(Australian Associated Press)
Residential land prices have soared to new highs across capital cities, compounding Australia’s housing affordability problem.
The median lot price increased 8.5 per cent to $256,683 in the 12 months to June, according to the latest Housing Industry Association-CoreLogic Residential Land Report.
As a result, the cost of vacant land in Sydney jumped over $1,000 per square metre for the first time, HIA Senior Economist Shane Garrett said.
“The speed at which land price is increasing is a concern as it compounds the housing affordability problem,” Mr Garrett said.
Real progress on affordability would require improved financing of housing infrastructure, monitoring and timely reporting on land release, and speeding up the zoning and sub-division process, he added.
Residential land prices rose the most in Melbourne, up 19.6 per cent over the year.
Price growth remained strong at 9.8 per cent in Sydney, while Adelaide saw an eight per cent increase and Perth had five per cent gains.
Brisbane prices were nearly flat, up just 0.1 per cent over the 12 months, while Hobart was the only capital city to experience a reduction in median land price, recording a 15.8 per cent decline.
“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,” CoreLogic commercial research analyst Eliza Owen said.
Home sales across the capital cities have continued to rise in recent weeks, but the auction market has softened, with the clearance rate drifting below 70 per cent.
New and prospective infrastructure developments such as the east coast’s inland freight rail and a second Sydney airport may open up employment opportunities outside of the metropolitan regions, which may stimulate housing demand in more affordable areas, Ms Owen said.