Land demand spikes across Australia, latest figures show

The strongest growth occurred in Melbourne, with a rise of 26.5 per cent per square metre over the last year for the quarter.

However, Sydney’s residential land lots still have the highest price of all the capital cities with a median lot price of $$477,250.

As the price of residential lots has risen, the sales number over the June quarter compared to last year is down by 22 per cent, but prices for the last twelve months ending June were up 15.5 per cent for capital cities and 5.2 per cent for regional areas and will result in a tighter land market.

“Considering CoreLogic reported residential dwelling values were down almost 2 per cent over the year to June, the surge in vacant land prices highlights a shortage of developable land across Australia’s capital cities that is continuing to exert upwards pressure prices,” Mr Lawless said.

Mr Lawless added the increase of residential land is an issue for housing affordability.

“The price of vacant land in Sydney is now well over $1,100 per square meter and roughly 30 per cent higher than the second most expensive vacant land market, Melbourne, where the cost per square meter is $885,” he said.

“With land prices continuing to climb and construction costs rising at a faster pace than inflation, the overall outcome for new detached housing is inevitably higher price points and increasingly stretched levels of affordability.”

Geordan Murray, acting principal economist at the Housing Institute Association, agreed with Mr Lawless’ sentiments of land prices impacting housing affordability.

“Inadequate supply of affordable, shovel-ready residential land is one of the major impediments to housing affordability,” Mr Murray said.

“The strong price pressures that capital city land markets are still experiencing indicates that the process of delivering new land supply and the requisite infrastructure for new housing is still too costly.”