Land prices head higher
Residential land prices have hit a fresh high, straining housing affordability.
The HIA-CoreLogic Residential Land Report has revealed a 2.6% rise in residential land prices for the June 2016 quarter. The median residential land price hit a new high of $237.535 over the quarter, while the number of lots transacted fell 9.3% year-on-year.
HIA senior economist Shane Garrett said the rise in residential land prices was causing housing affordability to deteriorate across many markets.
“With market supply having fallen further over the past year, policy makers need to look very carefully at ways of bringing about more sustainable outcomes in residential land supply. This will inevitably involve tackling issues around the pace of land release, the bottlenecks in the planning process and the excessive burden of taxation,” Garrett said.
CoreLogic research director Tim Lawless said strong demand for housing was likely to continue to drive land prices higher.
“While unit markets have seen approvals and construction activity reach spectacular highs, supply levels across the detached housing sector remains insufficient in many areas. The lack of available vacant land highlights that greenfield housing markets are likely to remain undersupplied which implies further upwards price pressures across the key vacant land markets where demand remains strong,” Lawless said.
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