Sales of land for housing continue to improve but still fall short of demand, according to a new report.
The latest HIA-RP Data Residential Land Report provided by the Housing Industry Association (HIA) and property analytics provider RP Data shows that residential land sales increased by 4.3 per cent in the March 2013 quarter.
RP Data’s research director Tim Lawless said that while land sales are broadly starting to head in the right direction, affordability constraints, particularly in capital city markets could limit the extent of the recovery.
“The consecutive quarterly increases in land sales are certainly encouraging, albeit the rate of growth has slowed from 11.9 per cent in the December 2012 quarter to 4.3 per cent in the March 2013 quarter”, Lawless said.
“With the increase in sales, there has also been a lift in land values and ongoing increases in the value of land may restrict the extent of the recovery given the already restrictive land prices in certain regions, in particular capital city markets.”
The increase in land sales is in line with the improving trend in sales across the detached house and unit markets throughout the second half of 2012 and early 2013.
“Lower interest rates are clearly encouraging broadly improving housing market conditions and hopefully this recent momentum can continue, especially with first home buyer incentives now being directed specifically at new construction across a number of states”, Mr Lawless added.
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.