Residential land in Sydney is now worth more than $1,000/sqm after increasing by 9.8% in the 12 months to June 2017.
The latest edition of the HIA-CoreLogic Residential Land Report highlights the shifts in land values across the while of Australia, with Melbourne witnessing the largest hike, registering a 19.6% increase.
HIA Senior Economist Shane Garrett said: “The speed at which land price is increasing is a concern as it compounds the housing affordability problem.
“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.”
Consequently, the volume of land sold in Australia decreased by 9% during the same period, while numerous studies have also shown a drop in Australians buying houses.
Hobart bucked the trend in standout fashion, recording a massive 15.8% decrease in median land prices. Perth and Brisbane’s prices appear more stagnant, growing a modest 5% and 0.1% respectively.
Eliza Owen, CoreLogic’s Commercial Research Analyst, added: “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. 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.”