QMI: September 2023

"The Australian new residential land market continues to improve although conditions vary across the nation.

Buyer demand continues to improve in some markets although demand remains well below long-term average levels in other markets.

So far in the residential land cycle (gross) land prices have generally remained resilient, following a period of significant growth, and are currently tracking around record highs.

Land prices continue to increase in some markets - boosted, in part, by large and growing housing shortages.However, in those markets where demand remains below long run average levels, we are now beginning to see gross land prices stabilise.

This is occurring at the same time that incentives and rebates are being increasingly used.

Well-publicised residential construction industry challenges remain and builders and developers remain cautious.However, construction costs have continued to ease in recent months.The outlook for interest rates remains of key importance to future market conditions.

While most commentators agree we are approaching the end of the Reserve Bank of Australia’s (RBA) monetary policy tightening cycle, recent inflation and other economic data, amongst other issues, suggests that the RBA will maintain a hawkish stance.

Despite challenging conditions in the short-term, including especially the sharp increase in interest rates, the medium to long-term outlook for the new residential land and broader property markets remains robust.

Dwelling demand is forecast to remain high, underpinned by record population growth and immigration.New housing supply is forecast to remain constrained and below underlying requirements resulting in growing housing shortages."

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Julian Coppini

Chief Executive Officer - Project Marketing