Australian residential land sales have reached their lowest level in a decade, after almost halving from a year earlier, a housing report shows.
The HIA-RP Data Residential Land Report found the volume of land sales fell sharply in the December 2010 quarter, with sales down by 40.4 per cent compared to the same quarter in 2009.
The fall in sales comes as the weighted median land value for Australia grew by 4.1 per cent in the quarter to $194,161, the report found.
Over the year to December 2010, the median value was up by 5.9 per cent. HIA economist Matthew King said the results highlight the ongoing deterioration in new home affordability.
“The sharp drop in the volume of land sales signals a very weak 2011 for new home building,” Mr Kind said.
“Quite apart from the considerable damage wrought by the interest rate hikes of last November, new housing continues to sag under the weight of the excessive cost of serviceable land.”
Sydney remains the most expensive place to buy residential land, with a median value of $269,000.
Other expensive areas to buy land include the Sunshine Coast, with a median value of $240,000 and Melbourne coming in at $220,000. Melbourne also recorded a 50.1 per cent decline in land sales in the December quarter, compared with the same quarter in 2009.
“The half year result was also extremely weak, with land sales 58.8 per cent lower in the six months to December 2010 compared with the six months to December 2009,” the report said.
The report also found that residential land values in capital cities had grown by 5.9 per cent in the December quarter and 8.2 per cent higher in annual terms. Across the capital cities, Melbourne saw the highest growth in land values, rising by 13.5 per cent in the quarter, while Sydney was up by 3.6 per cent. Hobart saw a 14.5 per cent drop in land values in the month.
The three most affordable land markets in the country are Southern Tasmania, Murray Lands in South Australia and northern South Australia, all of which had median lot prices of $80,000 or less, the report said.