Perth leads the lot, despite rising prices

by Ainslie Chandler

“Residential lot sales soared by 50 per cent in Perth, and by 42 per cent in Sydney, during the six months to the end of March compared to the same period in 2012.
The Perth surge came despite the city remaining the most expensive quarter in which to buy land per square metre, and without the improved home-buyer incentives that bolstered Sydney and Adelaide markets.
Housing Industry Association and RP Data figures showed that in Perth, land prices rose $22 per square metre to hit a media lot price of $250,000 or $558 per square metre.
The Perth-based executive chair of Hegney Property Group, Gavin Hegney, said the figures were showing the momentum that had been gathering in the market for a year, as migration remained strong and rental vacancy tight.
The HIA attributed the Sydney spike to the first owners grant rising from $7000 to $15000 in October 2012.
Sydney’s median lot price was higher than Perth’s at $285,000, but the price per square metre was lower at $549.
nationally, land sales rose 4.3 per cent in the March quarter, after gaining 11.9 per cent in the tree months prior.
the rise can be largely attributed to a 5.5 per cent rise in capital city land sales, which trumped a 2.4 per cent rise in regional sales.
“At this juncture, any clear improving trends are limited to New South Wales and Western Australia. WA is the only state to have achieved clear and consistent improvements in residential land sales over the past 18 months,” HIA chief economist Harley Dale said.
The weighted median residential lot value rose 2.5 per cent in the quarter to $198,152, driven by a 3.2 per cent lift in the capital city figure, to $225,781.
Adelaide lots rose by 14.8 per cent on the prior corresponding period, after the grant for buyers building their first home rose from $15,000 to $23,500 and incentives for established homes dropped. Melbourne land sales dipped 4.9 per cent in the half-year, as the state’s FHOG for new dwellings was cut from $20,000 to $7,000 in July 2012. The cut to the grant drew demand forward during the June 2012 quarter.
Brisbane’s lot sales weakened markedly, despite the FHOG in October 2012 rising from $7,000 to $15,000 for new dwellings. Lot sales dropped 16.6 per cent year on year.
Outside the capital cities, the most expensive residential land markets were the Sunshine Coast at $418 per square metre, the Gold Coast at $285 and Victoria’s Barwon at $385.”

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