Supply ‘bottleneck’ of land adding to price pressure: HIA
Residential land, having seen a 40% uptick in sales between the September 2012 and September 2013 quarter, is being said to have supply restrictions causing a ‘bottleneck’ and upwards price pressure, according to Housing Industry Association (HIA) senior economist, Shane Garrett.
The latest HIA/RP Data Residential Land Report pointed to pressure on residential land supply in the current recovery, despite a seasonal sales dip of 2.8% over the September 2013 quarter compared to the previous quarter.
“We have long emphasised the importance of ensuring that an adequate supply of affordable, shovel-ready land will be crucial to any sustained recovery in new home building,” said Garrett.
“That task is imperative now more than ever. All levels of government need to implement the necessary reforms to address the problems affecting the residential land market. Reducing the excessive taxes and charges on housing as well as reducing planning and land release delays are key areas that need attention,” he said.
In fact, Peter Chittenden, managing director of Colliers International, has been asking about how Sydney will deal with a lack of land supply for some time.
Meanwhile, observer Terry Ryder has argued that increasing land supply is not the answer to housing affordability.
Land sales are an indicator of detached house building down the line, said Garrett, noting that he sees the prospect of rising detached house building activity this year.
Meanwhile, RP Data’s research director, Tim Lawless, said that market activity has varied.
“The number of land sales reached a new decade high in Sydney over the September quarter. Transaction numbers were close to 60 per cent higher over the six months ending September 2013 compared with the same period in 2012. Such strong conditions across the Sydney vacant land market are in line with broader housing market in Sydney where value growth continues to be nation leading,” he said.
Melbourne and Brisbane have also seen accelerating sales, despite volumes remaining below the highs recorded in 2009. Perth, Adelaide and Hobart have also seen some slippage in the number of land parcels sold over the September quarter, he said.
| MOST EXPENSIVE LAND | ||
| STATE | REGION | COST |
| WA | Kimberley | $260,000 |
| QLD | Sunshine Coast | $240,000 |
| NSW | Richmond-Tweed | $225,000 |
| QLD | Gold Coast | $219,900 |
| NSW | Hunter | $185,000 |
| VIC | Barwon | $185,000 |
| QLD | Mackay | $185,000 |
| NSW | Illawarra | $183,000 |
| QLD | Fitzroy | $179,900 |
| NSW | Mid-North Coast | $175,000 |
| LEAST EXPENSIVE LAND | ||
| STATE | REGION | COST |
| TAS | Southern | $70,000 |
| SA | South East | $72,000 |
| VIC | Mallee | $79,200 |
| SA | Murray Lands | $80,000 |
| TAS | Mersey-Lyell | $86,500 |
| SA | Yorke and Lower North | $92,500 |
| SA | Northern | $98,000 |
| VIC | East Gippsland | $100,000 |
| QLD | West Moreton | $100,000 |
| NSW | Murray | $105,000 |
Source: RP Data, HIA
| MOST EXPENSIVE | ||
| STATE | REGION | COST |
| WA | Kimberley | $260,000 |
| QLD | Sunshine Coast | $240,000 |
| NSW | Richmond-Tweed | $225,000 |
| QLD | Gold Coast | $219,900 |
| NSW | Hunter | $185,000 |
| VIC | Barwon | $185,000 |
| QLD | Mackay | $185,000 |
| NSW | Illawarra | $183,000 |
| QLD | Fitzroy | $179,900 |
| NSW | Mid-North Coast | $175,000 |
| LEAST EXPENSIVE | ||
| STATE | REGION | COST |
| TAS | Southern | $70,000 |
| SA | South East | $72,000 |
| VIC | Mallee | $79,200 |
| SA | Murray Lands | $80,000 |
| TAS | Mersey-Lyell | $86,500 |
| SA | Yorke and Lower North | $92,500 |
| SA | Northern | $98,000 |
| VIC | East Gippsland | $100,000 |
| QLD | West Moreton | $100,000 |
| NSW | Murray | $105,000 |