By JOHN VAN KLAVEREN
THE MEDIAN price of a vacant building block in Geelong has jumped alarmingly, according to a latest Housing Industry Association (HIA) residential land report.
The Barwon region’s median land price is now $204,000, up from $179,000 two years ago.
The 12 per cent increase was about three times the rate of inflation over the same period.
The Geelong region ranks as the fifth most expensive housing market in the country.
The Independent reported last year that Geelong was the 19th most unaffordable property market out of 378 major international centres.
Geelong ranked alongside the ex-urban area of outer-London for unaffordability in an 11th annual International Housing Affordability Survey.
HIA Chief Economist Harley Dale said land supply shortages were shutting out home buyers.
The March 2015 quarter report showed land price growth accelerating as turnover fell sharply, Mr Dale said.
“This is not a good combination – escalating residential land values and a related decline in sales volumes.
“The combination of significantly reduced turnover and strong price growth suggests that supply bottlenecks in residential land are intensifying.
“That is pricing new-home buyers out of the housing market and capping the construction cycle at a lower level than would otherwise be the case.
“The provision of adequate, affordable, shovel-ready land is a crucial element to addressing housing affordability pressures across the residential property market.
“More needs to be done to expedite supply.”
The latest figures represent the third consecutive decline in land transactions in Australia.
RP Data research director Tim Lawless said the trend toward fewer land sales had been evident since mid-2013.
“The number of vacant land sales peaked over the June 2013 quarter and have since reduced by almost 30 per cent,” he said.
“To see the price of land consistently rising over the same timeframe suggests low supply is the main driver of this price growth rather than a slowdown in demand.
“Higher land prices translate to more expensive housing, which is an unfortunate circumstance for those looking to purchase a detached house.”
