Residential land sales in Melbourne have slumped to their lowest level in a decade, according to the latest HIA-RP Data Residential Land Report. At the same time the cost of blocks soared by more than 13 per cent, putting further pressure on new home buyers.
The new home sector in Melbourne’s grew and interstate migration was strong over the last few years because new house and land packages were cheaper in Melbourne than any other capital city. But with the median land value jumping by 13.5 per cent to $220,000 per lot – the highest growth nationally – this now makes Melbourne the third most expensive capital city to buy land in Australia.
And in response sales on the city’s fringes fell sharply, down 50.1 per cent in the December quarter compared with the same quarter in 2009.
The new figures follow reports in The Age showing only three out of every 10 lots for sale in new housing estates across Australia were accessible to average-income first home buyers.
”The escalation in land values highlights an ongoing deterioration in new home affordability,” HIA economist Matthew King said.
The sharp drop in land sales followed similar declines in the previous September quarter and points to new home building activity being very weak this year, Mr King said.
In the three months to February, new home lending fell 7 per cent, housing approvals dropped 3.2 per cent, and commencements were down 5.3 per cent, the report noted.
The trend towards fewer sales and higher prices was reflected across Australia.
Nationally residential land sales were at their lowest levels in a decade, while median land values jumped by 4.1 per cent to $194,161 over the quarter.
Sydney was still the most expensive city to buy residential land, with a median value of $269,900. The Sunshine Coast and Perth were next, with a median land value of $240,000.
”As long as we fail to meet the underlying requirement for new housing, rental markets will remain extremely tight, and would-be home buyers will be increasingly deterred by poor housing affordability,” the report said.
Melbourne’s population surge, coupled with the slow land supply, was ”extremely detrimental to the cost of new housing during this period of growth,” the report said.
Source: The Age
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