Land Sales in Australia stayed "stubbornly low" in the first quarter of 2012, the Housing Industry Association has revealed.

The HIA-RP Data Residential Land Report shows transactions climbed by 6.8 per cent in the three months to March this year, but remain low in a wider historical context - a sign that weakness in new home building will persist through the rest of the 2012.

 "The new home building sector continues to face highly challenging business conditions and the prolonged period of weak land sales doesn't provide any confidence that a recovery is on the near horizon. Meaningful reforms across all levels of government are urgently needed to address the persistent weakness in residential building," added Andrew Harvey.

According to RP Data's research director Tim Lawless, it is positive to see sales improving, although volumes remain well down on normal levels.

"We have seen transactions for vacant land rise over two successive quarters now, however this lift comes from a historically low base. To put the number of land sales over the March quarter into perspective, transactions are about half of what we saw over the September quarter of 2009. Considering mortgage rates have moved about 55 basis points lower since March it is possible we may see a continuation in this trend of improving buyer activity but we have a long way to go before land sales get back to what might be described as normal levels," said Mr Tim Lawless.

"One of the barriers that may be stifling demand for vacant land is the fact that land prices haven't seen any sort of correction like what was recorded across the established housing market. In fact, median land prices have risen by close to 1 per cent over the year nationally and by 3.5 per cent across the capital cities. Consumers are very budget conscious and the lower price points associated with established housing or unit developments may be pulling prospective buyers away from the new home and land market," said Mr Tim Lawless.