Perth land prices are outpacing those in every other Aussie capital, soaring more than $200 a day across the past financial year.
The price of a patch of dirt is surging more than $200 a day as a land rush in Australia’s most affordable capitals threatens to derail plans to fix the nation’s housing crisis.
Housing Institute of Australia chief economist Tim Reardon has warned a 6.8 per cent surge nationwide in the median price of a patch of dirt over the past financial year has tripled inflation figures in the consumer price index.
But the uptick is being driven by massive surges in some capitals, with a new residential land report showing Perth prices skyrocketing an astounding $235 a day (29.8 per cent) in a more than $86,000 growth spurt that took the median price to $375,000 in the timeline.
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It is now just $7500 short of the nation’s formerly second priciest capital, Melbourne.
Hobart housing estate costs are also surging, with a $150 a day hike dragging the Tasmanian capital’s typical block of land to a record $320,000 after a 20.8 per cent jump.
Brisbane is now the nation’s second most expensive land market, after a 9.2 per cent hike in the past year added $92 a day to the price of a patch of dirt and brought the typical lot price to $366,300.
Typical land prices around the nation have come close to doubling in almost every capital in the past decade.
Perth’s new housing estates have been in high demand, with realesate.com.au showing where they are located.
The stats also show Adelaide homeowners are maxing out their budgets, with a $60 a day (8.2 per cent) lift in the city’s median land price to $292,000 leaving it as the nation’s most affordable state capital. But block sizes have plunged, and the price of land per square metre in the South Australian capital jumped 27.6 per cent as shrinkflation hit its suburbs.
Melbourne and Sydney had the most modest increases, with the NSW capital rising $51 a day (2.8 per cent) to $689,500 and Victoria’s gaining $20 (2 per cent) to reach $382,500 in a growth trajectory that led to it being overtaken by Brisbane as the nation’s second priciest capital.
The price of land by the saure metre is rising even faster than most state capitals’ overall land prices as blocks shrink in size.
HIA chief economist Tim Reardon believes land price rises could soon block any chance of reaching Australia’s ambitious housing construction goals.. Picture: Leighton Smith.
“Strong population dynamics have driven the strongest improvements in home building activity,” Mr Reardon said.
“Unfortunately, it is also producing some of the fastest increases in lot prices in the nation.
“If this continues, the competitive advantage that these states hold with lower land prices attracting new residents, will be lost relatively quickly.”
Mr Reardon added that the government would not see 1.2 million homes built without further efforts to reduce land costs — something it might best achieve through reducing infrastructure costs for developers, by taking it on themselves, or amending taxation.
“A failure to provide sufficient residential land, and associated infrastructure, will limit improvement in home building volumes,” Mr Reardon said.
“The return of demand for new housing, especially as borrowing costs have fallen, will be increasingly diverted into the established housing market, driving up prices and worsening the affordability crisis.”
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