New Sydney land costs top $1,000 per square metre
Residential land costs in key markets have reached a new high, says HIA senior economist Shane Garrett.
Vacant land in Sydney is now over $1,000 per sqm.
“Today’s HIA-CoreLogic Residential Land Report indicates that the median lot price nationally increased to $256,683, an increase of 8.5 per cent on a year earlier," Garrett said.
“Across Australia, land turnover is down about 9 per cent on a year ago.
“The speed at which land price is increasing is a concern as it compounds the housing affordability problem.
The results are contained in the latest edition of the HIA-CoreLogic Residential Land Report.
Garrrett suggested land supply policy has to be central to making real and sustainable progress on housing affordability.
"This requires improved outcomes with respect to financing of housing infrastructure, monitoring and timely reporting on land release and speeding up zoning and subdivision process,” he said.
CoreLogic’s commercial research analyst Eliza Owen says record high lot prices over the past five quarters are likely to have contributed to worsening affordability and influenced the unprecedented level of high density residential development that is currently under construction.
“As the Australian economy shifts from residential to non-residential construction, demand for vacant residential land may shift in location and scope," Owen said.
"New and prospective infrastructure developments such as the inland freight rail and Badgerys Creek Airport will open up new employment and development opportunities further from the metropolitan regions which may stimulate demand for housing in areas with a more affordable price tag."
Over the year to June 2017, price pressures in the market for residential land were most intense in Melbourne where the median price increased by 19.6 per cent over the previous 12 months.
The pace of land price growth was also strong in Sydney (+9.8 per cent) and Adelaide (+8.0 per cent) over the same period.
Land price gains were more modest in Perth (+5.0 per cent) and Brisbane (+0.1 per cent) over the same period.
Hobart was the only capital city to experience a reduction in the median land price over the year to June 2017 (-15.8 per cent).
