Jobs and the New Land Market
The performance of the new land market is linked to the number of people employed.
It is well understood that job growth impacts the performance of the property market. The new land market representing close to 50% of total housing demand is no exception to this insight.
Based on research undertaken by Research4, the Perth new land market has sold on average 38 lots for every 100 additional persons employed across WA. The SEQ new land market has sold on average 36 lots for every additional 100 persons employed across QLD.
When it comes to Sydney, the ratio has been 17 for every 100 persons. Melbourne has been selling on average 26 lots for every 100 persons.
Housing demand driven by non commercial factors
The interesting take out is that Melbourne and Sydney have lower ratios. There will be a number of reasons for this, however, one reason will be the fact that these two markets rely less on employment to drive housing demand.
Sydney and Melbourne have a more diversified household base. People go to these places because there are more personal and non commercial reasons to be there. Family, education, friends are place anchors. People stay for reasons other than simple employment.
Forecasting new land sales based on persons employed
You can develop a forecast for the new land market based on forecast employment rates. This forecast will change over time, however based on the Federal governments official 5 year forecast, a land forecast can be ascertained.
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