Numbers buying land increase in March quarter
In a joint venture by HIA and housing industry watcher RP Data, the latest Residential Land Report has shown a 4.3 per cent increase over the March quarter in land sales for residential properties.
During the quarter, the weighted median residential land value in Australia also increased by 2.5 per cent, and is now sitting at $198,152. This figure represents a 2.4 per cent rise compared to the same period in 2012.
HIA chief economist Harley Dale said of the growth: "The March quarter update signals we are moving in the right direction, but as a key leading indicator land sales suggest the magnitude of a first stage new home building recovery will fall short of what the economy requires."
Tim Lawless, research director of RP Data, said that the number of people who were selling land successfully was heading in the right direction, although affordability constraints - especially those in capital city markets - might limit the extent of the recovery.
"The consecutive quarterly increases in land sales are certainly encouraging, " Mr Lawless said, "there has also been a lift in land values, ongoing increases in the value of land may restrict the extent of the recovery given the already restrictive land prices in certain regions, in particular capital city markets."
In capital cities during the March quarter median values for properties increased by 3.2 per cent to reach $225,781, which is 2.9 per cent up from the same period last year.
Mr Dale of the HIA pointed out that the clearest improving trends were limited to New South Wales and Western Australia, and that WA was the only state to have seen clear and consistent improvements in land sales for the last 18 months.
Meanwhile, Sydney and Perth are the two most expensive land markets in the country by "quite a margin", which Mr Dale attributes to the high taxes and charges related to land.
Master Builders Australia has noted a rise in dwelling commitments for five consecutive months, up 1.8 per cent seasonally adjusted in May alone.
Chief economist of MBA Peter Jones said that the figures suggest "that the recovery is starting to strengthen and is certainly welcome for the industry" and that builders are banking on more improvements to drive further work in the industry, which could be helped by the rising numbers of land sales for residential property development.