The number of purchases for residential land has dropped, a report has revealed.
The number of people who took out and bought residential land in the three months leading up to December 2010 fell.
Earlier this week,
the Housing Industry Association (HIA) released its Residential Land Report, revealing that in the last quarter of 2010, the volume of sales fell by 40.4 per cent compared with the same period in 2009.
Findings showed that this is the lowest number of transactions made on residential land for ten years.
At the same time, the value of land grew, with prices increasing by 4.1 per cent in the December 2010 quarter, taking the average price to $194,161.
Matthew King, HIA economist, said: "The escalation in land values highlights an ongoing deterioration in new home affordability driven by constraints on supply."
As long as the prices keep going up, it is unlikely that enough people will be able to find good home loan deals to stop the number of sales from declining further.
Mr King stated that the expensive value of land causes new housing projects to "sag" due to the weight of the "excessive cost".
Research director for RPdata.com Tim Lawless also noted the impact of land transactions for the housing market in the country.
He said: "A 40 per cent reduction in land sales points to ongoing weakness in the housing construction sector, which is already very soft."
Mr Lawless noted the growing gap between supply and demand for land, stating that there is an imbalance between the two at the moment.
Indeed, the latest report from QBE recently revealed there has been a decline in first-time buyers on the housing market recently.
It showed that of those who are looking to purchase property soon, only 15 per cent of people re stepping on the property ladder for the first time, according to ABC news.
Meanwhile, due to the contraction to the lending market there are only 123 mortgage products currently available to home buyers, down by two-thirds since the collapse of the property market.
Roy Morgan found in its monthly survey that 71.7% of CBA customers were satisfied in March, marking the group's lowest results since 2009.
