Residential lot sales across Australia fell in the first three months of this year, setting a new record low for land sales, according to the March 2019 edition of the HIA-CoreLogic Residential Land Report. 

Residential lot sales across Australia reached a record low of 7,236 in the March 2019 quarter, almost 50 per cent below the average of the past decade of 13,682.

HIA Chief Economist Tim Reardon said the fall in sales can be attributed to the decline in demand for new homes, which reflects the downturn in the market during 2018 and 2019.

At a glance:

• Residential lot sales across Australia fell in the first three months of this year, setting a new record low for land sales, according to the March 2019 edition of the HIA-CoreLogic Residential Land Report. 
• Residential lot sales across Australia reached a record low of 7,236 in the March 2019 quarter, almost 50 per cent below the average of the past decade of 13,682.
• Sydney continues to be the most expensive city for land in Australia with a median price of $435,000. The gap between Sydney and the second most expensive city, Melbourne, is decreasing. Richmond-Tweed is the most expensive regional market with a median price of $350,000.

“While the volume of sales decreased considerably, this was not reflected in the change in the median price of land. Nationally, the weighted median price increased by 0.9 per cent in the March 2019 quarter compared to the December 2018 quarter. 

“A shortage of land is one of the factors that have driven home prices to increase over the past decade. An adequate supply of land is required to avoid a deterioration in affordability," Mr Reardon said. 

Click here for more information on the report.

According to CoreLogic’s Research Director, Tim Lawless: “The consistent trend towards fewer vacant land sales, at a time when population growth remains strong, highlights the need for improved town planning policies and land release strategies that run parallel with a strategic infrastructure plan.

"Well located developable land remains in short supply which has pushed the price of vacant land higher over the long term, adding to affordability challenges and a reduction in lot sizes.

“More recently, housing credit and housing prices have shown signs of stabilising. CoreLogic data to June reported a subtle monthly rise in housing values across Sydney and Melbourne," he said.

The report indicated that Sydney continues to be the most expensive city for land in Australia with a median price of $435,000. The gap between Sydney and the second most expensive city, Melbourne, is decreasing. Richmond-Tweed is the most expensive regional market with a median price of $350,000. It attracts higher prices than four of the six capital cities.

Hobart, however, remains the least expensive capital city for land with a median price of $145,000 in the March 2019 quarter. While Hobart takes out pole position for the capital cities, South Australia dominates the top ten least expensive regional markets. The number one least expensive regional market is the northern region in South Australia followed by Eyre.

"With interest rates potentially heading even lower and housing demand via population growth remaining high, we could potentially start to see some upwards pressure on vacant land prices over the second half of 2019,” Mr Lawless said. 

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