Australian residential land sales slump, prices rise
Published 24 January 2011
Australia’s Housing Industry Association said last week land sales were the lowest they’d been in a decade and prices were rising, making housing less affordable.
The association, which represents Australia’s residential building industry, issues regular land & housing reports in association with RP Data. They said their latest residential land report showed the volume of sales fell 57% from the September quarter of 2009 to the same quarter of 2010.
Meanwhile, the median land value grew 2.8% from the June quarter and 5.2% over the year to $A186,629. The rise in value in capital cities was 5.3% over the year, 4.4% in regional areas.
The association’s senior economist, Andrew Harvey, said: “Land price appreciation is a key cause of Australia’s housing affordability problem, with higher prices cascading through the residential market to push up the price of both new & existing houses.”
He said Australia’s expensive land prices were due to a failure of policies at all levels of government to achieve a timely supply of land for residential development.
RPdata.com senior research analyst Cameron Kusher said the escalating cost of land was not only impacting the affordability of new homes but also that of existing housing: “When the median price of a block of land in Sydney is $A269,000 it’s easy to see why affordability is spiralling out of control. When you add - on top of the land cost - professional fees, government charges and the actual cost of constructing a home, it’s no surprise that many Australian’s are forced to remain in the rental market, paying off others’ mortgages.
“The cost of vacant land and subsequently new housing also impacts prices of existing houses. Typically, vacant land is most abundant in areas further away from the city centre. When owners of existing housing stock closer to the city centre see the prices being achieved for housing in these new areas of the city they quite rightly seek (and in most instances achieve) premiums in excess of these prices.
Published 24 January 2011
Australia’s Housing Industry Association said last week land sales were the lowest they’d been in a decade and prices were rising, making housing less affordable.
The association, which represents Australia’s residential building industry, issues regular land & housing reports in association with RP Data. They said their latest residential land report showed the volume of sales fell 57% from the September quarter of 2009 to the same quarter of 2010.
Meanwhile, the median land value grew 2.8% from the June quarter and 5.2% over the year to $A186,629. The rise in value in capital cities was 5.3% over the year, 4.4% in regional areas.
The association’s senior economist, Andrew Harvey, said: “Land price appreciation is a key cause of Australia’s housing affordability problem, with higher prices cascading through the residential market to push up the price of both new & existing houses.”
He said Australia’s expensive land prices were due to a failure of policies at all levels of government to achieve a timely supply of land for residential development.
RPdata.com senior research analyst Cameron Kusher said the escalating cost of land was not only impacting the affordability of new homes but also that of existing housing: “When the median price of a block of land in Sydney is $A269,000 it’s easy to see why affordability is spiralling out of control. When you add - on top of the land cost - professional fees, government charges and the actual cost of constructing a home, it’s no surprise that many Australian’s are forced to remain in the rental market, paying off others’ mortgages.
“The cost of vacant land and subsequently new housing also impacts prices of existing houses. Typically, vacant land is most abundant in areas further away from the city centre. When owners of existing housing stock closer to the city centre see the prices being achieved for housing in these new areas of the city they quite rightly seek (and in most instances achieve) premiums in excess of these prices.
Comment