Demand for lots: Squeeze felt in Sydney

85Pressures on the residential land market put Sydney property owners in a good position, new research shows.

The Housing Industry Association (HIA) released a statement on April 30 regarding the latest HIA-RP Data Residential Land Report, which highlights areas where supply of residential building land is failing to keep up with strong demand.

Sydney was noted as a key market, alongside Brisbane and Perth. During the December quarter, there was low turnaround in the residential land market in Sydney. The report paints a picture of a city that’s still a prime spot for homeowners and investors. The findings indicate that the market is one for sellers rather than buyers.

Tightening conditions

“Conditions in Australia’s residential land market continued to tighten during the December 2013 quarter”, the HIA release stated.

Total residential land sales across the country dropped by 1.8 per cent during 2013’s final quarter.

This figure comes on the back of the September quarter’s decline in land market activity. Alongside two consecutive quarters of decreasing land market activity, median land prices during the December quarter increased.

The price rise in 2013’s final quarter bring median lot prices to the highest figure recorded, according to the HIA.

Shane Garrett, HIA senior economist, explained that the findings demonstrate “serious supply issues in the residential land market”.

According to a February report from Bankwest, 31 per cent of New South Wales dwellings are townhouses, units or semi-detached properties – the highest figure of the entire country. In the year to February 2014, just over nine out of 10 of NSW’s medium density housing approvals originated from Sydney.

However, despite the shift to medium and high density dwelling options, it appears that a squeeze on land supply is continuing to restrict buyers’ opportunities in the NSW capital.

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