The number of Australians buying land has increased significantly as buyers benefit from affordability. House prices were falling across the country but particularly in Sydney and Melbourne. Cuts in the RBA’s cash rate and relaxing APRA’s funding limits have made servicing a loan simpler. Tax cuts and other economic initiatives have helped to restore confidence to the wider housing market and helped boost land sales.
According to the latest data from the Housing Industry Association, land sales rose 46 percent across the nation in the six months to the end of the quarter of September 2019. The increased demand for residential land has not yet had any material effect on the prices of land. The capital cities saw a quarterly increase in the land median value of 0.7 percent and the regions increased by 0.6 percent. During the period the 10,563 lots sold were much higher than the quarter of March 2019, when sales were the lowest on record.
The return has yet to have an impact on land prices, although Eliza Owen of CoreLogic says it may not belong until demand drives higher prices. “Demand for land and dwellings has rebounded strongly since June last year, which is also reflected in a 6.7% rebound in national dwelling values over the past seven months,” she says.
The rebound in the housing & property investment market follows the outcome of the Federal Election, a relaxation in lending standards, tax cuts, and interest rate reductions.