Residential land sales are tanking as prices go through the roof

Photo: Getty Images

It’s getting a lot more expensive to buy a vacant residential land in Australia.

According to the latest quarterly HIA-CoreLogic RP Data residential land report, the median price for a vacant residential lot rose by 5.2% to $234,600 in the final quarter of 2015, the highest level on record.

Moving in the opposite direction, the number of lots sold during the quarter slid 1.6%, taking them back to lows not seen since the December quarter 2012.

According to the report, vacant residential land sales were estimated to have fallen in Sydney (-22.3%), Brisbane (-20.1%) and Perth (-7.2%), offsetting increases in Melbourne (+13.2%) Adelaide (+27.5%) and Hobart (+7.2%).

Over the year sales fell by 14% across Australia, with that figure extending to 19% for capital cities.

According to Shane Garrett, senior economist at the HIA, the divergence between price and sales over the quarter demonstrates a lack of adequate supply being added to the market.

“Once again, we’ve had another quarter of dwindling land lot sales and pretty stiff price increases – evidence of insufficient supply,” Garrett argued.

“We need much greater emphasis on the delivery of new residential land supply involving better models for infrastructure delivery and a real sense of urgency in the planning process.”

The chart below, supplied by the HIA, reveals the recent trend in both lot prices and sales volumes.

For those in the market looking to build on a vacant lot, here are the most expensive regions to buy, followed by those where prices are cheapest.

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