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Home building activity has remained relatively subdued for some time, with this trend expected to continue on the back of poor land sale figures.
The volume of land sales increased by 18 per cent in the June 2011 quarter, but volumes were still 25 per cent lower than in the June quarter last year and 51 per cent lower than their June 2004 quarter peak, according to the latest HIA-RP Data Residential Land Report.
“The profile for residential land sales remains weak, indicating that the earliest we can expect a turnaround in new housing starts is the March 2012 quarter,” HIA chief economist Harley Dale said.
“It is encouraging that land sales have stopped falling, but there is a long road ahead to ensure a sustainable recovery in new home building to levels commensurate with the housing requirements of Australia’s population.”
The weighted median land value in Australia fell by 1.3 per cent in the June 2011 quarter to be 3.5 per cent higher than the comparable quarter in 2010.
The median value for capital cities was effectively flat in the June 2011 quarter at $214,656 – 5 per cent higher than a year earlier.
The median value for regional Australia fell by 3.7 per cent in the June 2011 quarter to $155,784.
"Over the last decade in particular the cost of serviceable land has escalated at a rate far in excess of general inflation and building construction costs, driven by a lack of appropriate land release and excessive, government-imposed costs. Independent research finds that over 40 per cent of the cost of a house and land package can be attributed to taxation and much of that burden falls within the serviceable land component,” Mr Dale said.
“Policy reform to reduce the excessive taxation levied on new housing is vital to ensuring Australia’s poor record on housing affordability is sustainably turned around.”