Residential land in Adelaide saw the third highest growth in price in the first three months of 2017.
According to the latest joint report by the Housing Industry Association (HIA) and CoreLogic, residential land prices across Australia reached new highs during the March quarter, driven by turnover in regional markets.
Year on year, residential land price growth was strongest in Melbourne (+16.6%), then Sydney (+11.1%), Adelaide (+7.4%), Brisbane (+3.6%) and Perth (+2.7%). Hobart was the only capital city in the report to see a decrease in land prices over this period (-8%).
Other findings from the report include a rise in residential land market turnover in South Australia (SA) rising by 16.1% during the quarter and volume of land sales increasing by 15.7% in Adelaide. The volume of residential land sales across regional SA were estimated to increase by 17.1%.
HIA-CoreLogic estimates a total of 1,028 lots for the quarter in Adelaide, which is 12.1% higher year on year. The price of residential land in Adelaide increased by 0.9% in the quarter to $217,000 per lot.
Residential land prices in SA are substantially cheaper than in Adelaide. Based on median house prices, the report noted that the most expensive was Outer Adelaide ($141,00 per lot), followed by South-East SA ($97,500). Northern SA ($77,500 per lot) was the cheapest land market in SA and Australia.
HIA Senior Economist Shane Garrett described land prices in the nation as “unrelenting.”
“Even though the latest HIA-CoreLogic Residential Land Report shows a small increase in the supply of residential land on the market during the quarter, the price of land is now 9.3 per cent higher than a year ago,” he said. “The substantial increase in the price of residential land continues to be the single biggest factor behind recent deteriorations in housing affordability.
Garrett believes that the solution to the housing affordability challenge lies in adequate and appropriately priced land being made available across Australia’s cities and regional towns. “This is a key imperative for governments at all levels,” he concluded.