Mar­ket re­cov­ery starts to put pres­sure on res­i­den­tial land

Port Douglas & Mossman Gazette - - REAL ESTATE -

THE lat­est HIA-RP Data Res­i­den­tial Land Re­port pro­vided by the Hous­ing In­dus­try As­so­ci­a­tion and prop­erty in­for­ma­tion an­a­lyt­ics provider RP Data may be show­ing an early sign that res­i­den­tial land sup­ply is com­ing un­der pres­sure amid the cur­rent mar­ket re­cov­ery.

The vol­ume of res­i­den­tial land sales slipped slightly in the Septem­ber 2013 quar­ter, down by 2.8 per cent to 16,638, fol­low­ing the pre­vi­ous quar­ter’s strong re­sult.

How­ever, sales ac­tiv­ity in the land mar­ket was up by al­most 40 per cent com­pared with 12 months ear­lier.

The weighted me­dian res­i­den­tial land value in­creased by 2.9 per cent over the Septem­ber quar­ter alone, re­flect­ing the strong mar­ket de­mand con­di­tions.

‘‘Sup­ply bot­tle­necks ap­pear to be af­fect­ing the res­i­den­tial land mar­ket, play­ing a role in that price pres­sure,’’ noted HIA se­nior econ­o­mist Shane Gar­rett.

‘‘We have long em­pha­sised the im­por­tance of en­sur­ing that an ad­e­quate sup­ply of af­ford­able, shov­el­ready land will be cru­cial to any sus­tained re­cov­ery in new home build­ing,’’ com­mented Mr Gar­rett.

‘‘That task is im­per­a­tive now more than ever. All lev­els of govern­ment need to im­ple­ment the nec­es­sary re­forms to ad­dress the prob­lems af­fect­ing the res­i­den­tial land mar­ket. Re­duc­ing the ex­ces­sive taxes and charges on hous­ing as well as re­duc­ing plan­ning and land re­lease de­lays are key ar­eas that need at­ten­tion,’’ Mr Gar­rett urged.

‘‘De­spite the slip in sales vol­umes, the Septem­ber 2013 quar­ter still com­pares well with re­cent his­tory,’’ con­tin­ued Shane Gar­rett.

‘‘Land sales pro­vide a good in­di­ca­tion of de­tached house build­ing fur­ther down the line,’’ ex­plained Mr Gar­rett. ‘‘Ac­cord­ingly, we see the real prospect of ris­ing de­tached house build­ing ac­tiv­ity in 2014.’’

Ac­cord­ing to RP Data’s re­search direc­tor Tim Law­less, mar­ket ac­tiv­ity has var­ied sub­stan­tially across each cap­i­tal city.

‘‘The num­ber of res­i­den­tial land sales has been ac­cel­er­at­ing across Mel­bourne and Bris­bane although vol­umes re­main well be­low the re­cent highs recorded back in 2009. Perth, Ade­laide and Ho­bart have all seen some slip­page in land parcels sold over the Septem­ber quar­ter.’’

Mr Law­less con­tin­ued, ‘‘State gov- ern­ment in­cen­tives fo­cused on stim­u­lat­ing the new hous­ing sec­tor are clearly hav­ing their ef­fect, creat­ing de­mand in a sec­tor that pro­vides sub­stan­tial mul­ti­pli­ers for the econ­omy. We can ex­pect the higher num­ber of land sales to lead to more de­tached hous­ing con­struc­tion which in turn cre­ates jobs, and leads to more spend­ing on build­ing ma­te­ri­als, con­sumer goods, ap­pli­ances and home fur­nish­ings.’’

In the Septem­ber quar­ter the weighted me­dian res­i­den­tial land value for Aus­tralia’s state cap­i­tals in­creased by 3.3 per cent to $226,448. This value rep­re­sents a 3.4 per cent in­crease on the value in the same pe­riod in 2012. The me­dian value for Re­gional Aus­tralia was $157,756 in the Septem­ber 2013 quar­ter. This rep­re­sented a quar­terly rise of 2.1 per cent and an an­nual in­crease of 1.5 per cent.

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