A significant deterioration in land sales volumes bodes badly for already weak new home building activity.
According to a residential land report released by the Housing Industry Association (HIA) and RP Data yesterday, land sale volumes slumped by close to 60 per cent in the September quarter 2008 compared with the same quarter a year prior.
With land sales the foremost leading indicator of residential building activity, according to HIA chief economist Harley Dale this result indicates that housing starts are going backwards, rather than forwards.
Mr Dale said exorbitant taxes and charges on land as well as red-tape were hindering land sales.
“More needs to be done to provide more serviced land at an affordable price,” he said.
According to the report land prices are highest in Sydney and Perth where affordability concerns are most pronounced.
A typical suburban block costs $259,500 in Sydney and $230,000 in Perth.
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