The latest report from Housing Industry Association (HIA) and CoreLogic revealed that land prices have significantly increased over the three years from March 2020 to March 2023, compared to the previous period.
Over the three years to the first quarter of 2023, land prices went up 23%, higher than the 5% increase in the preceding period.
CoreLogic economist Kaytlin Ezzy said while the rate hikes over the past year have resulted in some capital cities recording mild declines in recent months, overall land prices remained resilient due to the limited 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.”
HIA senior economist Tom Devitt said the surge in prices came despite the 37% fall in the volume of residential land transactions over the 12 months to March 2023.
“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.
“As the market begins to normalise from the shocks in recent years, it is expected that both sales and prices will return to their historical trend — this depends on the government’s ability to adequately plan its land release pipeline, which in turn depends on the availability of data across all stages of land release.”
Currently, it takes ten years, on average, to move land through the seven stages of land release.
Mr Devitt said any decision on land release can be expected to affect housing supply ten 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.
Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.29% p.a. | 5.33% p.a. | $2,773 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.19% p.a. | 5.10% p.a. | $2,742 | Principal & Interest | Variable | $0 | $0 | 80% |
| Disclosure | |||||||||||
5.39% p.a. | 5.43% p.a. | $2,805 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure |
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Collections: Mortgage News Property News
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