“Land price increases in Australia are unrelenting,” HIA Senior Economist Shane Garrett said.
“The substantial increase in the price of residential land continues to be the single biggest factor behind recent deteriorations in housing affordability,” Mr Garrett said.
The HIA-CoreLogic Residential Land Report shows that a typical vacant lot of land for housing increased in price by 2.1 per cent in the March quarter of 2017.
“The HIA-CoreLogic Residential Land Report shows a small increase in the supply of residential land on the market during the quarter and the price of land is now 9.3 per cent higher than a year ago.
“The solution to the housing affordability challenge lies in ensuring that the additional residential land needed across our cities and regional towns is delivered in the right place, at the right time and at the lowest price. This should be a key imperative for governments at all levels,” concluded Shane Garrett.
“The latest HIA-CoreLogic Residential Land Report suggests that demand remains strong for residential land as a result of strong dwelling price growth,” said Eliza Owen, CoreLogic’s Commercial Research Analyst.
The CoreLogic hedonic price index suggests that while capital growth in the Sydney market is slowing, it is not slow – annual gains in Sydney dwellings were still 12 per cent in the year to July.
“An interesting dynamic to follow will be in Melbourne, where annual housing returns were over 17.2 per cent as shown by the hedonic index, but units grew by just 4.6 per cent,” Ms Owen said.
“High growth in housing assets may make houses on relatively cheap land the preferred dwelling type for developers. This is already evident around the fringes of the Melbourne metropolitan area, where residential subdivisions for housing estates are in the pipeline for Whittlesea, Casey and Plumpton,” she said.
At $253,525 per vacant lot, the price of residential land has stretched to yet another record high according to the latest edition of the HIA-CoreLogic Residential Land Report published by the Housing Industry Association and CoreLogic.
Based on sales during the March 2017 quarter, the pace of annual residential land price growth was strongest in Melbourne (+16.6 cent), followed by Sydney (+11.1 per cent) and Adelaide (+7.4 per cent).
Price pressures were a little more modest in Brisbane (+3.6 per cent) and Perth (+2.7 per cent) over the same period. Hobart was the only one of the six capital cities features in the report to experience a reduction in land prices over this period (-8.0 per cent).
