The latest figures on residential land show that price growth may be losing some momentum, but affordability pressures remain firmly in place. The Housing Industry Association’s latest Residential Land Report recorded a relatively modest quarterly rise in the median land price, yet the longer-term movement remains much stronger. For prospective home builders, the figures highlight the continuing challenge of securing land at a price that makes a new home financially achievable, particularly when household incomes have not increased at anything close to the same rate.
According to the HIA report, the national median land price increased by 0.4% during the March quarter, reaching $403,570. While that quarterly movement appears subdued, the annual comparison paints a very different picture. Median prices were 8.7% higher than a year earlier. HIA Senior Economist Tom Devitt says that pace of growth is three times faster than wages, demonstrating why even a slowing quarterly growth rate does not necessarily translate into better affordability for buyers.
The Residential Land Report examines 52 major housing markets across Australia and provides an indication of both pricing conditions and the volume of land changing hands. Alongside the increase in prices, the report revealed that residential lot sales declined by 7.6% during the quarter. That combination is significant because weaker transaction volumes have not been accompanied by a substantial reduction in land values.
Devitt says high land prices occurring at the same time as declining sales are a sign that the country is running short of shovel-ready land. In other words, the problem is not simply whether land physically exists. What matters to the housing construction sector is whether suitably located sites have been planned, approved, serviced and made available so that building can commence within a practical timeframe.
Demand for housing also continues to place pressure on the available pipeline. Population growth remains strong, new households are continuing to be formed and the number of homes being constructed remains below what is required. These factors create an environment in which slower quarterly land price growth alone is unlikely to resolve affordability problems. If demand continues to exceed the supply of development-ready sites, competition for available lots can continue supporting elevated prices.
The national figures also conceal substantial differences between individual markets. Oliver Hume’s Q2 2026 Quarterly Market Insights report identifies significant variations in the underlying balance between land supply and demand across different parts of the country. That means buyers, developers and builders are dealing with markedly different conditions depending on where they operate, rather than experiencing one uniform national land market.
Melbourne recorded a median land value of $404,000 during the quarter, putting it close to the national median reported by the HIA. Southeast Queensland was considerably more expensive, with a median land value of $544,900. Adelaide, meanwhile, recorded a substantially lower median of $309,500. The spread between those figures illustrates why affordability needs to be considered at a local and regional level as well as through national statistics.
Those differences can influence the total cost of delivering a new home. Land represents a major component of the final purchase price for many newly constructed properties, so increases in lot values can place additional pressure on buyers before construction costs are taken into account. Even where builders are able to manage the cost of the dwelling itself, expensive land can push the combined house-and-land price beyond the financial capacity of some households.
The fall in lot sales also deserves attention because transaction volumes provide another perspective on market accessibility. A 7.6% quarterly decline does not automatically mean demand for housing has disappeared. When considered alongside strong population growth, household formation and limited housing construction, it can instead indicate that buyers are encountering constraints involving affordability or the availability of suitable sites.
For policymakers and the development industry, the figures reinforce the importance of increasing the pipeline of land that can actually accommodate new housing. Releasing land on paper is not necessarily sufficient if lengthy planning processes, infrastructure requirements or other development constraints prevent lots from reaching the market. The focus therefore extends beyond identifying potential development areas to ensuring sites can progress to construction.
For buyers, the latest numbers offer mixed signals. The 0.4% quarterly increase is substantially less dramatic than the 8.7% annual rise, suggesting that the immediate pace of escalation has moderated. However, with annual land price growth running at three times the rate of wages, the underlying affordability equation remains difficult.
Ultimately, the reports point to a market in which supply availability remains critical. Strong population growth and continued household formation are maintaining the need for additional homes, while Australia continues to build fewer dwellings than required. Unless the supply of shovel-ready residential land improves sufficiently to meet that demand, a slowdown in quarterly price growth may provide only limited relief for households hoping to build.
