According to the latest HIA-CoreLogic Residential Land Report, the median price of land sold nationally jumped 7.6 per cent year-on-year to reach $366,510 in the September quarter of 2024.
Capital cities are leading the charge with a 9.2 per cent increase, pushing the median price to $408,160.
Perth and Brisbane have emerged as the standout performers, with extraordinary growth rates of 38.6 per cent and 21.2 per cent respectively.
HIA Economist Maurice Tapang highlighted the unprecedented nature of these increases.
“Land prices have risen three times faster than the rate of growth in the ABS Consumer Price Index and five times faster than growth in the cost of home building materials,” Mr Tapang said.
The regional markets are providing some relief, with a more modest increase of 2.0 per cent, bringing the median price to $281,910.
Areas like the Illawarra and Geelong are seeing increased activity, with lot sales up more than 50 per cent compared to the previous year.
Sydney continues to face unique challenges, with land prices rising 7.2 per cent despite slower building activity. “The cost of delivering shovel-ready land to market here remains high,” Mr Tapang said.
CoreLogic Economist Kaytlin Ezzy pointed to broader market challenges affecting new housing development.
“Affordability continues to be a major hurdle in bringing new housing stock online,” Ms Ezzy said.
“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.
The situation poses a significant threat to the government’s housing targets, with current approval rates falling well below required levels.
New dwelling approvals are currently 17.8 per cent below the decade average and almost 30 per cent below the annual target needed to meet government objectives.
“Ongoing inadequate supply of land for residential development, both greenfield and infill, continues to act as a key constraint on housing supply and risks torpedoing the Government’s ambition to build 1.2 million homes over the next five years,” Mr Tapang said.
“Increased urgency and commitment from governments to release more land for residential development and adequately service it with essential infrastructure will alleviate rising land prices and help more Australians into home ownership.”
