The price of vacant residential land has fallen throughout Australia as the slowdown in new housing development has driven a softening in demand for outer-suburban land, the latest report shows.

Releasing the latest edition of their Residential Land Report, Housing Industry Association (HIA) and CoreLogic said the median price of vacant residential lots throughout Australian capital cities came in at $313,682 in the June quarter – up 1.5 percent compared with the March quarter but down compared with the June quarter of 2018 by 2.0 percent.

Leading the decline is Adelaide, where prices slid 4.3 percent in the June quarter and 6.4 percent year-on-year.

In Sydney, meanwhile, prices have fallen 5.6 percent over the past year despite remaining unchanged during the quarter.

Elsewhere, prices fell 0.4 percent during the quarter and 2.3 percent for the year in Brisbane and contracted by 0.3 percent year-on-year in Melbourne despite being up 1.2 percent for the quarter.

On a square meter basis, prices have fallen over the past year by 12.6 percent in Sydney, 12.0 percent in Adelaide, 7.4 percent in Melbourne and 4.6 percent in Brisbane.

By contrast, median lot values have jumped 15 percent and 11.3 percent in Hobart and Perth to record gains of 22 percent and 12.7 percent over the year to June in those cities respectively.

On a square meter basis, prices increased over the year to June by 20.3 percent in Hobart and 5.1 percent in Perth.

The latest data provides further evidence of a softening in the market for new detached housing.

Whilst the high-rise segment of the market has received the most attention, seasonally adjusted building approval data from the ABS indicates that the number of single detached homes approved for construction throughout Australia fell by 19.5 percent over the year to August and now sits at its lowest level in more than six years.

Whilst the market has stabilised in terms of price movements, the nature of the development cycle means that means that there is a time-lag between any bottoming out in house prices and a stabilisation in the volume of new residential development activity.

With land purchases often preceding new development, meanwhile, the apparent improvement in land demand over the latest quarter provides some encouragement regarding forward prospects for new home construction in the detached house segment of the market.

CoreLogic Head of Research Tim Lawless said the fall in land prices will help to ease housing affordability pressures.

HIA Economist Angela Lillicrap, however, cautioned about long-term pressures on land supply and called on governments to better monitor the forward pipeline of new land.

Over the past decade, Lillicrap says the square meter cost of purchasing new residential land has doubled in Sydney and more than doubled in Melbourne – a phenomenon she says has contributed to housing affordability challenges in these markets.

According to Lillicrap, long term monitoring of the land supply pipeline is necessary as the process of making land ‘shovel ready’ can last up to a decade.

This means any land shortages which arise cannot be easily met with greater supply over the short term.

“If the Australian dream of home ownership is to remain achievable, governments must work with industry to ensure that there is an appropriate supply of land. Improving the monitoring and reporting of the land supply pipeline will enable government and industry to make well informed decisions,” Lillicrap said.