Undersupply to keep prices up
Low land supply keeps prices higher
I was going through an article which discussed the State of the Land Report, released pretty recently by The Urban Development Institute of Australia (UDIA). An expansive yearly evaluation of land supply has thrown up some difficult truths. It says that there is an extreme shortage in development-ready supply of land all across Australia. This has brought about a big hike in house price, especially creating obstacles for the first time buyers. The report shows how a ‘Federal’ initiative is immediately required to decrease the gap between the land supply and demand. The UDIA feels that the housing supply and its cost-effectiveness is somehow not a priority with the government at the moment.
State of the Land Report recommends a plan to keep the rolling supply of land going, and also focuses on the need for Federal funding. It asks the Productivity commission to investigate the taxes imposed by developers and figure out easier means of financing homes. The Report also asks Local Councils to assess applications on merit and makes a point about updating the Commonwealth-owned land to find the exact status of supply for those lands.
The Report comes up with a startling statistic that land prices are continuously rising despite decreasing price of median sized lots. Sydney has made some progress in terms of lot production and is no more at the bottom. Melbourne is however a clear leader. Plans need to be approved more quickly, infrastructure needs to be provided faster, and funding has to be streamlined, according to the Report.