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Governments have been accused of “policy failure” over the lack of available residential land and its impact on prices and new building.
A residential land report by the Housing Industry Association and RP Data has highlighted “land price pressures”, with detached house starts forecast to peak in 2014.
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There was a decline of 4.7 per cent in residential land sales between the March 2013 and March 2014 quarters, according to the report.
Housing Industry Association chief economist Harley Dale said there is a close relationship between residential land sales and detached house starts.
“The upward trajectory for residential land prices since mid-last year is steeper than it should be,” he said.
“There is clearly a policy failure this cycle, as in many before it, to ensure a supply of shovel-ready land commensurate with the demand for new housing.”
RP Data research director Tim Lawless said this suggested housing construction would play a reduced role in Australia’s economic recovery.
“Policymakers were placing a great deal of importance on renewed levels of housing construction to act as a new pillar for economic expansion,” he said.
“The ongoing rise in land prices at a time when sales are falling is a worry, particularly in Sydney where the number of sales over the March quarter was about level with the previous year, but the median price of land has moved 5.6 per cent higher over the year.”
[Related: Housing scorecard finds big surge in NSW]
