Land prices remained relatively stable over much of 2022, new data has revealed.
The latest HIA-CoreLogic Residential Land Report shows that new residential land prices declined by 0.2% in the September Quarter 2022 to $328,954, remaining relatively stable over the preceding two quarters.
Sales of new residential land reached a record low, with just 4,405 lots being sold in the September Quarter 2022.
On a per square metre basis, prices fell even further as the desire for space and amenity that characterised the pandemic continued to push up the size of residential lots, according to HIA Senior Economist Tom Devitt.
“The stabilisation of the price of new residential land is a relief following a 26% increase in less than two years”, Devitt said, adding a warning of ongoing underlying shortages of land.
CoreLogic Economist Kaytlin Ezzy agreed, saying it is unsurprising that land sales have continued to trend downwards to new record lows, given that much of the available land supply was consumed over the September Quarter and December Quarter 2020, when the HomeBuilder scheme increased demand for land.
“Similar declines have been seen through a number of construction metrics, including dwelling approvals, which have trended 10% below the decade average for the past six months, and dwelling commencements, which are tracking 32.4% below the peak recorded in June 2021”, Ezzy said.
“While a 0.2% decline over the September Quarter 2022 is fairly mild, we would expect the price falls to accelerate in the coming months.”
Australia’s residential land market typically follows the established dwelling market, which fell by 4.1% over the three months to September.
“Additional rate hikes, coupled with continually high construction costs, will add additional downward pressure on prices, with steeper declines expected in the December Quarter 2022, and into 2023”, she concluded.
