The number of land sales across Australia declined over the first quarter of the year, which could indicate a land shortage that could constrain building activity, according to a joint study by the Housing Industry Association and CoreLogic.
Over the first quarter of the year, land sales declined by 31.2%. Compared to the previous peak achieved in September 2020 quarter, land sales decreased by 42.5%.
"The decline in sales represents a shortage of available land as other leading indicators show there continues to be a significant number of new homes entering the construction pipeline,” said Angela Lillicrap, economist at the HIA.
Lillicrap said the surge in demand for residential land due to HomeBuilder saw developers bring forward as much shovel-ready land as possible.
"This somewhat kept a lid on prices during the short timeframe of the program, but the impact of inadequate land supply can now be seen in the March quarter prices," she said.
Tim Lawless, research director at CoreLogic, said the 4.7% increase in the median price of residential land — the sharpest since 2006 — was an indicator that demand has already outweighed the available supply.
"The surge in detached housing approvals to record highs has seen demand for residential land increase substantially and it will probably take several years for the pipeline of approved houses to work through to completion. In the meantime, land prices could rise further," he said.
