Sydney drives strong recovery in residential house and land market: National Land Survey

Sales activity is picking up in fringe new housing estates led by a strong recovery in house and land sales in Sydney, according to the June quarter National Land Survey Program (NLSP).

There was a 16% increase recorded nationally with total sales reaching their highest level since the GFC – about 3,700 lots sales per month – according to the report compiled by ResearchFour and Charter Keck Cramer and seen by the Australian Financial Review.

The rise has been attributed to the low interest rates and pent-up demand in previously underperforming markets, predominantly in Sydney.

Monthly lot sales hit 800 in Sydney, a rise of 18% according to the June quarter NLSP report. The figure also incorporates land sales in NSW metro centres of Newcastle and Wollongong.

The figures back up sentiment and figures from listed property developer Australand, which in half year results released last week reported that residential sales contracts on hand increased from 1,316 to 1,793 driven by a strong pick-up across some of its Sydney projects.

In NSW, Australand contracts on hand increased from 543 as of December 2012 to 905 as of June 2013.

The most recent HIA new home sales survey reported a pick-up in detached new home sales (up 7.3% at the end of last financial year), compared with apartment sales dropping by 17.5%.

“Detached housing has gained momentum as non-detached housing - primarily mid/high density product - has lost momentum to date,” said HIA chief economist Harley Dale.

The HIA figures – based on sales data from Australia’s biggest residential builders – report a strong rise in Victoria (up 19.7%), followed by Western Australia (7.1%), New South Wales (3.9%), and South Australia (0.5%) with a 11% fall recorded in Queensland.

The NLSP survey, which monitors land sales from 550 estates across the five major capital city markets and major regional cities, records a 37% rise in sales over the quarter in Melbourne, but due to excess stock being absorbed, smaller lot sizes and the price of land falling.

The Oliver Hume report on the Melbourne land market for the March quarter recorded that the median land price eased during the quarter to $201,250: down from $205,000 in the December 2012 quarter.

Excluding rebates, the net land price was $188,750.

ResearchFour director Colin Keane says Melbourne remains the weakest land market with a lack of product choice characterising the market.

Sales rose 58% over the quarter in south-east Queensland – after bottoming out in the March quarter.

Midwood’s Prodap Report of the Gold Coast market recorded both a strong lift in vacant residential lot sales over the June quarter (rising 55% from 140 in March to 214 in June quarter – the biggest rise since 2009) and house and land package sales up 70% over the quarter from 56 to 97.

House and land sales rose 18% in Adelaide and 24% in Canberra.

Lot sales rose just 5% in the June quarter to reach above 1,200 in Perth with ResearchFour noting that both production capacity and demand may have reached their peaks.