Future looks good for home building

By: Paul Simpson

23 May, 2018

New houses are expected to grow like mushrooms over the next twelve months after a surge in land sales, according to a report released this week by the Housing Industry Association (HIA).

New houses are expected to grow like mushrooms over the next twelve months after a surge in land sales, according to a report released this week by the Housing Industry Association (HIA).

The latest HIA-RP Data Residential Land Report points to further upward momentum in detached house construction in 2013/14.

The volume of residential land sales posted strong growth of 18.2 per cent in the June 2013 quarter to reach a level of 17,170.

“This is the highest quarterly volume achieved since the March quarter of 2010,” said HIA Chief Economist, Harley Dale.

“The recovery in residential land sales is impressive, but from a very low base.

“Land sales volumes highlight the prospect of further growth in detached house starts in 2013/14 following a modest lift of 3.7 per cent in 2012/13.

“That would be a very positive outcome for both the new home sector and the wider economy”, Dale said.

The price of residential land has been a lot more modest, increasing just 1.7 per cent over the year.

According to RP Data’s research director Tim Lawless, the improved vacant land market conditions are in line with improvements across the broader housing market.

“The housing market has been back in growth since mid-2012 with both the rate of capital gains and transaction volumes gathering some momentum during 2013.

“It should come as no surprise that the Sydney housing market, which remains well undersupplied relative to the rate of population growth and is recording the highest rate of capital gain currently, is one of the primary drivers behind the lift in national vacant land sales.

“While Sydney has posted a solid improvement in land sales, we are also seeing a substantial increase in the number of blocks sold in Melbourne, Brisbane and Adelaide over the June quarter,” Mr Lawless said.

In the June 2013 quarter the weighted median residential land value for Australia’s six state capitals increased by 0.2 per cent to $219,863. This value was 2.4 per cent higher when compared to the same period in 2012.

The median value for Regional Australia was $153,710 in the June 2013 quarter. This represented a quarterly decline of 1.0 per cent and a 0.1 per cent annual reduction.

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