A report conducted by Downsizing.com.au has revealed many downsizers are moving to land lease communities in the wake of the pandemic, which is mainly attributed to avoid stamp duty and purchase homes up to 70 percent cheaper than surrounding existing dwellings.
In a land lease community, a buyer purchases a dwelling and then secures a long term lease on the land on which the dwelling sits, usually from a community operator. This means no site-specific stamp duty or council rates are payable.
The report, which tracks the trends of Australia’s over 50s community, has found that the COVID-19 pandemic has accelerated the growth of the commonwealth’s land lease community industry.
As well as avoiding stamp duty and council rates, land lease community models also give buyers a number of positives including: Commonwealth rent assistance, the ability to access housing in lifestyle-rich areas with first rate facilities and an opportunity to move into a modern home.
Land lease communities have benefitted from a number of COVID-19 induced marketplace trends, including: internal migration towards regional areas, a strong property market enticing over 50s to sell their family homes, increased community acceptance of remote working and more buyers being wary of potentially being isolated in their suburban homes and wanting to live independently within dedicated downsizing communities.
Downsizing.com.au CEO Amanda Graham says these factors mean that land lease living is quickly becoming a mainstream housing option for Australia’s over 50s.
“It’s clear that land lease communities are offering what buyers are looking for in the COVID-19 era, as property prices escalate and people want an alternative to being isolated in their suburban homes,” she says.
“In the wake of this increased consumer interest, we’re seeing major companies coming into the industry, and existing operators ramping up development activity.”
The Downsizing.com.au report analyses the prices of new homes in eleven new land lease communities in NSW, Victoria and Queensland, finding that land lease homes are between 11 to 70 percent cheaper than the median house price in the surrounding suburb. Additional stamp duty savings ranged from $2,120 to $18,362.
Across Australia, land lease communities are known by different names. Land lease communities are typically described as residential parks, manufactured home estates and lifestyle communities.
The report focuses on land lease communities which are open and/or marketed to people aged 50 years and over. To read the report in full, click here.