Taylor Scott International News
The new homes market in Australia is expected to be healthy in the coming year with land sales up, especially in regional areas. Quarterly residential land sales held up at reasonably elevated levels throughout 2013/2014, with 10% growth, according to the latest HIA-RP Data Residential Land Report provided by the Housing Industry Association. HIA chief economist Harley Dale explained that the June quarter was particularly with residential land sales up by 8.4%. ‘Both capital city and regional land markets experienced higher turnover during the June 2014 quarter. Growth was stronger in the aggregate regional land markets, up 13% compared to a 5.5% rise for Australia’s six state capitals,’ he said. ‘Consistent with signals from other housing indicators, the geographical recovery in residential land sales is broadening. That is an encouraging sign for detached and semi-detached dwelling construction in 2014/2015,’ he added. However, he pointed out that there is still a wide variation in the trajectory of residential land values around Australia this cycle, within which growth in the weighted median price for capital cities well out-paces that for regional Australia. ‘Over the longer time frame of the past fifteen years there has been a substantial increase in residential land values, which cannot be repeated if the nation is to succeed in adequately housing its growing and ageing population. Land supply remains a policy area that requires much greater focus, and not just at a state level,’ Dale said. In the June 2014 quarter the weighted median price of residential land increased by 1.1% to $205,330, only the third time the value has exceeded the $200,000 threshold. Capital city land prices increased by 1.8% in the quarter to be up by 7.4% compared to the June 2013 quarter. Land prices in regional Australia were essentially flat in the June 2014 quarter, easing by 0.1% but up by 4.1% in annual terms. According to RP Data research director, Tim Lawless, the bounce back after a softer March quarter result suggests there may still be some life left in the residential land sector. ‘This is the strongest result since the June quarter of 2013 which is welcome news. A rise in land sales implies a rise in detached housing construction about six months down the track which in turn provides a substantial multiplier for the Australian economy; more jobs, more building materials, home furnishings, appliances and white good sales,’ said Lawless. ‘Whether this quarterly improvement can develop into a trend is yet to be seen. Despite the June quarter lift, the previous three quarters were showing a slowdown in the number of sales while vacant land prices continued to rise, a trend which may point to ongoing supply shortages of well-located vacant land,’ he added. Taylor Scott International
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