Property prices face their fair share of ups and down – hardly surprising given how many external forces they’re subject to. One of them is the cost of land, which one recent study shows has been rising over recent months.
The December 2015 quarter HIA-CoreLogic RP Data Residential Land Report found that median lot prices increased 5.2 per cent from the previous three-month period. This has the potential to force up the price of real estate in St George, unless of course something is done to combat the issue.
As perhaps you might expect, the pressures of dwindling land supplies are most heavily felt in the nation’s cities. This has forced prices up at a time when many buyers, including first-timers, are already struggling to get their footing on the property ladder.
December quarter figures from the Residential Property Prices Index show that in Sydney, property values increased from a year earlier. On a quarterly basis, there was a slight 1.6 per cent decrease, revealed the Australian Bureau of Statistics.
Senior economist at the Housing Industry Association (HIA) Shane Garrett explained that action needs to be taken sooner rather than later to prevent the problem spiralling out of control.
“If the drop in land transactions was attributable to lower demand we would expect a commensurate fall in selling price,” commented Mr Garrett.
“In fact the opposite is true; land prices are rising in the context of lower sales, which suggests a supply shortage is at play.”
The challenge now is to make sure land supplies are available in areas where there’s most demand for property. This in turn will bring down the cost of real estate in St George and other parts of the country, helping people to realise their property ownership ambitions.