Land cost escalates across Australian capital cities
Sophie Foster, News Corp Australia Network
September 16, 2016 12:30am
IF you think the cost of designer tapware, finishings, and furnishings are what’s driving up the cost of a new home, think again — it’s something much more down to earth.
Latest CoreLogic trend data shows prices will only escalate with capital city land costs hitting high gear in the past 12 months.
Not only was land in capital cities at around half the cost of the average home, with the median now 8.1 per cent higher than a year ago, cityslickers were paying through the teeth for it.
The price for the median urban block was a massive 65 per cent higher than regional areas — the largest gap between the two prices in 13 years.
“On a rate per square metre basis, capital city vacant land is now 231 per cent more expensive than land outside of the capital cities which is the largest differential on record,” CoreLogic found.
Land in the capital cities had also shrunk in size to a median of 450sq m — a low point for vacant land — compared to a luxurious 812sq m across the combined regional areas.
CoreLogic economist Cameron Kusher said the “divergence” between capital cities and regional markets was playing out in housing costs already.
“On a rate per square metre, housing costs have increased across each capital city over the past year. Again Sydney and Melbourne recorded the greatest increases over the period,” he said.
“A significant driver for the cost increases has been the price to purchase land. Therefore, it’s no wonder median house prices in Sydney are hovering around $900,000 when new vacant land (most of which is on the outskirts of the city) has a median price in excess of $422,000.”
He said increasing the amount of land available for development, lowering fees and charges for land, and more competition among developers “would likely reduce land costs”.
“Potentially, this would slow the escalation in housing costs, particularly in Sydney and Melbourne,” he said.
Land Costs across the Australian Capitals:
Sydney: $422,000, 486sq m (up 12.5 per cent in 12 months)
Melbourne: $255,000, 479sq m (up 13.9 per cent)
Brisbane: $229,000, 471sq m (up 2.6 per cent)
Adelaide: $205,000, 377sq m (up 1.5 per cent)
Perth: $284,500, 410sq m (up 7.4 per cent)
Hobart: $160,000, 806sq m (up 20.3 per cent)
As the prices rise in the capital cities, it is time to consider a Seachange.
Call Forster Agents Margaret Price Real Estate and check out the prices of land and houses on the coast