Land prices stalling across Australia
The growth in land prices has slowed, and land sales are at their lowest in more than three years.
The HIA-CoreLogic Residential Land Report has found the pace of land price growth slowed during the March quarter to 1.2%. While land sales were up 3.4% in capital city markets, regional land sales fell 8.1% over the period.
HIA senior economist Shane Garrett said the slower pace of land price growth was positive, but high prices still posed a challenge for home buyers.
“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,” Garrett said.
Garrett said current arrangements around land release were inadequate.
“As well as hurting ordinary families, the absence of comprehensive reform is paring back Australia’s future growth prospects,” Garrett argued.
CoreLogic research director Tim Lawless said national land sales had been trending lower since the June quarter of 2014. He said the number of vacant land sales had not been as low since the third quarter of 2012.
“It’s encouraging to see capital city land sales bucking the national trend with an increase of 3.4% over the March 2016 quarter. However, despite the quarterly rise in sales, the number of transactions was still 12.3% lower than in the March quarter of 2015,” Lawless said.
“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.”'