Recent changes to the Local Environment Plan could have an unexpected benefit for first home buyers.
The changes reduce minimum lot sizes to make more efficient use of newly released land.
As developers battle growing development costs, the typical 700 square metre block is now out of reach for young home builders.
Housing Industry of Australia figures reveal the median size of new housing blocks in Australia is now between 500 and 600 square metres, because of affordability
concerns.
McDonald Jones Homes director Bill McDonald said the industry could still do more to make new homes affordable.
“Look at what we were able to do with the Hardgraves at Metford 20 years ago, the Hardiplank homes, we got young people into their first homes,” he said.
Housing affordability was raised this week by Hunter Land director Hilton Grugeon at the Rebuilding the Hunter Forum.
HIA figures reveal that the median Hunter building block now costs $173,000.
Ten years ago the median cost was $75,000.
Development costs were a recurrent theme at the forum, which attracted 180 people.
“There is a market for smaller blocks in Maitland but demand until now has been more limited,” Mr Grugeon said.
“A 600sq m block might sell for $180,000, but if you halve the size you aren’t halving the costs because of the taxes the developer pays.”
HIA chief economist Harley Dale said taxes, along with the costs incurred by developers battling government red tape, had changed buyer habits.
“If you removed the taxes and levies associated with land in the Hunter it would by about 40 per cent cheaper,” Dr Dale said.
Mr McDonald said the smaller lots had opened the door to people considering units or apartments.
