18 months had accelerated growth in regional property development with most residential greenfield sites either developed or with significant planning under way. He said a regional property market correction was under way.

Developer Clayton Harrington said he had no more land to sell at the moment but the problem was there was a bottleneck in the approvals process. "We've got a major problem," he said. Mr Harrington said there was a lot of zoned land in Warrnambool but it needed to be unlocked.

Former mayor and developer Tony Herbert said it would be a challenge to keep up with demand from buyers. "The value of private sector and public sector development is astronomical," he said.

Mr Herbert said the council had rezoned large parcels of land but not everyone wanted to develop them. He said there were three or four relatively large parcels of land appropriately zoned but they were not being developed.

Mr Herbert said land in Warrnambool was tightly held but the growth spurt had got the attention of developers from outside the city who were now showing "significant interest".

"We've got the advantage of having one of the biggest health developments ever in regional Victoria about to begin in a couple of years. So that's really a huge drawcard for people," he said.

Mr Herbert said he, along with other developers, had 160 zoned blocks available on Wollaston Road that were not yet on the market. "We would be very keen to put them to market," he said.

"There's probably more land around than people think but it's whether developers are prepared to release what they've got at the moment."

Mr Herbert said there had been a sharp turnaround in the market in the past 12 months. "What we were selling up until last year had us all concerned but it's just gone boom. Phenomenal," he said.

Developer Tom Lindsay said all 150 blocks had been sold that were released in the Logans Beach and Hopkins Heights estate about seven months ago, but flagged 80 more were coming at the end of the year.

"We've got more lots to develop, because we sold so quickly we need to then construct the lots and so we held off selling anymore," Mr Lindsay said. "We haven't sold any lots because we haven't had any on the market for the last seven months or so."

Mr Lindsay said titles had to be produced within two years of selling a block so developers couldn't sell too far in advance. Mr Lindsay said buyers were being put on a waiting list.

Harris and Wood real estate's Matthew Wood said he had sold out of land at the moment but more was on the way. He said construction had to catch up with demand, estimating he had 300 sites in the wings that could soon go on the market.

"All of a sudden we've had a massive influx of demand that just could not have been foreseen and the construction and planning and modelling hasn't been able to keep up," he said.

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