Land costs rocket with buyers out of space
23 Jun 10
Land costs rocket with buyers out of space
LAND prices are growing at their fastest pace since 2004, a new report says, raising fears that a housing shortage will push up prices and rents further.
John McCormack, CEO of Starr Partners Real Estate noted “The price of a typical block of undeveloped land jumped by 14 per cent last calendar year to a record $185,222, which is way ahead of inflation and construction costs”.
McCormack blamed the rise on lagging land supply, reflected by a fall in land sales in the December quarter. The number of land sales in the quarter was 4.6 per cent lower than the same period in 2008, he said, suggesting the rate of new home construction will start to sag this year as interest rates creep up.
In the previous September quarter, in contrast, land sales hit an annual growth rate of 26 per cent, raising hopes of a recovery in housing construction.
The HIA said the sharp slowing in sales did not bode well for Australia's attempt to make up for a shortage in housing, which could force up rents and inflame the nation's housing affordability woes.
A spokesman for the NSW housing minister, Tony Kelly, said there were 30,000 lots that were ready and serviced in Sydney and it was up to developers to lodge applications and start building.
Sydney was the most expensive market for new land, with the median lot fetching $275,000, 10 per cent more than a year earlier.