Increased demand for residential land in Sydney is set to continue, while select south-east Queensland markets will also gain momentum in 2015, says a leading industry analyst.
According to BIS Shrapnel’s The Outlook for Residential Land 2014-2019 report series, the Sydney residential land market is going from strength to strength, with sales rates in the outer Sydney growth centres close to early-2000 levels.
Despite this rise, the extended downturn in the Sydney land market in the last decade has meant that a significant shortfall of new houses remains, says the report.
After a period of weakness, the Brisbane, Gold Coast and Sunshine Coast markets are seeing a recovery emerge, according to the research.
“Low interest rates have improved affordability and also driven an increase in the median house price over 2013/14,” it said.
Senior manager and report series author Angie Zigomanis said the strength in the Sydney market is expected to continue.
Almost a decade of weakness has meant that not only were there few completed lots to satisfy demand, but new subdivisions are quickly emerging to meet the pent-up demand, he said.
Mr Zigomanis said it will take at least a couple of years for this demand to be satisfied.
“The signs are also emerging in metropolitan Brisbane, where lot production fell below 5,000 lots in 2012/13 – the lowest level in at least 20 years,” he said.
“However, the emerging upturn in demand has seen around 6,000 new residential lots completed in 2013/14.”
BIS Shrapnel said, by contrast, land production in Melbourne and Adelaide is likely to show only moderate growth, while the market will track backwards in Perth.