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{{propApi.successMessage}} {{region}} Change locationLand sales plummet as prices soar
Land sales plummet as prices soar
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The HIA-Cotality Residential Land Report provides updated information on sales activity in 52 housing markets across Australia, including the six state capital cities.
“The dramatic decline in lot sales across Australia coincided with the median price of residential land reaching a new high of $372,620 in the first quarter of the year, putting prices 39.2 per cent above their equivalent value in 2019,” added Mr Devitt.
“From already weak levels, this deterioration in sales volumes, coinciding with record high lot prices, points to a worsening shortage of shovel ready land across the country.
“Lot sales in Sydney and Melbourne have remained at incredibly low levels, consistent with them being the two least affordable capital city land markets in the nation. Lot prices in these capitals have, subsequently, been relatively more contained in recent years at their elevated levels.
“As the smaller markets have driven the national improvement in house building activity, the re-acceleration of their land prices indicates shortages of shovel ready land are worsening in these capitals.
“Land prices in the smaller capitals are closing the gap with the largest capitals, jeopardising the affordability advantage of the smaller capitals.
“Market confidence has been strengthening on the back of strong population growth, tight labour markets and recovering household incomes. Now with two interest rate cuts in the back pocket, and the expectation of more to come, this should bring even more people back to the market.
“Without a healthy pipeline of shovel ready land across Australia’s capitals and regions – with all the associated infrastructure – this return of demand for new housing will be diverted into the established housing market, driving up prices and worsening the affordability crisis.
“A crucial part of ensuring enough shovel ready land to market – both greenfield and infill – is a planning approvals system that industry can navigate in an efficient and affordable manner.
“HIA recently released a paper explaining how a planning approval for a new home build costs almost $20,000 and takes over seven months to obtain, highlighting the importance of tools like private certification in fast-tracking approvals and bringing land and housing to market faster and more affordably,” concluded Mr Devitt.
Cotality Economist Kaytlin Ezzy said, “Another barrier to increasing housing supply is further increase in construction costs. Adding to the impressive 37.4 per cent increase in land prices seen since the start of COVID, new home builders are also contending with elevated construction costs, with the June quarter Cordel construction cost index, up 32.0 per cent since March 2020.
“Although growth in construction costs has eased significantly from COVID highs, the most recent results saw a mild uptick in the quarterly trend, from 0.4 per cent in the March quarter, to a 0.5 per cent increase over the three months to June.
“This upwards inflection was also seen in the new dwelling purchases component of the CPI, with the subcategory up by 0.4 per cent over the June quarter, following falls in both the December 2024 (-0.2 per cent) and March 2025 (-0.4 per cent) quarters amid a series of builder discounts and promotions.
“With further rate cuts expected to stoke housing demand, the ongoing shortage of shovel ready land, coupled with ever increasing construction costs and low approvals levels, will continue to constrain the delivery of new housing, sending both land and established dwelling prices higher,” concluded Economist Kaytlin Ezzy.
Download our latest HIA-Cotality Residential Land Report
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