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Strong land sales a good sign for building; Perth land prices up 11.8% in June quarter
Topic Started: 3 Nov 2014, 10:02 AM (773 Views)
Mike
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http://www.theaustralian.com.au/news/latest-news/strong-land-sales-a-good-sign-for-building/story-fn3dxity-1227099708582


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STRONG demand for residential land points to a healthy year ahead for housing construction.

A BOUNCE in sales in the June quarter had lifted the total number of sales for the 2013/14 financial year to 10 per cent above the 2012/13 level, according to the Housing Industry Association-RP Data Residential Land Report on Thursday.
The HIA's chief economist, Harley Dale, said growth in the regional areas was faster in the June quarter than in the capitals.
"Consistent with signals from other housing indicators, the geographical recovery in residential land sales is broadening," he said.
"That is an encouraging sign for detached and semi-detached dwelling construction in 2014/15."
In the June quarter, the median price of a block of residential land across the country rose 1.1 per cent to $205,330.
In the capitals, land prices were up 7.4 per cent from a year earlier, while outside the capitals the rise was 4.1 per cent.
RP Data's research director Tim Lawless said the June quarter bounce was "welcome news".
"A rise in land sales implies a rise in detached housing construction about six months down the track which in turn provides a substantial multiplier for the Australian economy: more jobs, more building materials, home furnishings, appliances and white good sales."
But, he said, it's yet to be seen whether the quarterly improvement can develop into a trend.
"Despite the June quarter lift, the previous three quarters were showing a slowdown in the number of sales while vacant land prices continued to rise, a trend which may point to ongoing supply shortages of well-located vacant land," Mr Lawless said.

MEDIAN PRICES AND ANNUAL CHANGES, WITH LOT SIZES

*Sydney: $289,000 (+2.5 per cent), 500 square metres
*Melbourne: $213,000 (1.4 per cent), 448 square metres
*Brisbane: $219,000 (9.5 per cent), 480 square metres
*Adelaide: $184,950 (9.2 per cent), 363 square metres
*Perth: $266,000 (11.8 per cent), 400 square metres
*Hobart: $126,000 (-2.3 per cent), 672 square metres

http://mike-globaleconomy.blogspot.com.au/
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Glenn Stevens
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There are not enough new houses being built to accommodate a rapidly growing population, and this is putting upward pressure on prices and rents. This leaves policy makers, such as myself, with the Catch-22 of having to balance the risks of warding off rising house prices with increasing interest rates, while at the same time trying not to discourage stronger residential construction.
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Perthite
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You suck at this.....

http://www.watoday.com.au/business/building-approvals-fall-across-australia-20141103-11g046.html

Only 11% darling.
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Veritas
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In fairness, approvals still growing in WA.

But we will join the negative club in the next quarter or two I expect.

In the meantime, more supply coming to market just as demand weakens.

And we know what that means for prices.
Property acquisition as a topic was almost a national obsession. You couldn't even call it speculation as the buyers all presumed the price of property could only go up. That’s why we use the word obsession. Ordinary people were buying properties for their young children who had not even left school assuming they would not be able to afford property of their own when they left college- Klaus Regling on Ireland. Sound familiar?

The evidence of nearly 40 cycles in house prices for 17 OECD economies since 1970 shows that real house prices typically give up about 70 per cent of their rise in the subsequent fall, and that these falls occur slowly.
Morgan Kelly:On the Likely Extent of Falls in Irish House Prices, 2007
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Mike
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Veritas
3 Nov 2014, 01:53 PM
In fairness, approvals still growing in WA.

But we will join the negative club in the next quarter or two I expect.

In the meantime, more supply coming to market just as demand weakens.

And we know what that means for prices.
http://reiwa.com.au/The-WA-Market/

Yes more land supply had lead to a 25% increase in land prices. Go do some research, we have more land for sale now then 12 months ago, yet prices increased by 25%. Not so simple, although you would like it to be.
http://mike-globaleconomy.blogspot.com.au/
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newjez
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Mike
3 Nov 2014, 03:35 PM
http://reiwa.com.au/The-WA-Market/

Yes more land supply had lead to a 25% increase in land prices. Go do some research, we have more land for sale now then 12 months ago, yet prices increased by 25%. Not so simple, although you would like it to be.
Just as well land isn't a volatile commodity then isn't it.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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skamy
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Veritas
3 Nov 2014, 01:53 PM
In fairness, approvals still growing in WA.

But we will join the negative club in the next quarter or two I expect.

In the meantime, more supply coming to market just as demand weakens.

And we know what that means for prices.
Show us some historical data showing what happens to prices when building approvals rise.

Definition of a doom and gloomer from 1993
The last camp is made up of the doom-and-gloomers. Their slogan is "it's the end of the world as we know it". Right now they are convinced that debt is the evil responsible for all our economic woes and must be eliminated at all cost. Many doom-and-gloomers believe that unprecedented debt levels mean that we are on the precipice of a worse crisis than the Great Depression. The doom-and-gloomers hang on the latest series of negative economic data.
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