Residential land sales suggest there is no quick turnaround in sight for Western Australia’s struggling new homes sector, despite a 9 per cent uptick in the volume of sales over the June quarter.
The Housing Industry Association-rpdata.com Residential Land Sales report showed lot sales in Perth in the June quarter reversed their decline, but remained 23.5 per cent below the volume achieved the previous year.
In the six months to June 30 lot sales were down 32 per cent compared to the previous corresponding period, the report said.
The median residential land value in Perth was $235,000, 2.2 per cent down on 12 months earlier, and 12 per cent below the peak of $267,000 achieved in March 2006.
“The boom and bust cycle in WA over the last decade is enough to cause a bad case of vertigo,” the report said.
“Life in Western Australia’s residential land and new home building markets could be so much easier if someone could orchestrate a steady supply of affordable residential land.”
In regional WA, median land values in the South West hit $169,000, up 5.6 per cent on the March quarter.
Lot sales rose 1.5 per cent by outside the metropolitan area, but the upwards move was off a very low base, the report said.
Over the six months to June 2011 lost sales in the South West and South Eastern regions recorded contractions of 35 and 44 per cent, respectively, compared to the same period last year.
Nationally, the volume of land sales increased by 18 per cent over the June quarter but still remained 25 per cent lower than the June quarter last year and 51 per cent lower than their June 2004 quarter peak.
The median land value across Australian capital cities was $214,656, 5 per cent higher than the previous year.
“The profile for residential land sales remains weak, indicated that the earliest we can expect a turnaround in new housing starts is the March 2012 quarter,” HIA chief economist Harley Dale said in a statement.
“It is encouraging that land sales have stopped falling, but there is a long road ahead to ensure a sustainable recovery in new home building levels commensurate with the housing requirements of Australia’s population.”