There's been a significant fall in land supply over recent months, which as you would probably expect, is starting to have an impact on the price of real estate in Princes Hill. The HIA-CoreLogic RP Data Residential Land Report for the December quarter shows sales of vacant land were down 14 per cent over the course of last year, with capital cities the worst affected.
Tim Lawless, research director at CoreLogic RP Data, explained that across the combined capitals, sales were down 19 per cent compared to the final quarter of 2014. This points towards a significant slowdown across the market.
"The ongoing challenge for state governments is to ensure a sufficient release of residential land that is located in desirable locations and well connected by transport infrastructure to major working centres and necessary amenities like schools, health care and retail precincts," Mr Lawless noted.
Results of the December quarter Residential Property Price Index showed that across the eight capitals, values increased 8.7 per cent between 2014 and 2015. On a quarterly basis, the rise stood at 0.2 per cent
It's likely that real estate in Parkville will have been affected by this trend, as the Australian Bureau of Statistics also revealed that Melbourne's property prices have continued to climb. Compared to a year earlier, prices increased 9.6 per cent across the Victorian capital, or 1.6 per cent from the previous quarter.
Mr Lawless emphasised that if the recent fall in land transactions was a result of decreasing demand, this would have manifested itself through a decline in selling prices. However, this hasn't been the case and in fact quite the opposite situation is true, leading experts to decide it's a supply issue that needs to be rectified.