Housing construction to continue climbing: HIA-RP Data
A new report has revealed that upward momentum in detached housing construction can still be expected over 2013/14, according to the Housing Industry Association (HIA) and RP Data.
The most recent HIA-RP Data Residential Land Report saw strong growth of 18.2% over the June 2013 quarter, reaching a level of 17,170.
"This is the highest quarterly volume achieved since the March quarter of 2010," said HIA chief economist, Harley Dale.
"The recovery in residential land sales is impressive, but from a very low base."
Dale said that there is a close, but slightly lagged, relationship between the land sales noted in this report and the number of detached housing starts.
This points to the prospect of further growth in house starts following a modest lift of 3.7% over 2012/2013.
"The level of sales in 2012/13 was 56,782. Sales are therefore now back to a level equivalent to the GFC trough but no higher - the level is still 21 per cent below the historical average. Obviously it will be important to see further strong momentum in land sales for some time to come. For that to occur there needs to be a keener policy focus on ensuring adequate and affordable shovel-ready land is available," Dale said.
Residential land price growth has, however, been generally modest.
"A flat June 2013 quarter for the weighted median residential land value saw an increase of only 1.7 per cent over the year, less than general inflation," he said.
Meanwhile, RP Data’s research director, Tim Lawless, said that improvements in market conditions are in line with improvements across the broader housing market.
"The housing market has been back in growth since mid-2012 with both the rate of capital gains and transaction volumes gathering some momentum during 2013. It should come as no surprise that the Sydney housing market, which remains well undersupplied relative to the rate of population growth and is recording the highest rate of capital gain currently, is one of the primary drivers behind the lift in national vacant land sales,” said Lawless.