Australia - New land demand as prices surge
Sid Maher From: The Australian February 04, 2010 12:00AM
THE housing industry has warned that tight supply of land for new housing developments could choke off a recovery in new home building next year.
Housing Industry Association chief economist Harley Dale said the "million-dollar question" was whether the housing recovery could be sustained beyond this year as he reported a 33 per cent rise in the volume of residential land sales in the three months to September last year compared with 2008.
The rise in volumes came as the cost of residential land continued to rise, with median prices in the September quarter jumping 5.7 per cent to $181,158.
But questioning whether the recovery could be sustained, Mr Dale said: "If land is not released in a timely manner in sufficient quantity, then land prices will continue surging and the answer will be a resounding no."
Sydney remained the most expensive market with a median price for residential land of $290,000. Outside the capitals, Richmond Tweed in NSW was the most expensive with a median price of $255,000, followed by the Sunshine Coast on $241,500.
Mr Dale said Sydney faced continuing challenges to find affordable residential land and there were already questions about whether there was enough land in Western Australia and parts of Melbourne.
Federal Housing Minister Tanya Plibersek said the 33 per cent rise in residential land sales was good news. "The government agrees that issues remain when it comes to land supply and it's important that the states and territories develop long-term plans to ensure the timely release of serviced lots."
Opposition housing spokesman Gary Humphries called on the federal government to show some leadership on the release of land and "get their state colleagues to sit around a table" to ensure sufficient land releases were available.