Land sales eased in most Australian capital cities over the June 2010 quarter, according to the latest residential land report from HIA, and property information and analytics provider rpdata.com.
The weighted median residential land value for Australia eased by 3.6 per cent over the quarter, but was up two per cent over the year to June.
Sydney remains the most expensive residential land market in the nation with a median value of $280,000.
The Sunshine Coast in Queensland is the second most expensive land market with a median value of $261,750, followed by the Gold Coast ($235,000), Richmond Tweed ($228,700) in New South Wales, and Perth ($227,000).
HIA chief economist Harley Dale says the HIA-rpdata.com Residential Land Report signals a weaker outlook for new home building in 2011.
“A sustained weakening in residential land sales volumes over the nine months to June 2010 and a raft of other leading indicators point to a renewed downturn in new home starts next year,” Dr Dale says.
“That is a sobering outlook, particularly in the context of a very tight rental market, which is already placing enormous pressure on low and middle income renters and aspiring first home buyers.”
There are 12 markets across Australia with median land values of $100,000 or less. The most affordable land market in Australia is the Mallee region of Victoria ($72,250), followed by the Murray Lands ($75,000) and South East ($78,850) regions in South Australia, and the Mersey-Lyell ($80,000) and Southern ($87,000) regions in Tasmania.
RPdata.com senior research analyst Cameron Kusher says falling land volumes and values is mirroring the experience of the established housing market: “Values of established residential dwellings have been easing in recent months, as have volumes, and the market for vacant land is experiencing a similar slowdown. The lack of sales activity is a worrying sign given the population continues to grow at a level well above average.”
“Despite the fact that sales volumes have fallen, it does not necessarily indicate falling demand and has more to do with affordability factors and the high price of serviceable land. Australia’s growing population is providing plenty of demand for vacant land, the issue is the price and location of the available land.”
Mr Kusher anticipates that the weakness in sales activity for vacant land will persist over the September quarter.
“Although economic indicators such as employment and consumer confidence are positive, the key housing market data including: building approvals, housing finance and values of houses and units are all flat or falling. Overall, this data suggests that sales activity for vacant land will continue to soften over the coming months,” he says.
