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As reported in the HIA-Cotality Residential Land Report, the first quarter of 2025 reported the weakest sales of land in 25 years.
Just 8,250 residential lots were sold around the country throughout the March quarter.
This was attributed to skyrocketing prices, with the median price of land reaching $372,620. This is 39.2 per cent higher than it was pre-pandemic.
Driving the high prices is scarce availability, with HIA senior economist Tom Devitt noting that Sydney and Melbourne especially have “incredibly low levels”.
Even the smaller capitals are contributing to these trends with the affordability gap closing.
HIA said that this problem is only made worse due to elevated construction costs.
“A planning approval for a new home build costs almost $20,000 and takes over seven months to obtain, highlighting the importance of tools like private certification in fast-tracking approvals and bringing land and housing to market faster and more affordably,” said Devitt.
According to Cotality, the June quarter saw construction costs up 32 per cent from March 2020.
While there has been an easing of costs since the record highs during the pandemic, figures are still inflated.
Experts expect land costs to continue to soar as land continues to be a rare commodity.
“With further rate cuts expected to stoke housing demand, the ongoing shortage of shovel ready land, coupled with ever increasing construction costs and low approvals levels, will continue to constrain the delivery of new housing, sending both land and established dwelling prices higher,” said Cotality economist Kaytlin Ezzy.
[Related: Nearly half of Australian suburbs at peak property value]
