New data shows Sydney land prices are rising faster than houses, turning up the price pressure for first home buyers.
Domain Group has released data showing Sydney’s median residential land price increased by 19.7% over 2014, maintaining the city’s place as the most expensive of all the state capitals.
“Sydney’s annual land prices increased at the fastest rate in over a decade and recorded stronger growth than the booming house prices which increased by 14% over the same period,” Domain Group's senior economist Dr Andrew Wilson said.
The median land price was $390,000 in the December quarter, well ahead of Melbourne at $245,000 and Brisbane $237,950.
“With Sydney residential land prices now rising faster than booming house prices, the task for first home buyers is becoming increasingly difficult,” Wilson said.
“Despite recent changes to the NSW First Home Buyer’s Grant which provides a $15,000 subsidy for first home buyers purchasing a new property, the rate of growth of outer suburban land prices is continuing to push the great Australian dream out of the reach of entry-level buyers.
The First Home Buyers grant will reduce to $10,000 from January 2016, while predictions based on current trends show outer suburban median land prices will have increased by at least another $40,000.
“The first home buyer market share in Sydney is set to remain around the current near-record lows until chronic undersupply of residential development land in Sydney is effectively addressed,” Wilson said.
The most popular outer west suburbs for land sales over the six months ending December 2014 were Riverstone, Colebee, Pitt Town, Kellyville and Glenmore Park.
The most popular outer south west suburbs for land sales were Harrington Park, Campbelltown, Moorebank, Appin and Edmondson Park.
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