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{{propApi.successMessage}} {{region}} Change locationLand prices a roadblock to 1.2 million homes target
Land prices a roadblock to 1.2 million homes target
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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 ongoing surge in national land prices is the key obstacle to Australia building 1.2 million new homes over five years,” added Mr Reardon.
“In recent years, home buyers have flocked to states like Western Australia, South Australia and Queensland where abundant and affordable shovel-ready land has been available. These strong population dynamics have driven the strongest improvements in home building activity.
“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.
“Brisbane lot prices have overtaken those in Melbourne for the first time in almost a decade, increasing by 9.2 per cent in the last year.
“Lot prices in Perth have increased by 29.8 per cent in the last year and almost 50 per cent in the last 18 months. Prices in Perth are now only a whisker behind those in Melbourne.
“Adelaide still maintains a significant affordability advantage over the larger capitals, but with the price of land per square metre rising 27.6 per cent in the last year, it has pushed households into choosing smaller blocks of land. Yet the price of a typical Adelaide lot still jumped by 8.1 per cent in 2024/25.
“These recent developments illustrate the importance of policymakers facilitating healthy pipelines of shovel ready land across their states.
“A failure to provide sufficient residential land, and associated infrastructure, will limit improvement in home building volumes.
“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,” concluded Mr Reardon.
Cotality Economist Kaytlin Ezzy said, “The start of the rate loosening cycle has been a boon to land sales, with activity improving, albeit from record lows in the June 2025 quarter. With a further cut in August, and potentially more cuts to come, we’d expect to see a similar lift in volumes the coming quarters.
“However, land affordability and lack of shovel ready land continue to be major hurdles for the delivery of new housing stock. While the annual change in construction cost has normalised below pre-COVID levels, the cumulative 32.8 per cent increase seen since the start of the pandemic continues to drag on feasibility.
“While up from the lows seen in mid-2023, monthly house approvals in August came in 6.8 per cent below the decade average while house commencements for the June 2025 quarter remained 8.6 per cent below the decade average.
“Without improvements in the availability of shovel ready lots, land supply will likely continue to be a major factor hampering the delivery of new housing stock to market.”
Download our HIA-Cotality Residential Land Report
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