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Strong market best time to adopt



Launching a platform that removes the friction between developers and builders to speed up the land sales process might seem an odd thing to do in a hot property market. But the CEO of LandNow Tony McEntee says the unprecedented level of activity in the current WA land market has not deterred builders and developers from embracing the platform. 


“The land sales market is ripe for a transformative platform like LandNow,” Tony said. 


“Until LandNow, the communication channels between sales agents for builders and developers have been unchanged for more than 20 years. And that basically involved reps ringing developers and asking “Have you sold that block yet?” or “What stock have you got available?” 


“But we’re completely disrupting that at LandNow and making it easy to see what's available in real-time, as well as all the property details that you need in front of you when you're with a customer to deliver an informed sale.”


LandNow is Australia’s leading online marketplace to manage, search and secure land. The platform is a game-changer in the house and land industry, revolutionising how land developers and home builders connect and work together through an inventory management system with best-in-class mapping, the ability to view lots, hold and buy and delivers detailed filtered searching. 


Since its launch in late October last year, LandNow has been steadily signing up builders in WA and getting strong interest from developers. There are approximately 120 active land estates in WA with builder referrals making up to 93% of sales, making the state the ideal first place to test the technology.


“The interest in the platform has been fantastic,” Tony said. “Both developers and builders are telling us this is what the industry needs and has been waiting for. They see the value in coming on board while the market is strong so that they are well-positioned when it changes direction again.”

 

But Tony admitted the strong market has had its challenges. 


“We know it’s tough out there for builders at the moment. Demand is so strong, it's hard to find land at all and the prices are only going up,” Tony said.


“It’s underlined how relationships between developers and builders have never been more important which is why we've delivered the new Exclusive Release Function. It means developers can give preferential access to builders they work with regularly, while on the other side of the equation, builders can request exclusive access.” 


Tony, who has worked in the house and land industry for the past 20 years, says the current market has many similarities to the boom of 2005 to 2007.


This includes the high volume of land selling, and prices rising substantially and quickly month on month. Smaller lot releases going to market enabling developers to reduce spending on marketing. 


“With demand so strong, it’s difficult for developers to price lots at the moment and some developers now pricing blocks as EOI (expressions of interest),”  he said. 


“The industry can build 20,000 homes in WA, but demand is for 25,000 over the next 3 years. Builders are desperate for land. In some instances, we’ve seen them placing a 9th hold on a lot!”


Builders are also struggling to get tradesmen due to the latest mining boom in the west. 


According to the Infrastructure Australia Market Capacity report (December 2023), median house prices are forecast to grow by 15% this year, while REIA predicts 18%, signalling the current upturn has some time to run. 


The average number of days it takes to sell a property is currently 10 days in WA, and there were 2200 land sales in the September quarter alone. Much of this growth comes from a rapidly growing population. 


In the 12 months to June 2023, Perth’s annual population increased by 3.1%. The western capital is currently home to 2.9 million people. International migration was 62,000 over the past 12 months with an additional 12,000 migrating from interstate. But this recent spike is expected to level out to 40,000 pa.


“Considering population growth, house sales, new completions less demolitions, net housing supply is short 4200 dwellings per quarter,” Tony said. 


“We can see that there’s currently 23,000 homes under construction suggesting the completed homes number should increase over the next few years but for the next 12 months or so, it looks likely that the strong market is here for a while.”


REIA figures show that while mortgage stress has historically been an issue at 30% of household income, in WA that figure is now at 34.5% while in Victoria, it is 45%. 


“This suggests affordability issues being experienced in Victorian markets have some way to go in WA and that the market has yet to peak,” Tony said. 


LandNow is experiencing the same issues as the general WA industry in that the stock is selling out. Developer projects ready to go live on the platform are quickly selling out. However new stages and releases are expected to be launched in the March and June quarters.


“Our team at LandNow is working closely with developers to list live stock, and working with others in the medium term to understand the market cycles because the current demand won’t last forever. A an industry, the steps we take now to improve our processes will position us better for a downturn.”


For further information:

Kylie Davis

0401 673 329


Tony McEntee

0433 690 026

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