09/10/2007 - 14:08

High land prices, low supply drags WA lot sales down 64%

09/10/2007 - 14:08

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A failure to meet land supply targets and high land prices dragged the number of residential housing lots sold in Perth down 64 per cent in 2006-07, according to Housing Industry Association Executive Director Sheryl Chaffer.

High land prices, low supply drags WA lot sales down 64%

A failure to meet land supply targets and high land prices dragged the number of residential housing lots sold in Perth down 64 per cent in 2006-07, according to Housing Industry Association Executive Director Sheryl Chaffer.

 

 

The full text of an announcement regarding the second HIA-Australian Property Monitors Land Monitor Report is pasted below

Failure to meet land supply targets and high land prices continue to hamper new home activity.

Commenting today on the release of the second HIA-Australian Property Monitors Land Monitor Report, HIA's Executive Director Western Australia, Ms Sheryl Chaffer said that failure by Government to meet supply targets and the wide range of statutory charges and taxes imposed by Government were making land unaffordable. There is currently no incentive for builders or developers to invest capital to convert undeveloped land into serviced allotments.

The price for lots in Perth has risen very slightly up 0.4% from last quarter but over the year prices are up 28%. The fact that prices have remained high means that there is still demand for land in the Perth market.

To try and bring the price of land back to affordable levels developers have adjusted the size of lots being released.

Nationally, the largest decrease in the average lot size were recorded in Perth, down 4.6 per cent over the quarter.

Over the June 2007 quarter, the total number of lot sales (for blocks less than 1000 square metres) in Perth fell by 17.3% compared to an average fall of 10.7% for other capital cities. Despite innovation in the size of blocks to reduce the price of land and bring buyers back into the market Perth land developers experienced the most severe decline in the number of lots sold with a 64 per cent decrease over the previous year.

Affordability of the land is the primary reason for market activity remaining so low. All levels of Government need to provide relief from the cost of levies, charges and government taxes because they are just too high and are a pushing cost beyond what people can afford.

"It is literally a case of the straw that broke the camel's back. Each level of Government needs to take more responsibility in this area. If new construction doesn't take place further price pressures will be placed on the existing housing stock," Ms Chaffer added.

HIA has developed a suite of proposals that would assist with the construction of more affordable housing. These proposals call for a partnership approach across the three levels Government.

"Sadly, there has been a propensity for government's to engage in a blame game. This provides no comfort for the more than one million households in housing stress. It is staggering that in a country that has enjoyed phenomenal economic growth why more Government funding can't be invested in delivering affordable housing solutions," said Ms Chaffer.

HIA has persistently argued for improvements to the process for the release of land and a reduction in levies, taxes and charges to improve housing affordability.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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