Land prices up 53% in Dec quarter: UDIA WA
By Edited announcement
The average price of land in Perth increased by 53 per cent to an average of $246,000 in the December quarter of 2006, according to the Urban Development Institute of Australia, due to strong economic conditions and land supply shortages.
The full text of an announcement from UDIA is pasted below
The Urban Development Institute of Australia has released the latest land sales statistics for the December 2006 Quarter.
The Urban Development Index provides a true account of the land supply situation in Perth, as it is based on data collected from the major development companies representing the majority of available lots for purchase in Perth.
Overall, the average price of land increased by 53%, with the average price of lots sold during 2006 reaching $246,092 in the 12 month period.
In the December 2006 quarter 1,565 lots were recorded as sold, down 18% on the September 2006 quarter.
The relationship between the low volume of land on the market and price increases is undeniable, with an ongoing shortage of land forcing up prices as the market is unable to meet increased demand.
UDIA (WA) President Darren Cooper said that "the unprecedented rise in average prices during 2006 is obviously partly driven by strong economic conditions, but it is also in large part a direct reflection of the land supply shortages that are impacting on the property industry in Western Australia."
"Labour and skills shortages as well as sometimes lengthy delays in the planning and approvals systems have combined to make keeping up with strong demand increasingly difficult." Mr Cooper said.
"With the continuing resources boom, many people from interstate and overseas are being lured to WA. This has increased the pressure on the property industry to provide more land."
"Developers have found it difficult to produce lots at an increased rate and have not been able to navigate complex and overlapping approvals processes, and there is a feeling that government could be doing more to assist."
UDIA believes that, whilst recent measures undertaken by the Minister for Planning & Infrastructure have produced some improvements in specific cases, a whole of government approach to land supply and a more strategic review of the entire system is now urgently required.
"We must have a system in place so that state and local government agencies work together to ensure that there is a streamlined approach to property development in this state," Mr Cooper said. "We are now calling for a dedicated land development taskforce to be established reporting directly to the Premier and Cabinet. We believe that this is what's needed to achieve the co-ordination required."
The highest performing area in terms of the amount of lots sold for the December quarter was the City of Swan with 391 lots sold at an average price of $253,922.
The UDI shows that over the next 12 months there will be increased activity in outer areas such as Gosnells with 765 lots under construction and due for release in the next 12 months; Armadale 702; Rockingham 1231; and Wanneroo with 888.