Patricia Gill, Denmark Bulletin

A shortage of residential housing has led to fierce competition for Denmark properties which are being sold above the listed prices.

This coincides with housing development stalling due to the cost of headworks and the reluctance of banks to lend for what they deem as risky projects despite low interest rates.

Former shire president and Ray White Real Estate principal Kim Barrow said his family business had four blocks for sale on the Springdale Beach subdivision out of an allocation of 11.

But title would not be issued until January and another nine blocks, which were due for release in February, would not have title until May.

Mr Barrow said the 3000sqm blocks did not require deep sewerage but did not suit every potential buyer.

Country Property Brokers principal Joss Harman said the housing shortage was, in particular, at the bottom end of the market ($350,000-$450,000).

“Occasionally, there is something available in the $200,000s but very seldom,” he said.

Mr Harman said the current market was cyclical and likened it to 2006.

“In some cases people are getting the same price as they paid in 2006 before the GFC and in some cases people are paying significantly more than the asking price.”

Ian Carter of Carters Real Estate has been overwhelmed with what he calls a ‘pandemic pace’ of enquiries with housing stock sold out for the first time since 2003-2004.

He no longer lists properties at a set price but since before Christmas last year he lists for offers above a set price.

“The job of the agent is to do their best to sell the property,” Mr Carter said.

“An agent is not being honest if they tell you what a property is worth because they do not know what someone will pay for it.”

Properties worth less than $1 million had sold for more than $75,000 than the asking price.

In the case of private sales a vendor had tried to save paying the agent’s fee and the property had been undersold for more than the fee.

‘Invisible’ price increases had occurred in the ‘jumping market’ over the short it took to settle.

Buyers were from WA, elsewhere in Australia and locals.

Mr Barrow said that a disadvantage for developers was that the Government no longer subsidised headworks’ costs on new blocks.

Also developments required high standards, for example, since the development of Kemsley Estate 25 years ago which did not require footpaths.

“This is a good thing. Everyone wants a good quality development,” he said. “But the outlay for developers is huge.

“Everyone involved in a project wants their cut and the developers get their money last.”

Shire of Denmark chief executive David Schober said the Shire was lobbying the Government about the issue affecting development outside of the CBD.

“We have met with the State and Government ministers and agencies and will continue to press this point,” he said.

This article appeared in the Denmark Bulletin, 11 November 2021.