The 12 months to the end of June have seen a significant divergence in the performance of land prices between capital city and regional markets.
Figures from CoreLogic show in the year to June the national median price for a vacant lot of land fell 2.3% to $212,000.
In capital city markets, the median price for a lot of land was recorded at $270,350, up 8.1% in the 12 months to June.
In regional markets, the year to June saw the median price for a lot of land fall 1.9% to $164,250.
The difference in performance over the year to June means the median price for a lot of land is now 65% higher in capital city markets than compared to regional markets, which is the highest price differential since September 2003.
On a city by city basis, land prices are at their highest in Sydney.
At the end of June the median price for a lot of land sat at $422,000 in Sydney, having increased 12.5% over the previous 12 months.
The median price for a lot of land in Perth was $284,500 at the end of June after increasing 7.4% over the year, followed by Melbourne where the median price increased 13.9% to $255,000 in the year to June.
In Brisbane, the median price reached $229,000 at the end of June after increasing 2.6% over the year, while Adelaide’s median land price sits at $205,000, up 1.5%.
Despite seeing a nation-leading 20.3% increase in the year to June, Hobart is still home to the cheapest lots of land with a median price of just $160,000.
CoreLogic research analyst Cameron Kusher said it was no surprise that Sydney was home to the highest land prices, however he said the fact land prices have increased more than house prices in Sydney and Melbourne over the past year is notable.
Kusher also said an increase in land supply and as well as changes to the costs associated with development would likely help improve housing affordability.
“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.
“An increase in the amount of land available for development, as well as lower fees and charges applied to land development, and more competition amongst developers would likely reduce land costs. Potentially, this would slow the escalation in housing costs, particularly in Sydney and Melbourne.”