Land values are soaring in Australia’s smaller capital cities as demand continues to grow. The latest HIA-CoreLogic Residential Land Report says values are growing rapidly in Adelaide, Brisbane and Perth.

HIA Senior Economist Matt King says the median price of a typical residential lot sold in the March quarter of 2024 was $343,480 – 3.3% higher than at the same time last year. “Perth, Brisbane, and Adelaide are currently sitting in the fast lane of growth in residential land prices with double-digit annual increases,” King says. “Hobart grew by 2.4% over the year, Sydney remained flat while prices in fact fell in Melbourne compared to the previous year. There are evidently two speeds of price growth in residential land market values, with the smaller more affordable capital cities seeing sharper increases in prices.”

Land values in the regions dropped by 0.9% during the same period. The number of lots sold is dropping and is down by 9.1% in the March quarter compared to the previous quarter at the end of 2023.

King says this in part is a result of the inability of policymakers to bring sufficient land for residential development to market in a timely way. “Excessive taxation and charges on land under residential development is a key reason for the high price of land. Land supply has been inadequate for the best part of a decade, and inefficient and inequitable taxes, such as stamp duty, have only compounded the problem and significantly inflated the cost of land.”