Prices for vacant lots continued to increase, despite declining sales volumes, according to the latest Housing Industry Association (HIA) CoreLogic Residential Land Sales (HIA) report.
During the September quarter, land prices in Australia reached $ 279,949, an increase of 0.8% for the quarter and 0.9% for the year, making it a record. However, the number of residential lots sold declined 16.2% in the same period, down 25.8% from the 2017 figure.
Declining demand for land would generally result in lower land prices. The "abnormal price and sales behavior" in the land market, in which prices have risen with falling demand, is likely to reflect the shift in the impact of a significant change in market conditions. market, the report said.
"After five years of unusually intense commercial activity, a credit crunch and a loss of market confidence have resulted in a rapid drop in sales and approvals of new homes. This slowdown is evident in land sales and, unfortunately, the decline in demand has not yet resulted in lower prices, "said IHA chief economist Tim Reardon. .
In addition, this situation is putting pressure on the new housing market and could hinder activity on the housing construction market.
If the cost of new home production continues to increase, the construction of new homes will be reduced, customers opting for the purchase of a well-established home or carry-over. a purchase of a new house, says the report.
"It's the lack of supply of new housing that has been the main factor behind the rapid growth in housing prices over the past two decades," says the report. .
The March 2019 edition of the HIA-CoreLogic Residential Land Report assesses activity in 47 markets in Australia, including six state capitals.
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