Sydney land sales hit 11-year high

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The research shows that the volume of residential land sales jumped 18.2 per cent in the second quarter of2013 to reach 17,170, the highest quarterly volume since the first three months of 2010.

“The recovery in residential land sales is impressive,” said HIA Chief Economist, Harley Dale, but noted it was “from a very low base”.

“There is a close (lagged) relationship between RP Data-HIA land sales and the number of detached house starts,” continued Dale. “Land sales volumes highlight the prospect of further growth in detached house starts in 2013/14 following a modest lift of 3.7 per cent in 2012/13. That would be a very positive outcome for both the new home sector and the wider economy.”

RP Data’s research director Tim Lawless argues that the growth is in line with broader housing market improvements: “The housing market has been back in growth since mid-2012 with both the rate of capital gains and transaction volumes gathering some momentum during 2013. It should come as no surprise that the Sydney housing market, which remains well undersupplied relative to the rate of population growth and is recording the highest rate of capital gain currently, is one of the primary drivers behind the lift in national vacant land sales.”

Indeed, Lawless adds, Sydney land sales surged 33 per cent year-on-year in the second quarter of 2013, hitting an 11-year high.