Property Market Information: Residential land supply bounces back

By the resi financial blog team, 20 March 2015

Property Market Information: Residential land supply bounces back

Land supply is one of the most critical things to the property market. Whether you're buying a home or looking to build from scratch, finding approved space can mean the difference between affordable - and unaffordable. It looks like things are pointing up for the residential sector, though, with findings from the Urban Development Institute of Australia (UDIA) showing a surging supply in residential lots.

UDIA's State of the Land Report for 2015 shed some promising light on the property sector. While industry commentators have been crying out for local governments to take action to speed up - and free up - land for construction, the study found that there were 31 per cent more sales of undeveloped residential land - or greenfield lots - over 2014 when compared to 2013. 

This could be encouraging news given the most Australian Bureau of Statistics housing finance data for January. According to their figures, lending to both owner occupiers and first home buyers took a hit over the month. Lending numbers for construction dropped, but the value of lending to investors increased by 1.6 per cent. Peter Jones, Chief Economist of Master Builders Australia, said this is a sound reminder of how affordability impacts some buyers' ability to enter the housing market. 

"The housing shortfall is driving continued deterioration in housing affordability and Master Builders is calling for urgent reforms to ensure the intergenerational home ownership gap does not widen," he said in a March 11 release. 

However, the UDIA report - created in partnership with Charter Keck Cramer and Research4 - could give a glimmer of hope for the future. It outlined that Melbourne and South East Queensland are areas where residential land supply was strong. In fact, supply in these regions jumped by an impressive 61 per cent and 55 per cent respectively. 

UDIA National President Cameron Shephard said this could offer some sweet relief to buyers, particularly first time purchasers. However, he also pointed out that the figures show a marked undersupply of homes across the board - something governments can not put on the back burner. 

"What's really needed is for governments to take action to remove the underlying structural barriers to new housing supply," he said. 

While the property market can fluctuate, you want to be financially sound when buying a home. Have a talk with a resi loan specialist to figure out some home loan choices to suit your circumstances. 

Categories: Home Loans