RESIDENTIAL LAND SALES IN PERTH REACHED ITS HIGHEST LEVEL SINCE THE PEAK OF NEW DWELLING DEMAND IN EARLY 2006
The largest developers in Perth recorded a 23.4 per cent rise in land sales over the December quarter and 77 per cent more sales over the year.
Urban Development Institute of Australia (WA Division) CEO Debra Goostrey said the Reserve Bank of Australia’s monetary easing was a catalyst for resurgent activity in the property development sector.
“After several years of strong population and wage growth, many people wanted to move but were uncertain whether it’s the right time,” Ms Goostrey said.
“As mortgage rates fell and Perth rents increased, significant numbers poured into home ownership and gave confidence to existing buyers that they are likely to sell their property.”
“These first and existing home buyers are taking advantage of five to six years of stable land values and purchasing homes in new developments.”
Ms Goostrey said the average block in Perth sold for $231,000 and half of the vacant lots sold by the largest developers in Perth were priced under $200,000 in 2012.
Figure 1 – Number of lots sold, Perth (inc. Peel)
Ms Goostrey said the development industry is still facing significant hurdles and there is the possibility we will face land shortages within the next twelve months as the land currently being developed is snapped up by buyers.
“Although there is still more land available than during the peak of the boom there is concern that the industry may not be able to meet demand if the market recovery strengthens rapidly,” Ms Goostrey said.
| Description | Dec-12 | Sep-12 | % change |
|---|---|---|---|
| Lots sold (# of lots) | 2,563 | 2,077 | up 23.4% |
| Lots sold ($m) | 568.5 | 470.2 | up 20.9% |
| Average size of lots sold (m2) | 432 | 457 | down 5.4% |
| Average price of lots sold | $221,800 | $226,400 | down 2% |
| Average price per sqm | $434 | $443 | down 2% |
“Industry professionals continue to cite a slow approvals process and difficulty funding infrastructure as two of the biggest constraints to the timely provision of residential land however capacity constraints, especially skilled labour, are now emerging.”
“Rental and housing affordability concerns cannot be tackled if unwieldy red and green tape and a multilayered approvals system continue and UDIA is calling for a whole of government review of the approvals system to improve efficiency and effectiveness.”