Acute supply bottlenecks are choking Australia’s residential land market.
The latest data from HIA-RP Data’s Residential Land Report shows the tell-tale signs of a market which is running into supply problems.
HIA senior economist Shane Garrett said there were clearly pressures building in the area of new residential land supply.
“During the September 2014 quarter, the number of land market transactions fell, while price growth accelerated,” Mr Garrett said.
The data showed turnover in the national land market declined by 16.7% over the September 2014 quarter and price growth accelerated to 3.3% over the quarter.
“It is important that land supply policy across Australia is consistent with the goal of housing affordability,” said Garrett.
“The process of delivering new land supply and the requisite infrastructure for new housing is currently too slow and too expensive.”
Garrett said that policymakers need to intervene if Australia’s long term housing needs are to be met.
Figures reflect an all-time high for land prices across Australia, with the weighted median price of residential land up 3.3% to $212,727 per lot, during the September 2014 quarter.
RP Data research director Tim Lawless said the hike in land prices demanded concern because dwelling approvals and construction were currently at record high levels.
“Dwelling commencements are currently at a record high and the Reserve Bank has previously highlighted that their hope is to extend this current period of heightened construction over a number of years,” Lawless said.
“Given that land sales have been trending lower since the June 2013 quarter, it does not bode well for this period of heightened construction to come to fruition,” Lawless said.
Lawless added, “Ideally we should be seeing more land bought to the market and sold during this period of low borrowing costs. This would help to curtail the increases in the cost of this vacant land.”