The combination of rising sales volumes and a dwindling inventory of homes for sale saw house prices rise again in the latest data. Depending on which of the major house price indices we look at, seasonally-adjusted prices have only failed to rise in at most one month this year. And it now appears that the strength of house prices is beginning to be reflected in land values. The data are released with a considerable lag, but we learnt this month that land values rose by 7.5% q/q in Q1.Growing demand for new homes, many of which are being built with the rental market in mind, should ensure that, like the house price recovery, the land value recovery is sustained.
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