Australia’s residential land market showed marked signs of increased supply pressures during the December quarter, according to the latest HIA-CoreLogic Residential Land Report, published jointly by the Housing Industry Association (HIA) and CoreLogic.  

The weighted median land lot price rose by 4.8% to $254,406 during the December quarter, which was 9.3% higher than a year earlier. The report also indicates that the estimated number of land lot sales across Australia totalled 10,756 during the December quarter; down by 22.7% compared with the previous quarter and 39.5% lower than a year earlier.

Based on land transactions during the December quarter, the annual pace of residential land price growth was strongest in Melbourne (+16.3%), followed by Sydney (+10.7%) and Adelaide (+10.3%). Over the same period, Perth’s residential land market showed the weakest price growth (+0.9%), with modest land price increases recorded in Brisbane (+5.4%) and Hobart (+3.1%).

“The volume of residential lot transactions appears to have dipped sharply during the December 2016 quarter, placing pressure on land prices,” said Shane Garrett, HIA’s senior economist. “With land being such a crucial ingredient in new home supply, more challenging cost conditions in the market for residential land in 2017 will make the battle to improve housing affordability more difficult.”