Land sales on the increase

Land sales on the increase

Posted on Thursday, January 19 2012 at 1:30 PM

Land sales have increased by 1.3 per cent in the September quarter, according to the Housing Industry Association (HIA)-RP Data Residential Land Report. It’s the third quarter where the volume of land sales has increased.

“It’s a long climb back, but at least we have now seen three consecutive quarters in which land sales volumes have increased, although there’s no avoiding the fact that overall levels remain low,” HIA senior economist Andrew Harvey says.

“Land sales are an early leading indicator, so an upturn in trajectory is essential to the prospect for an eventual recovery in new home building activity.”

Land sales are still 16.8 per cent lower than in the September 2010 quarter. RP Data’s senior research analyst, Cameron Kusher, agrees that the result is encouraging but says the market still has a long way to go.

“It’s also important to remember that the improvement commenced at a time when many expected that official interest rates would climb higher,” Kusher says.

“With successive 25 basis point cuts to interest rates in November and again in December 2011, we would expect that a steady improvement in sales activity which commenced in the December 2010 quarter is likely to continue and perhaps gain further pace.”

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