“Residential lot sales across Australia fell in the first three months of this year (2019) to set a new record low for land sales,” said HIA Chief Economist Tim Reardon.
The March 2019 edition of the HIA-CoreLogic Residential Land Report provides updated activity in 47 markets across Australia, including the six state capital cities.
“This fall in sales can be attributed to the decline in demand for new homes. This reflects the downturn in the market during 2018 and 2019.
“While the volume of sales decreased considerably, this was not reflected in the change in the median price of land. Nationally, the weighted median price increased by 0.9 per cent in the March 2019 quarter compared to the December 2018 quarter.
“A shortage of land is one of the factors that have driven home prices to increase over the past decade. An adequate supply of land is required to avoid a deterioration in affordability.
According to Tim Lawless, CoreLogic’s Research Director: “The consistent trend towards fewer vacant land sales, at a time when population growth remains strong, highlights the need for improved town planning policies and land release strategies that run parallel with a strategic infrastructure plan. Well located developable land remains in short supply which has pushed the price of vacant land higher over the long term, adding to affordability challenges and a reduction in lot sizes.
“More recently, housing credit and housing prices have shown signs of stabilising. CoreLogic data to June reported a subtle monthly rise in housing values across Sydney and Melbourne. With interest rates potentially heading even lower and housing demand via population growth remaining high, we could potentially start to see some upwards pressure on vacant land prices over the second half of 2019.”