24/07/2009 - 10:03

Perth land price up 2.3% in March qtr

24/07/2009 - 10:03

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The cost of land in Perth is creeping higher with the median price at $225,000 in the March quarter, but prices are more than 10 per cent lower compared to the same period last year.

Perth land price up 2.3% in March qtr

The cost of land in Perth is creeping higher with the median price at $225,000 in the March quarter, but prices are more than 10 per cent lower compared to the same period last year.

New figures from the Housing Industry Association and RP Data show the median price of land in Perth climbed 2.3 per cent in the March quarter from a base of $220,000 recorded in the previous quarter.

It was the lowest increase compared to other capital cities with the median price in Melbourne surging 9 per cent to $170,000.

Hobart was the only capital city to post a decrease, with the price falling 0.4 per cent to $134,500.

Nationally, the median price of land rose 7.6 per cent to $197,045.

HIA chief economist Harley Dale said the increase pours further cold water on the "doom and gloom" assessments of residential property in 2009.

"Very low variable mortgage rates, the First Home Owner's Grant boost, and attractive deals from volume builders have generated increased new home demand," Dr Dale said.

"The associated benefit to economic activity and employment will become apparent from mid 2009."

RP Data national research director Tim Lawless said the figures show the number of vacant land sales bottomed in the September quarter last year.

"The upwards trend in sales volumes suggests buyers are coming back into the market thanks to interest rates being at 45 year lows and affordability returning to 2002 levels, not to mention the additional stimulus of the First Home Buyers Boost," Mr Lawless said.

Compared to the March quarter last year, the cost of land in Perth suffered the largest drop with a fall of 9.3 per cent from $248,000.

The median price of land in the city twice hit its peak of $265,000 in 2007 in the March and December quarters.

Dr Dale today called for governments to tackle the land supply issue.

"A lack of timely and adequate land supply, high development charges and taxes, and onerous planning regulation still present a serious challenge to new home affordability," he said.

"These structural barriers led to an unnecessarily large surge in land prices in the last housing up-cycle. It is a no-brainer that the same thing will happen again unless we work tirelessly to reduce these barriers."

 

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