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Increased demand for residential land in Sydney is set to continue, while select south-east Queensland markets will also gain momentum in 2015, says a leading industry analyst.
According to BIS Shrapnel's The Outlook for Residential Land 2014-2019 report series, the Sydney residential land market is going from strength to strength, with sales rates in the outer Sydney growth centres close to early-2000 levels.
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Despite this rise, the extended downturn in the Sydney land market in the past decade has meant that a significant shortfall in new houses remains, the report said.
Meanwhile, after a period of weakness, the Brisbane, Gold Coast and Sunshine Coast markets are seeing a recovery, according to the research.
"Low interest rates have improved affordability and also driven an increase in the median house price over 2013/2014," it said.
Report author Angie Zigomanis said the strength in the Sydney market is expected to continue.
Almost a decade of weakness has meant that not only were there few completed lots to satisfy demand, but new sub-divisions are quickly emerging to meet the pent-up demand, he said.
Mr Zigomanis said it would take at least a couple of years for this demand to be satisfied.
"The signs are also emerging in metropolitan Brisbane, where lot production fell below 5,000 lots in 2012/2013 – the lowest level in at least 20 years," he said.
"However, the emerging upturn in demand has seen around 6,000 new residential lots completed in 2013/2014."
BIS Shrapnel said that by contrast, land production in Melbourne and Adelaide is likely to show only moderate growth, while the market will track backwards in Perth.
[Related: Sydney and Melbourne property prices finally set to fall]
