The latest HIA-RP Data Residential Land Report indicates the potential for further upward momentum in detached house construction in 2013/14, with the volume of residential land sales posting strong growth of 18.2 per cent in the June 2013 quarter.
"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."
"There is a close (lagged) relationship between RP Data-HIA land sales and the number of detached house starts," noted Harley Dale. "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."
"The level of sales in 2012/13 was 56,782. Sales are therefore now back to a level equivalent to the GFC trough but no higher - the level is still 21 per cent below the historical average," remarked Harley Dale.
"In terms of residential land prices, growth has generally been modest. A flat June 2013 quarter for the weighted median residential land value saw an increase of only 1.7 per cent over the year, less than general inflation," added Harley Dale. ,
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," said Mr Lawless.
"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 concluded.