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<div>The Housing Industry Association (HIA) released its Land Report for the December 2015 quarter, which showed that land prices continued to soar through 2015. </div>
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<div>The median lot price in Australia ripped +5.2 percent higher in the three months to December alone to $234,600. </div>
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<div>Over the last half decade median lot values have increased by about +22 percent, while lot sizes have also been shrinking, meaning that land prices per square metre have been increasing sharply. </div>
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<div><a href="/images/2016/04/21/HIA.jpg" target="_blank">Click to enlarge</a></div>
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<img src="/images/2016/04/21/HIA.jpg" alt=""><br><div> </div>
<div>This has not been regional Australia phenomenon through this cycle, with price rises driven overwhelmingly by the capital cities (although Adelaide's lot prices actually decreased in the year to September 2015). </div>
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<div>The same dynamic was in evidence this quarter, with capital city land prices screaming another +6.6 percent higher in just three months, while the number of transactions tightened again by a further -2.3 percent. </div>
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<div>That said, there are two "regional" locations which have experienced solid population and employment growth, and now have elevated and rising land prices, being the Sunshine Coast ($272,000) and the Gold Coast ($230,500). </div>
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<div>The coastal areas of south-eastern Queensland are enjoying the lower dollar and increasing tourism, particularly from China as far as I can tell.  </div>
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<div>As you can see in the chart above, it's clear that supply isn't keeping pace with demand, with the number of lot sales actually declining by -1.6 percent in the December quarter. </div>
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<div>Transaction levels have been fading for nearly two years now despite rampant demand.</div>
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<div>Indeed vacant residential land sales crashed lower in Sydney (-22.3 percent) and Brisbane (-20.1 percent) on supply restrictions in the quarter, although there were increased sales volumes in some other capital cities. </div>
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<div>Through the course of 2015 vacant land sales dived by 14 percent, and by a staggering 19 percent in the capital cities, where demand is actually higher. </div>
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<div>The HIA noted that the dynamic of falling sales and rapidly rising prices points to supply bottlenecks.</div>
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<p><span><em>PETE WARGENT is the co-founder of <a href="https://allenwargent.com/" target="_blank" rel="nofollow">AllenWargent</a> property buyers (London, Sydney) and a best-selling author and <a href="https://petewargent.blogspot.com/" target="_blank" rel="nofollow">blogger</a>.</em><br></span></p>
<p><em>His latest book is <a href="https://www.bigskypublishing.com.au/Books/General-Interest/Four-Green-Houses--and-a-Red-Hotel/1015/productview.aspx" target="_blank" rel="nofollow">Four Green Houses and a Red Hotel</a>.</em></p>
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