House price growth up, land turnover still falling: HIA
House price growth accelerated during the March 2015 quarter as turnover fell 5.2% from the previous quarter, marking the third decline for land transactions in three consecutive quarters.
Housing Industry Association chief economist Harley Dale said the combination of escalating residential land values and a related decline in sales volumes is not a good combination.
"The combination of significantly reduced turnover and strong price growth suggests that supply bottlenecks in residential land are intensifying," Mr Dale said.
"That is pricing new home buyers out of the housing market and capping the construction cycle at a lower level than would otherwise be the case.
According to the quarterly HIA CoreLogic RP Data Residential Land Report the residential land price in Australia increased 4.1% in March when with the previous quarter, up 8.2% from the same quarter last year. The amount of residential land transactions dropped 5.2% and is 17.6% lower than the same quarter last year.
CoreLogic RP Data research director Tim Lawless said the number of vacant land sales peaked over the June 2013 quarter and have since reduced by almost 30," Mr Lawless said.
"To see the price of land consistently rising over the same time frame suggests low supply is the main driver of this price growth rather than a slowdown in demand.
“Higher land prices translate to more expensive housing which is an unfortunate circumstance for those looking to purchase a detached house. Sydney stands out as the most expensive land market with a rate per square metre of $678, followed closely by Perth with a rate per square metre of $664.”
