The latest HIA-CoreLogic RP Data Residential Land Report
shows an increasing divide between demand and available supply in vacant residential land.
Housing Industry Association chief economist Harley Dale says residential land sales fell by 11.8% over the year to the December 2014 quarter while weighted median residential land value increased by 2.8% in the December 2014 quarter, up by 6.3% over the year.
“The increase in the weighted median value was driven primarily by Sydney, with significant growth also evident for Perth and Melbourne,” he said.
“There is insufficient shovel-ready land in some markets and this is placing undue upward pressure on residential land values.
“Construction of detached houses looks to be peaking for the cycle, but there is unrealised demand out there because of that lack of readily available and affordable land.”
Dale says they have seen a hike in price of residential land per square metre in Sydney, Melbourne and Perth in the December 2014 quarter, with Sydney remaining the country’s most expensive land market.
CoreLogic RP Data research director Tim Lawless said, “Higher land prices ultimately lead to less affordable homes - it is the high cost of vacant land which significantly contributes to the increasing cost of housing.
“Ideally we should be seeing more land brought to the market and sold during this period of low borrowing costs.”
The three most expensive regional markets and their median lot prices are Richmond-Tweed in NSW ($274,000), Kimberley in WA ($251,500) and Sunshine Coast in QLD ($250,000).
The three least expensive are South East in SA ($72,000), Mersey-Lyell in TAS ($74,000) and Murray Lands in SA ($81,500).