Land costs are heading higher
The high cost of vacant land is helping to drive established house prices upward.
New figures from CoreLogic show the median price of vacant land for capital cities rose 8.1% for the year to June 2016. The median price for a vacant lot in one of Australia’s capitals now sits at $270,350, 65% higher than in regional areas.
“Based on the selling prices of vacant land and the size of the lots, the rate per square metre of vacant land as at June 2016 was recorded at $584 across the combined capital cities and $177 across the combined regional areas,” CoreLogic researcher Cameron Kusher said.
Kusher said the cost of vacant land in Sydney was significantly higher than in all other capitals. The median vacant lot price in Sydney is $422,000, while the median price in the next most expensive capital, Perth, was $284,500.
Kusher said the rising cost of vacant land was helping to drive median house prices skyward.
“It is no wonder median house prices in Sydney are hovering around $900,000 when new vacant land (most of which is on the outskirts of the city) has a median price in excess of $422,000,” he said.
He argued that an increase in developable land and decrease in fees and charges applied to land development, as well as greater competition between developers, could help slow the rise of housing costs.