AUSTRALIAN LAND PRICE UP FOR 2ND STRAIGHT QTR: SURVEY

The Australian dream of owning a block of land has became tougher after residential land prices rose for the second consecutive quarter, a survey found.

The Housing Industry Association (HIA)-RP Data residential land report released on Monday found the weighted median price of raw land rose by 1.1 per cent in the June quarter to A$174,490 (US$160,844.88), from the previous quarter.

It was the second quarterly rise after four quarterly falls.

HIA chief economist Harley Dale said the task now was to ensure land prices did not appreciate and diminish housing affordability.

"There is no chance of a new home building recovery gathering the momentum required in coming years if adequate and affordable land supply is not available," Dr Dale said in a statement.

"There are already concerns that this problem may develop again through 2010 and this remains the critical issue for policy makers to address."

Sydney was the dearest market, despite a 1.5 per cent fall in the June quarter to a median average price of $255,000, the report found.

Brisbane had the largest increase of the major capital cities, up 7.1 per cent in the quarter and up 12 per cent over the year.

Queensland's Sunshine Coast was the most expensive regional market with a median price of A$236,750, while the Mallee in Victoria was the cheapest with a median price of A$70,000.

Dr Dale said the volume of land sales across the nation was 1.3 per cent higher in June 2009, from a year ago, with a five per cent rise in regional Australia more than offsetting a 1.3 per cent fall in the six capital cities.

"While a modest outcome, it was nevertheless the first positive result since the end of 2007," he said.

RP Data national research director Tim Lawless said a growing population would lift housing demand and that there was a shortage of available land.

"This fact alone should spark policy makers to act sooner rather than later with regards to instigating a more proactive and strategic land release program," Mr Lawless said.

Treasury Secretary Dr Ken Henry said last week that Australia's population would grow by 60 per cent to 35 million by 2049.

Mr Lawless also said investors were likely to re-enter the residential property market, as first time buyers become discouraged by the phase-down in the first home owners grant and rising interest rates.

(AAP) bl

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