Land sale volumes are the lowest they have been in a decade, and prices are rising, making housing less affordable, according to a residential land report released this week by the Housing Industry Association and RPData.
The HIA-rpdata.com Residential Land Report found the volume of land sales fell sharply in the September 2010 quarter to be down 57 per cent on the same quarter in 2009.
At the same time, the median value of land in Australia rose by 2.8 per cent in the September 2010 quarter to $186,629. In the year to September 2010, the median value has increased by 5.2 per cent.
Land value in capital cities grew at a faster pace than Australia's regional cities, increasing by 5.3 per cent over the September 2010 quarter compared to 4.4 per cent for regional areas over the same period.
"The results show further increases in land prices and very low sales volumes, both of which bode poorly for housing supply and affordability in Australia," said HIA Senior Economist Andrew Harvey.
"Land price appreciation is a key cause of Australia's housing affordability problem, with higher prices cascading through the residential market to push up the price of both new and existing houses," he noted.
Mr Harvey blamed the rising land prices on a failure at all levels of government to implement policies to "achieve a timely supply of land for residential development."
"It's time that serious and urgent policy action is taken to ensure there is sufficient serviced land for residential building," Mr Harvey added.
RPdata.com senior research analyst Cameron Kusher said the escalating cost of land was not only impacting the affordability of new homes but also that of existing housing stock.
The report found that the five most expensive land markets were:
- 1. Sunshine Coast, Queensland, with a median lot price of $280,000;
- 2. Sydney, NSW, $269,000;
- 3. Perth, WA, $245,000;
- 4. Gold Coast, Queensland, $230,000; and
- 5. Richmond-Tweed, NSW, $225,700.
The five least expensive land markets were:
- 1. Murray Lands, SA, with a median lot price of $82,500;
- 2. Mallee, Victoria, $83,000;
- 3. East Gippsland, Victoria, $83,250;
- 4. Eyre, SA, $85,000; and
- 4. Northern, SA, $85,000.