The price of residential land has continued to rise despite a fall in demand, according to a report published by the Housing Industry Association.
The March 2019 edition of the HIA’s Residential Land Report provides updated activity in 47 markets across Australia, including the state capital cities.
In the latest quarter, the average price for housing allotments across Australia rose 0.8% to reach $279,949 – despite a 16% decline in the number of home sites sold.
“After five years of exceptionally strong sales activity, a credit squeeze and a loss of market confidence led to a fall in new home sales and approvals,” says HIA chief economist Tim Reardon.
“The impact of the fall in demand for new homes and the rise in land prices places additional pressures on the new home market and could further impede activity in the home building market.”
The reduction in settled land sales is most evident across the Sydney and Melbourne markets where broader housing market conditions have been weakening since mid-to-late 2017.
Despite the drop in sales activity, land prices are falling at a much slower rate than housing prices in Sydney, while Melbourne land prices on a rate per square metre basis are substantially higher than a year ago.