The price of vacant residential land lots in Australia hit another record high despite declining sales in a softening residential market.
According to the latest HIA-CoreLogic Residential Land Report, the median vacant residential land lot price rose nationally to $267,368 – an increase of 6.5 per cent and up 10.9 per cent from the previous year.
HIA senior economist Shane Garrett said the high cost of new residential land is at the heart of Australia’s housing affordability crisis.
“The housing industry’s ability to ramp up the supply of new dwellings as demand dictates is hampered by the inconsistency of the land supply pipeline.
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“The high cost of new residential land is at the heart of Australia’s housing affordability crisis,”HIA economist Shane Garrett
Vacant residential lot sales volume dropped by 10.3 per cent during the September 2017 quarter and was 20.4 per cent lower than in 2016, while Australia’s capital city residential land markets dropped by 10.6 in lot sales volume, 20.9 per cent lower than a year earlier.
Sydney was revealed as Australia’s most expensive land market in per square metre terms, costing $1,051 per square metre, followed by Perth and Melbourne whose markets were at ($752 per square metre $737 per square metre respectively.
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Queensland’s Sunshine Coast was the most expensive regional market in Australia at $718 per square metre followed by the Gold Coast at $566 per square metre.
The CoreLogic Hedonic Home value index is showing a 1 per cent quarterly decline in capital city dwellings in the three months to January, led by the Sydney market which saw a 2.5 per cent decline.
“Despite the softening in capital growth, land prices were driven higher by long term confidence in some Australian metropolitan markets,” CoreLogic research analyst Eliza Owen said.
“Indeed, developers may act counter-cyclically to secure vacant land on the fringe of metropolitan areas before the next upswing.
“This is reflected in Melbourne, which saw over one in five of the 14,704 vacant land transactions in the year to September.”
CoreLogic development data indicated that 48.6 per cent of residential subdivisions in 2017 commenced on the fringes of Melbourne.