Residential land prices lifted faster than the cost of most other goods and services in the economy, new research shows.
The latest HIA-CoreLogic Residential Land Report shows that the median price of land sold nationally increased by 7.6 per cent in the September quarter 2024, compared with the previous year.
The median price of land sold nationally was a record high $366,510.
According to HIA Economist Maurice Tapang, land prices have risen by more than double 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) over the same period.
“Australia’s capital cities continue to drive this strong growth, with their median price increasing by 9.2 per cent compared to the previous year to $408,160”, Tapang said.
“Prices have increased the fastest in areas where either home building activity is beginning to pick up or where the cost of providing the infrastructure for new lots is high.”
Brisbane and Perth recorded the strongest growth in their median land prices, up in the last twelve months by 21.2 per cent and 38.6 per cent, respectively.
“There are signs that despite the rise in land prices, particularly in the capital cities, buyers are looking at better opportunities to purchase land, whether through exploring growing regional locations or buying smaller lots”, Tapang suggested.
“Australia’s regions continue to provide better land purchasing opportunities compared to the capital cities, with the median price growing in the year by a slower 2.0 per cent to $281,910”, he said, adding that in areas such as the Illawarra and Geelong, where the median land price is lower than their respective capital cities, lot sales have increased by over 50 per cent compared to the previous year.
“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 homeownership”, Tapang concluded.