I have shown previously that the escalation of Australian housing values since the late-1990s has been caused, primarily, by an increase in land values rather than construction costs (see below chart).
Now RP Data has released statistics showing the extraordinary (literally) escalation of land costs across Australia’s capital cities:
Importantly, the median sale price for land has increased substantially despite the size of the blocks being sold shrinking across all major markets over the past decade, meaning that your average buyer of a house and land package is paying more for less:
Accordingly, the price per square metre of land has increased as follows over the past decade:
- Sydney: up 73%;
- Melbourne: up 242%;
- Brisbane: up 252%;
- Perth: up 283%;
- Adelaide: up 250%;
- Hobart: up 406%.
If ever there was a time to relax artificial restraints on land supply and introduce a broad-based land tax, it is now.
Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
