Land lease trend: The groundswell of support
Conveyancers will be the winners as the property industry see a surge in land lease develop, according to the Property Council of Australia.
AUSTRALIA’S land lease sector is poised for further growth, according to industry players, with the increasingly popular property choice a potential win for conveyancers.
The nation’s lease market – over-50s housing where buyers own the home and lease the underlying land – has surged in recent years, according to Property Council Australia. Nationwide, the market is now worth around $12 billion, it says.
Speaking at the council’s Property Congress in Brisbane, Ingenia Communities Group CFO Justin Mitchell predicted more growth, with market penetration currently just 1.5%.
“There’s not a lot of alternative projects or products available to that aging population, particularly with the cost of construction going forward,” Mitchell said.
He said global capital was viewing Australia’s emerging industry with interest, arguing that it “probably can’t be replicated elsewhere, certainly in Asia”
Von Slater, CEO of Serenitas, agreed, saying there was “huge headroom to grow from a penetration rate point of view” given Australia’s low base.
“You look at retirement villages around 5% It’s a much more known model, mature markets like in the United States are above 10%,” Slater said.
“Part of that’s going to be actually supplying, you know, building the homes, and there is constraints on that. But a big part of it’s also going to be the consumer and leading (the) consumer.”
GemLife chief corporate officer Manuel Lang said NSW lagged many other parts of the country when it came to planning rules on land lease.
The conference was told South Australia and Queensland are leaders in the field.
“NSW has been pretty far behind in terms of their planning statute and how they’ve approached it, so that’s probably a bit of a low point,” Lang said.
“Having said that there’s been lots of positive development in lots of other states.”
With Australia’s ageing population “there’s not a demand issue, there’s a supply issue”, he said.
Commenting, AIC NSW president Jennie Tonner said conveyancers stood to win from the sector’s growth.
Tonner said land lease was “a great way for people to downsize and get the money out of their home that they have lived in”.
“Get the equity out of it and then go into one of these developments,” she said.
Tonner, who recently started working with clients buying into land lease developments, also pointed to another upside – no stamp duty.
“That’s a great saving,” she said.
