HIA says land price growth moderates in early 2016
The growth of national land prices slowed to 1.2 percent, with market turnover falling by 1.3 percent during the March quarter according the the Housing Industry Association.
The HIA-CoreLogic Residential Land Report for the March quarter found a 3.4 per cent increase in land sales in capital city markets with the number of transactions in regional Australia falling by 8.1 percent.
HIA senior economist Shane Garrett said the easing of price growth in the market for residential land is an encouraging sign, particularly given more favourable supply conditions in capital city markets.
“However, the value of residential land remains at record highs. This is a key source of affordability difficulties confronted by the many Australian families wishing to purchase their first home,” he said.
“Current arrangements around the funding and delivery of the infrastructure that services new housing are inadequate and preventing the release of more affordable residential land stocks.
“As well as hurting ordinary families, the absence of comprehensive reform is paring back Australia’s future growth prospects."
CoreLogic research director Tim Lawless said the moderation in the number of vacant land sales has been evident for some time.
“National land sales peaked during the June quarter of 2014 and have been trending lower since this time. The quarterly number of vacant land sales hasn’t been this low since the third quarter of 2012,” he said.
“It’s encouraging to see capital city land sales bucking the national trend with an increase of 3.4 per cent over the March 2016 quarter. However, despite the quarterly rise in sales, the number of transactions was still 12.3 per cent lower than in the March quarter of 2015.
“The fact that vacant land prices are still broadly rising on both a median price and rate per square metre measure, albeit at a reduced pace, at a time when transactions numbers are consistently trending lower sends a clear signal that demand for well-located vacant land remains strong."
