The volume of residential land transactions has fallen 37% over the 12 months to March 2023 which will see the volume of new home commencements slow over the next year, according to HIA Senior Economist Tom Devitt. Source: Timberbiz
The HIA-CoreLogic Residential Land Report provides updated information on sales activity in 51 housing markets across Australia, including the six state capital cities.
“An acute shortage of available land saw the price increase by 23% over the three years from March 2020 to March 2023. This compares to just a 5% increase in the three years before that,” Mr Devitt said.
“This land shortage continues to drive up prices despite the sharpest increase in interest rates in over 30 years and will weigh on home building activity in the coming years.”
He said that as the market began to normalise from the shocks in recent years, it was expected that both sales and prices would return to their historical trend.
This would depend on the government’s ability to adequately plan its land release pipeline, which in turn depended on the availability of data across all stages of land release.
“On average, it takes 10 years to move land through the seven stages of land release,” Mr Devitt said.
“Decisions made today about land release can be expected to affect housing supply 10 years from now.
“The time it takes to progress from a vacant block of land to a block that is shovel-ready with titles could be a major roadblock to the government’s plan to build a million homes over the next five years” he said.
CoreLogic Economist Kaytlin Ezzy said that although the rate-tightening cycle has seen some capitals record mild declines in recent months, land prices overall had remained fairly resilient, thanks to the shortfall in available land supply.
“While sales numbers have eased significantly from the peak volumes seen during the HomeBuilder scheme, it will take some time before we see a more notable recovery in supply levels,” she said.
“Until then, we can expect land prices will remain elevated, dwelling approvals will continue to track below average, and house commencements will continue easing.”
