Home Lot Sales Grow in Affordable Cities

Surging land prices in major cities like Sydney, are driving homebuyers toward cheaper regional and smaller capital cities. New data highlights how affordability challenges are reshaping the demand for new housing, impacting market trends and prices.


Land prices continue their upward trajectory, with Sydney recording a record-high median of $2,011 per square metre in the September 2024 quarter, a 9.3% annual increase. This spike contributed to a 25% drop in lot sales in Greater Sydney, which dwindled to just $621 from $833 year-on-year. Conversely, Adelaide, with a comparatively modest median land price of $691 per square metre, saw a 33% surge in lot sales over the same period, jumping from $1,108 to $1,470.


Regional areas such as Geelong in Victoria and the Illawarra in NSW witnessed even stronger growth, with lot sales climbing over 50% from the previous year. Despite a national drop in quarterly sales by 20.3% and an 18.4% year-on-year decline, annual data signals recovery; land sales rose 7.1% to 44,741 compared to the prior 12-month period


However, the rising land costs continue to stretch affordability. The national median land price reached $366,510 in September 2024, up 7.6% yearly. In capital cities, this figure was higher at $408,160, reflecting an annual 9.2% increase. While sales are recovering, higher costs, constrained land supply and expensive infrastructure requirements hinder home ownership prospects for many Australians.


Experts suggest unlocking more residential land and improving infrastructure availability could alleviate price pressures. Reforming planning processes and embracing denser housing in established areas could not only cut costs but reduce inequality by providing proximity to jobs and services. Without such measures, affordability barriers are likely to persist, deepening challenges for aspiring homeowners and the housing industry alike.


Sources: Realestate.com.au, CoreLogic, Urban Development Institute of Australia, Realestate.com.au, Australian Financial Review