New data released by RP Data blames the lack of residential land for putting the upwards pressure on house prices.
The median selling price for land in capital cities is currently $247,000 and the cost of land, per square metre, has grown eightfold since 1990, according to RP Data.
RP Data national research director Tim Lawless blames this lack of residential land and shrinking lot sizes in capital cities for causing our housing affordability problem, News Ltd reports
Land prices have become a key contributor to rising home prices — particularly in Sydney, Brisbane and Melbourne, he told News Ltd.
The data suggests the cost of materials and labour have changed very little, so it is the rising cost of vacant land that has pushed up housing costs.
“The combination of smaller land lot sizes and rising prices is likely to continue,” News Ltd quotes Lawless.
The latest data released by RP Data revealed that in the last 12 months alone, Sydney has experienced over 16% price growth and Melbourne prices have climbed over 11%.