HomeBuilder boosts residential land sales

By Gerv Tacadena

The HomeBuilder scheme has boosted the sales of residential land across the country, according to the latest HIA-CoreLogic Residential Land Report.

The report found a 42.7% increase in land sales over the last quarter of 2020.

Tim Lawless, head of residential research at CoreLogic, said the surge in vacant land sales since June is a testament to the popularity of the HomeBuilder program.

"With land sales and detached housing approvals surging through the second half of last year, it makes sense for the government to announce a twelve-month extension to the timeframes associated with starting construction," he said.

The federal government recently extended the construction commencement requirement of the HomeBuilder scheme to address the unintended delays due to the COVID-19 pandemic.

"With such a significant pull forward of demand due to HomeBuilder, we could see an easing in the number of vacant land sales in 2021 as the stimulus phases out and the higher entry costs make it more challenging for first home buyers to participate in the market," Lawless said.

Land prices in the December quarter started to reflect the increase in demand seen in the September quarter. On a national level, prices increased by 4.1% during the quarter.

"Land prices can lag behind changes in demand due to the length of settlement periods. Due to the timeframe between purchasing land and commencing construction, we expect the majority of land sales in the March quarter 2021 are unlikely to be directly related to HomeBuilder," said Angela Lillicrap, economist at the HIA.

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