Land supply falls as house prices rise

Land supply falls as house prices rise

by 0 comments

An economist has warned that the property market is “fast running into supply problems” after land values reached record levels.

The median price of residential land reached a record $213,000 per lot in the September 2014 quarter, according to a report by the Housing Industry Association and CoreLogic RP Data.

That was the result of year-on-year growth of 10.0 per cent in capital city land prices and 3.5 per cent in regional land prices.

Shane Garrett, senior economist at the Housing Industry Association, said the number of land transactions fell during the quarter, even as price growth accelerated.

“These are the classic hallmarks of a market which is fast running into supply problems,” he said.

“It appears that shovel-ready residential land is starting to dry up against the backdrop of record new home building activity.”

CoreLogic RP Data research director Tim Lawless said he was concerned by the increase in land prices, particularly given that dwelling approvals and construction are at record levels.

“Given that land sales have been trending lower since the June 2013 quarter, it does not bode well for this period of heightened construction to come to fruition,” he said.

“Ideally we should be seeing more land bought to the market and sold during this period of low borrowing costs. This would help to curtail the increases in the cost of this vacant land.”

[Related: NSW land values jump 11pc]

promoted content
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 100 agents 2017

With a combined sales volume of over $14 billion in 2017, the Top 100 Agents ranking represents the very best sales agents in Australia. Find out what sets them apart and learn their secrets to success.

featured podcast

featured podcast
How this agent grew his database by 50% in five years

In this episode of Secrets of the Top 100 Agents, Robert Pignataro joins host Tim Neary to explain how he increased his personal database by...

View all podcasts

Does the benefit of being part of a branded group outweigh the cost?

Yes
No
Depends on the group
Do you have an industry update?