Land prices continue to rise

The Central Coast is the fourth most expensive regional location in Australia in which to buy land, latest data reveals.

The median price of land on the Coast is $1,187 per sq m, with the only regions where land is more expensive being the Gold Coast in Queensland, the Illawarra in NSW and the Mornington Peninsula in Victoria.

Housing Industry Association economist Maurice Tapang said the median price of land sold nationally increased by 7.6 per cent in the year to January 2025, compared to the previous year – much faster than the rise in the cost of other goods and services in the economy.

The HIA-CoreLogic Residential Land Report provides updated information on sales activity in 52 housing markets across Australia, including the six state capital cities.

“Land prices have risen by more than double the rate of growth in the ABS Consumer Price Index (CPI) and five times faster than growth in the cost of home building materials, as measured by the Producer Price Index (PPI) over the same period,” Tapang said.

“Australia’s capital cities continue to drive this strong growth, with their median price increasing by 9.2 per cent compared to the previous year, to $408,160.

“Australia’s regions continue to provide better land purchasing opportunities compared to the capital cities, with the median price growing in the year by a slower two per cent, to $281,910.

“Ongoing inadequate supply of land for residential development, both greenfield and infill, continues to act as a key constraint on housing supply and risks torpedoing the government’s ambition to build 1.2 million homes over the next five years.

“Increased urgency and commitment from governments to release more land for residential development and adequately service it with essential infrastructure will alleviate rising land prices and help more Australians into homeownership.”

CoreLogic economist Kaytlin Ezzy said affordability continued to be a major hurdle in bringing new housing stock online.

“The continued uptick in land prices, coupled with upward pressure on construction costs and the higher for longer interest rate environment, has moved new home ownership further out of reach for some Australians,” she said.

“With the HomeBuilder backlog largely worked through, some builders are coming up against a shortfall in new work.

“The ABS noted in November monthly CPI release a -0.6 per cent monthly decline in the new dwelling purchase prices, with some builders offering discounts and promotions in order to secure hesitant business, despite ongoing margin pressures.”