Following the release of the latest edition of the HIA-CoreLogic Residential Land Report, the HIA has once again highlighted the critical role that land planning and supply plays in housing availability and costs.
“Adelaide, Brisbane and Perth are seeing residential land values grow at a rapid rate, while Sydney and Melbourne’s values remain relatively stable,” stated HIA Senior Economist Matt King.
The recently released HIA-CoreLogic Residential Land Report provides updated information on sales activity in 51 housing markets across Australia, including the six state capital cities.
“The median price of the typical residential lot sold in the March quarter 2024 was $343,480, which is 3.3 per cent higher compared to the same period in the previous year.
“Perth, Brisbane, and Adelaide are currently sitting in the fast lane of growth in residential land prices with double-digit annual increases. Hobart grew by 2.4 per cent over the year, Sydney remained flat while prices in fact fell in Melbourne compared to the previous year,” Mr King said.
“There are evidently two speeds of price growth in residential land market values, with the smaller more affordable capital cities seeing sharper increases in prices,” he added.
“Land prices in the capital cities overall are 4.4 per cent higher compared to the previous year. The regions on the other hand recorded a 0.9 per cent decline over the same period. Land prices in the regions have slowed with the post-pandemic return of households to the capital cities offsetting the relative affordability advantage of many regional markets.”
“Nationally, the number of lots sold in the March quarter 2024 fell by 9.1 per cent compared to the previous quarter, reflecting the dampening effect of sustained high interest rate environment and the inability of policymakers to bring sufficient land for residential development to market in a timely way,” he said.
“The decline in the number of lots sold in this quarter has been broad-based, as land sales fell across all capital cities and regional markets. Lot sales remain well below the pre-pandemic average, suggesting an ongoing lack of urgency from state and local governments to bring enough land to market for residential development.”
“Furthermore, it reflects a damaging fixation on taxes and charges levied throughout the new home building supply chain, Mr King continued.
“Excessive taxation and charges on land under residential development is a key reason for the high price of land.”
“Land supply has been inadequate for the best part of a decade, and inefficient and inequitable taxes, such as stamp duty, have only compounded the problem and significantly inflated the cost of land.”
“Before a brick is laid, the median lot prices across many capital city and regional markets are already simply too expensive, pricing vast numbers of owner-occupiers out of the new home building market. It is incumbent upon governments to adequately supply land for residential development, both Greenfield and infill, to support Australia’s underlying housing demand.”
“An appropriate demand/supply balance should be complimented by the removal of punitive taxes, such as stamp duty, that are pushing new homes out of the reach of many Australian families,” said Mr King.