April 2023 Celsius Land Update
Project Updates
The Arabian Court (Champion Lakes) local structure plan was approved in April 2023, subject to modifications, by the Department of Planning Lands and Heritage. The Department has issued draft subdivision conditions with negotiations on these being finalised.
At Jayes Road, Piara Waters the stage 1 earthworks have commenced with the earthworks due for completion on 14 August 2023. The structure plan has been approved, subject to modifications, and the subdivision application has also been approved. Works are underway in preparation for a sales release in July 2023.
In Exmouth Celsius Land is project managing the construction of 24 apartments and villas which are leased to Petroleum Helicopters International (PHI). The first 13 villas were completed in mid-April 2023 in time for the Exmouth Eclipse, which was an important milestone to ensure that PHI didn’t need to remobilise to another location. Celsius has received positive feedback from the individual occupants regarding their initial use of the villas.
Market Conditions
The Urban Development Industry (WA) reported sound land sales volumes in the March 2023 quarter, being a similar result to the December 2022 quarter. The median land price for March 2023 was $225,000; which is similar to the prior month and approximately 3% lower than the median land price 12 months ago.
Land pricing is being impacted by higher interest rates and a lack of confidence in the housing market with ongoing stories in the media of builders collapsing or closing their doors to new business and home construction periods continuing to extend.
In the meantime Western Australia’s housing crisis is deepening with Western Australia’s population increasing by 13,981 people from net migration and immigration in the September 2022 quarter (Australian Bureau of Statistics); being the highest net inflow into Western Australia since September 2012. Not surprisingly this is continuing to put pressure on the rental market with REIWA reporting the median weekly house rent in Western Australia having increased from $480 per week to $550 per week over the past 12 months. Whilst there is currently a record number of homes currently under construction (partly due to longer construction periods); building approvals for houses in Western Australia have steadily declined since peaking in February 2021 with approvals in January 2023 and February 2023 being the lowest recorded since July 2020; which is likely to lead to a slowdown in the sector over the next 18 months.
The higher sale cancellation rates for residential lots experienced in late 2022 has reduced the amount of civil construction underway with Perth’s largest residential civil contractor reporting some heat coming out of the market in areas such as cartage and limestone blocks. Pressure on labour from the mining industry remains on the civil industry with staff being offered higher wages for fly in fly out work.
We welcome the pause in interest rates this month and market commentary suggesting rate increases are likely to be over or very nearly over. Unlike the East Coast, Western Australian property presently remains relatively affordable and an end to the interest rate tightening cycle will likely see an improvement in buying sentiment.
Regards,
Brenton