Residential land sales may signal future recovery
Residential land sales are "climbing off the mat", with growth recorded in three consecutive quarters, according to the Housing Industry Association (HIA).
The statement was made following the publication of the HIA-RP Data Residential Land Report, which noted that land sales volumes increased by 1.3 per cent in the September quarter compared with the three previous months.
While overall levels "remain low", HIA senior economist Andrew Harvey asserts, residential land sales tend to be an "early leading indicator" of recovery elsewhere in the sector. Over time, he explained, this could signal recovery in new home building activity.
He said: "Having land sales still at less than half the September 2009 peak speaks for itself in terms of how far the market has come off and adds to the already strong case for stimulatory policy, both in terms of further rate cuts and fiscal measures to stimulate new home building."
Recent cuts to the cash rate made in November and December last year may also buoy the confidence of buyers.
South Australia executive director of the HIA Robert Harding asserted that first homebuyers are beginning to "cautiously" drift back into the market.
"The number of loans to first homebuyers was up 12.5 per cent in the three months to November 2011, while the average size of a first homebuyer loan eased slightly," he said.