Land for Sale Rises in Value
The median price of land for sale rose in the three months to December 2012, recent figures have revealed.
A report by the Housing Industry Association (HIA) and RP Data showed the average value of vacant land jumped 1.2 per cent quarter on quarter to $195,866 – 1.7 per cent higher than in the same period the previous year.
There was also a 13.6 per cent rise in residential land sales, regaining lost ground after the market fell 20 per cent in the preceding quarter.
Across capital cities, the median value of land for sale climbed 1.8 per cent to $223,085 during the December quarter – which was 2.9 per cent higher than the corresponding period in 2011.
HIA chief economist Harley Dale said the results were "encouraging", although they did not signify a broad-based recovery in residential construction for 2013.
"Furthermore, evidence of emerging land price pressures in Sydney and Perth highlight the importance of ensuring both a timely flow of readily available land and the pursuit of other policy reforms to reduce the excessive cost component to land supply," he explained.
Mr Dale also noted the recent tightening in available credit for residential developments, which is being compounded by taxes levied on new housing – a dynamic he claimed is hurting the Australian economy.
Tim Lawless, RP Data research director, echoed Mr Dale's sentiments, claiming there was cause for optimism, but not enough evidence to suggest a sustained recovery is on the horizon.
However, he said the residential real estate market has experienced a strong start to the year, with average house prices up 2.8 per cent over the first quarter.
"Transaction volumes for dwellings have also been showing a consistent improvement," he stated.
"Hopefully that implies that we should see another quarter of higher vacant land sales when the data becomes available in three months' time."
According to Mr Lawless, the figures showed land sales are at relatively low volumes, yet prices are at a record high.
Outside of the capital cities, median values slipped slightly, with regional Australia land sales being worth an average of $154,370 – a 0.2 per cent quarterly decline and 0.9 per cent lower than the same period in 2011.
Western Australia and New South Wales remained the two dominant markets, Mr Lawless continued, although sales outside of these states were subdued.