The Housing Industry Association (HIA) has announced that expectations for new-home builds will remain flat throughout 2012, and experts are taking it as a further sign that the Australian government must take action through policy reform to stimulate the country’s struggling housing market. Specifically, critics say high interest rates and a lack of reform in cooperatives and state housing is to blame. The comments came after the HIA report revealed land sales are at a record low, dropping 27% over the year ending in December and 40% from the long-term average. Stats keepers at RP Data note the sales figures are lower than at any other time in the last decade. For more on this continue reading the following article from PropertyWire.
New home building in Australia is set to remain weak in 2012 with land sales hitting a new low, according to the Housing Industry Association, the voice of Australia’s residential building industry.
‘The volume of residential land sales has been below the previous trough set during the global financial crisis for five consecutive quarters now. Over the five quarters to December last year land sales ran at a volume 40% lower than their long term average,’ said HIA chief economist, Harley Dale.
‘This situation points to there being no discernible recovery on the horizon for new home building, further highlighting that current policy settings in Australia are inappropriate,’ he pointed out.
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‘Interest rates are too high, plans for contractionary fiscal policy untimely and too tight, state housing reform too slow, and cooperative reform efforts across levels of government too difficult to find,’ he added.
The volume of residential land sales fell by 27% over the year to the December 2011 quarter. The weighted median residential land value in Australia increased by 1.7% in the December 2011 quarter to be 0.7% higher when compared to the December 2010 quarter.
The HIA report also shows that the median value for capital cities increased by 2.8% in the December 2011 quarter to $219,001, some 1.5% higher than a year earlier. The median value for Regional Australia fell by 0.7% in the December 2011 quarter to $153,833, to be down by 1% on the December 2010 quarter.
RP Data’s research director Tim Lawless believes conditions in the vacant land market are the weakest in more than a decade. ‘Vacant land markets are substantially weaker now than what they were back in the height of the GFC and the duration of the downturn has been sustained for five quarters,’ he said.
‘Over the 2011 calendar year we have seen just under 44,000 land sales which is 46% lower than what was recorded over the 2009 calendar year. Compare that to the dwelling market where transaction volumes are about 28% lower compared with the 2009 highs, which is a weak result in itself, and the significant weakness in the vacant land market becomes even more apparent,’ he added.
This article was republished with permission from PropertyWire.