Residential lot sales in Australia dropped during the March quarter, setting a new record low for land sales, according to the Housing Industry Association (HIA).
The fall in sales could be attributed to the decline for new homes, reflecting the market’s downturn during 2018 and 2019, according to HIA chief economist Tim Reardon.
“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% in the March quarter, compared to the December quarter,” Reardon said.
The land shortage is one of the factors that has caused home prices to increase over the past decades. An adequate supply of land is required to avoid affordability from deteriorating, according to Reardon.
The consistent trend towards fewer vacant land sales, at a time when population growth remains strong, shows the need for improved town planning policies and land releases strategies that run parallel with a strategic infrastructure plan, according to CoreLogic research director Tim Lawless.
“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 (upward) pressure on vacant land prices over the second half of 2019,” Lawless said.
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