New home building activity has improved modestly in 2013, according to the latest HIA-RP Data Residential Land Report.
“From a very low base in 2011, residential land sales have displayed only modest upward momentum, a trend reinforced by the 4.3 per cent increase observable for the March 2013 quarter,” said HIA chief economist Harley Dale.
“The March quarter update signals we are moving in the right direction, but a key leading indicator - land sales - suggests the magnitude of a first stage new home building recovery will fall short of what the economy requires.
“At this juncture, any clear improving trends are limited to New South Wales and Western Australia. WA is the only state to have achieved clear and consistent improvements in residential land sales over the past 18 months.”
According to RP Data’s research director Tim Lawless, land sales are broadly starting to head in the right direction. However, affordability constraints, particularly in capital city markets, may limit the extent of the recovery.
In the March 2013 quarter, the weighted median residential land value in Australia increased by 2.5 per cent to $198,152. This value was 2.4 per cent higher when compared to the same period in 2012.
The median value for capital cities increased by 3.2 per cent in the March 2013 quarter to $225,781 - 2.9 per cent higher than in the March 2012 quarter.
The median value for regional Australia was $155,807 in the March 2013 quarter. This represents a quarterly increase of 0.7 per cent and a 1.3 per cent increase compared with the same period in 2012.