Capital city land price boom continues: Pete Wargent
Pete WargentOctober 24, 2018
EXPERT OBSERVER
Property transaction volumes have been crippled in recent months.
But one key dynamic has not changed.
The capital cities continue to create hundreds of thousands of the most favourable employment opportunities...and there still ain't any more well-located land.
Capital city vacant land prices increased by a massive 16 per cent to a record high of $336,124 over the year to June 2018, as supply fails dismally to keep pace with demand.
This was much faster than the 5 per cent increase for regional lot values.
Sydney may still have the highest land price at $477,250 at the end of the June quarter.
But Melbourne recorded faster growth, with the median land price per square metre exploding another 27 per cent higher higher over FY2018.
Sydney's median vacant land price per square metre is now $1,100, ahead of Melbourne at $885.
Price pressures are still strong in the residential land market, according to HIA.
They found that the price and number of vacant residential lots sold increased across the state capital cities in the June 2018 quarter.
The weighted median residential lot price for Australia's state capitals increased by 3.8% to $336,125 in the June 2018 quarter to be 15.5% higher over the year.
Melbourne saw the strongest price surge with vacant residential land in Melbourne jumping 26.5% over the year to the June 2018 quarter.
Tim Lawless CoreLogic' Research Director agreed with this sentiment stating upwards pressure on capital city land values will continue.
He found construction costs are also rising faster than inflation.
And accordingly, the future price of new detached housing will be "inevitably higher" according to CoreLogic analysis.
Pete Wargent
Pete Wargent is the co-founder of BuyersBuyers.com.au, offering affordable homebuying assistance to all Australians, and a best-selling author and blogger.
