Across Australia block sizes are shrinking and land prices are rising, according to the latest data from the Urban Development Institute of Australia’s 2016 State of the Land Report.
In Sydney, the median price of a new land lot rose $100,975, or an incredible 29.7%, to $440,725 in 2015.
Looking across the country’s five largest capital cities, the average median cost of a new lot of land rose 1.4% over the year to $250,658 (an increase of 14.8% since 2010).
While prices are on the up, the average size of a new land lot has shrunk to 453sqm, a 4.3% contraction over 2015, and a 12.2% decrease since 2010.
So what’s the reason behind the shrinking block sizes? According to the UDI report, rising government and council charges are forcing land prices higher, which forces developers to offer smaller lots. Coupled with the general community acceptance of smaller blocks and there’s your equation!
The rise in prices comes despite a record number of new lots being released in 2015, with 55,656 new lots released, up 9.9% from 2014 (up 43.6% from five years ago).
With the level of uncertainty about future regulation, potential changes to negative gearing and capital gains tax on the table, this situation is unlikely to change without intervention at all levels of government.
To find your next block of land contact Naked Real Estate today.