Australian residential land sales slumped in the third quarter, signaling a “rocky road” for a recovery in home building, the Housing Industry Association said.
Land sales across the country dropped by 18 percent in the three months to Sept. 30, after climbing for the prior three quarters, according to the HIA-RP Data Residential Land Report.
The data “highlights the uncertainty around whether the new home building sector can mount a recovery that is both sustainable and of the magnitude Australia’s population and economy require,” Harley Dale, chief economist at the industry group, said in an e-mailed statement.
Australia’s building industry has been contracting for 31 consecutive months and the number of construction jobs fell by 21,900 in the 12 months through November, even as the central bank cut interest rates by 1.75 percentage points since November 2011. Still, the pace of land sales is speeding up, climbing 15 percent from the record low of a year ago, the report showed.
The weighted median residential lot value across the country rose by 3.8 percent to A$197,807 ($208,449) during the quarter, according to the report. The median value rose 5.1 percent to A$225,795 in capital cities and 0.8 percent to A$155,214 in regional areas over the three months, according to the report.
“Low interest rates and a subtle improvement in consumer confidence, together with government incentives now more focused on new housing, are likely to be the driver behind a gradually improving market,” Tim Lawless, research director at Brisbane-based RP Data, said in the report.