This article is from the Australian Property Journal archive
SALES of residential land lots across Australia increased for the second quarter in a row, pushing prices higher.
According to the latest HIA report, land sales increased by 1,121 lots in the three months to September.
At the same time, HIA senior economist Shane Garrett said price pressures in the residential land market are greatest in the capital cities, with Sydney prices now approaching $1,000 per sqm.
The median dollar value per sqm of vacant land was recorded at $927 in Sydney, which is 32% higher than the next most expensive capital city, which is Perth where the rate per sqm is $701.
Overall, the report shows land lot price nationally rose by 3.3% during the quarter to another record high of $243,585. During the quarter, 18,510 land lot transactions are estimated to have occurred across Australia, 6.4% higher than the previous quarter but 7.3% lower than a year earlier.
During the six months to September 2016, land transactions experienced the largest increase in Perth (+5.5%) compared with the same period year earlier. Land turnover also increased in Hobart (+2.1%) over the same period. Land sales saw the largest reduction in Sydney (-29.9%) over the same period. Turnover also fell back in Melbourne (-13.5%), Adelaide (-5.1%) and Brisbane (-3.3%).
Research from Oliver Hume also shows the average time on the market for new land in Melbourne’s growth corridors has dropped below 60 days.
The research looked at nearly 200 projects throughout Victoria, and it shows the average time on market for land in Melbourne in the final quarter (three months to end of December) of 2016 was just 1.9 months, the lowest ever recorded.
Demand for land is also pushing prices higher and making lots smaller, with the average price per sqm of land in the city’s growth corridors now exceeding $570/sqm in the December quarter 2016. The median price of land reached $239,000 in the final quarter of 2016, up over 8% from $221,000 in the September quarter 2016. Over the same period the median lot size declined from 427sqm to 416sqm.
With the exception of the first quarter of 2015, the average time on market has now fallen or remained steady in every quarter since the third quarter of 2013, after peaking in the current cycle at 6.6 at the end of 2012.
Oliver Hume research manager George Bougias said despite the increases, Melbourne is still below many other regions in Australia.
Oliver Hume director Paul Ciprian said while competition had kept prices in check from 2012 to 2015, the last 12 months has seen demand impact prices and average size.
“With prices and sizes going in different direction we have seen a sharp kick in the average price per sqm, up over 11% in 12 months and over 23% in the last two years,” he said. “These price increases may moderate demand in the medium term but we do not see any macro issues that will impact the trend in the short term. So we expect prices to continue rising throughout 2017.”
Australian Property Journal
