Land value surge in NSW
The growth of the real estate market in New South Wales has increased the value of residential land in the state by 11 per cent in the last year. That means an extra $120 billion has been added to the value of land, making a total of $1.12 trillion. The Daily Telegraph reports that Woollahra is now Sydney’s most expensive suburb with growth of 13.8 per cent making the cost of an average residential plot $1.4 million. Previously the top-priced suburb was Mosman which now averages $1.39 million after annual increase of 7 per cent. Waverley, Hunters Hill, and Manly have also seen healthy increases. There was also a large increase in the median price of residential land in Willoughby, up 37 per cent to $1.08 million.
Construction contraction in December
The construction industry saw a slowdown in activity during December according to new figures from the Australian Industry Group/Housing Industry Association. The index of Australian Construction Performance saw a second month of decline in activity although new orders increased slightly. There had been five months of growth in construction prior to November with building of houses and apartments particularly strong while commercial construction failed to pick up pace. AI Group chief economist Julie Toth says a lack of new orders for commercial construction was a concern but was upbeat about the residential outlook: “In housing, new orders look to have stabilised after growing strongly for much of 2014. This stability bodes well for the pipeline of work that will commence in the all important new housing sector in 2015.” HIA economist Diwa Hopkins commented that although the activity in the housing sector has declined for two months they still expect the building of houses and apartments to be “elevated” this year but without hitting the record levels seen last year.
Property Council reacts to building approvals figures
While construction activity may have slowed towards the end of last year, those looking to build in 2015 were not taking things easy. ABS data released last week showed a solid rate of building intentions with approvals rising for sixth months through to November 2014. The Property Council of Australia’s Nick Proud says: “It appears that the number of homes being built is finally catching up with population growth. 18,245 dwellings were approved in November to support 199,174 homes approved for the full year ending November 2014, which continues to shore up the pipeline for national residential activity and promote confidence in the industry.”