A summary of vacant land prices across Australia
Monday, 7 December 2015 3:47 PM
Where we choose to build a new home is crucially important - as the old saying goes, 'location, location, location'.
If you are trying to build your property investment portfolio, or even just looking for second or third property, you'll find prices can vary significantly from state to state. The following provides a summary of land prices around Australia.
History of Australian land value
According to data published by Macro Business, land value compared to the nation's GDP has slowly risen since the beginning of the 20th century, but drastically increased in just the past few decades. Indeed, when comparing land value to GDP per capita, the statistics show that the price of local property has more than doubled since the 1980s.
Though this has likely moved many first-time buyers from purchasing land, those who are interested in designing a home after they have already entered the market will be well-placed to turn a profit.
When comparing land value to GDP per capita, the statistics show that the price of local property has more than doubled since the 1980s.
Trends in land value
Based on insight from CoreLogic RP Data, the upward trend has continued through 2015 in urban Australia (up 6 per cent from 2014-15), though taken a downward turn in regional areas (down 3.4 per cent). In terms of average median sales prices, when combining statistics from all of the country's biggest cities, the median price for vacant land sits at around $258,543. Meanwhile, regional property sales have yielded a median value of around $156,600.
This means regional land prices are now 39 per cent lower than urban areas, which is the biggest difference between the groups since 1990.
There has also been a reduction in land size, shrinking over time. Since the end of the 20th century, median lot size has trended downwards in our capital cities, but risen in regional areas (8.3 per cent in the past 12 months). In a modern capital city, the median size of property is around 452 square metres, and 810 square metres in regional Australia. As a result, new acreage home designs may be more valuable in the coming years.
In conjunction, sales are falling as prices rise, and the gap between supply and demand is slowly widening.
"As with all aspects of this housing cycle, there are wide divergences in land market conditions around the country," said Harley Dale, Chief Economist of the Housing Industry Association.
"There is insufficient shovel-ready land in some markets and this is placing undue upward pressure on residential land values. Construction of detached houses looks to be peaking for the cycle, but there is unrealised demand out there because of that lack of readily available and affordable land"
Across the states
However, as with all property markets, there are huge variances in land value, depending on where you look. Prices have risen in each capital across Australia with the exception of Brisbane, which CoreLogic RP Data reports dipped 2.7 per cent to a median price of $216,500. The average rate per square metre also dropped slightly in Brisbane as well as Hobart, but rose everywhere else. The below table highlights these details and more.
Data from September 21, 2015.