
The median price of residential land in Australia hit a record $366,510 in the September quarter 2024, rising at rates that outstrip both inflation and construction costs.
National land prices jumped 7.6 per cent over the past year, according to the latest HIA-CoreLogic Residential Land Report.
Capital cities led the increase with a 9.2 per cent rise to $408,160, while regional areas saw more modest growth of 2 per cent to $281,910.
HIA Economist Maurice Tapang said: “Land prices have risen three times faster than the rate of growth in the ABS Consumer Price Index (CPI) and five times faster than growth in the cost of home building materials as measured by the Producer Price Index (PPI) for the September quarter 2024.”
Perth and Brisbane recorded the strongest capital city growth, with land prices surging 38.6 per cent and 21.2 per cent respectively over 12 months.
Sydney’s median land price grew 7.2 per cent despite weaker building activity compared to other capitals.
Regional markets like the Illawarra and Geelong saw lot sales increase by over 50 per cent compared to the previous year, as buyers sought more affordable options outside capital cities.
CoreLogic Economist Kaytlin Ezzy said: “Affordability continues to be a major hurdle in bringing new housing stock online. The continued uptick in land prices, coupled with upward pressure on construction costs and the higher for longer interest rate environment, has moved new home ownership further out of reach for some Australians.”
New dwelling approvals remain 17.8 per cent below the decade average and almost 30 per cent below the annual target needed to meet government housing goals.
Mr Tapang said inadequate land supply for residential development threatens to derail the government’s target of building 1.2 million homes over five years.
Some builders are now offering discounts despite margin pressures, with the ABS reporting a 0.6 per cent monthly decline in new dwelling purchase prices in November.