The Urban Development Institute of Australia (UDIA) has released its latest State of the Land Report, which revealed that continued strong immigration-fueled demand for residential lots in Sydney and Melbourne saw the Australian median lot price rise by 10% in 2016 to $287,000, despite the median lot size shrinking by 5%. Accordingly, the price of land per square metre surged by 13% to $602 in 2016.From The AFR:
A 508sq m Sydney lot – the median size in 2012 – would have cost $585,000 in 2016 compared with $295,000 four years ago…
In Western Sydney, Stockland is offering lots as small as 250sq m and three-bedroom house and land packages at around $640,000 while another ASX-listed developer, Cedar Woods, has introduced apartments to its Melbourne communities…
According to the report… almost 40,000 lots are needed on the eastern seaboard to bridge the gap between the land supplied over the past five years and housing needed to match population growth and planning targets…
Separately, The SMH reported that mass immigration is fueling acute land shortages in Melbourne, which is sending prices skyward:
Melbourne’s greenfields market is booming with a record 22,700 lots released in 2016 making up 40 per cent of the national market. Victoria also welcomed the lion’s share of new immigrants with 127,500 people moving to the state.
The number of lots released last year in Melbourne rose 14.5 per cent from the previous 2015 high. Turnover is so fast that Melbourne and Sydney have barely a month’s worth of stock available at one time.
UDIA Victorian chief executive Danni Addison said “Melbourne’s greenfield market continues to outperform other capital cities with a significant portion of the nation’s annual lot sales”.
“While the median lot price remains lower than the national median, Melbourne’s greenfield market is experiencing rapid price growth, which is concerning from a housing affordability perspective,” Ms Addison said…
Villawood managing director Rory Costelloe said… “Melbourne market is certainly on fire, fuelled by migration. For the immigrants from India, the Middle East and Sri Lanka, they want to live in detached houses, they don’t want to live in apartments in the inner city”…
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Yet more evidence that mass immigration is destroying Australian housing affordability.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
