A new report has found growth in national land prices slowed to 1.2 per cent during the March 2016 quarter, while turnover in the market fell by 1.3 per cent.
The HIA-CoreLogic Residential Land Report for March 2016 reported this easing of price pressures was helped by a 3.4 per cent increase in land sales in capital city markets — although it also reported an 8.1 per cent fall in the number of transactions in regional Australia over the same period.
“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,” HIA senior economist, Shane Garrett said.
However, he warned that 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.”
Mr Garret said 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 added.
“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,” Mr Lawless said.
He said the report’s findings send a clear signal that demand for well-located vacant land remains strong.
During the period, vacant residential land sales increased most in Perth (+22.3 per cent) followed by Melbourne (+5.2 per cent).
However, land market turnover fell in Hobart (-28.4 per cent), Adelaide (-8.3 per cent), Sydney (-5.9 per cent) and Brisbane (-3.4 per cent) over the same period.