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Australia’s median residential land price hit a record $369,530 by 2024, as sales plunged to a two-decade low due to a shortage of development-ready land.
The latest Housing Industry Association-Cotality Residential Land Report revealed that the median price of residential land in Australia hit a new record high of $369,530 in the December 2024 quarter, marking an increase of 2.6 per cent on the previous quarter.
HIA senior economist, Tom Devitt, said that the annual growth for land prices over 2024 was far greater than the increases recorded in 2022 and 2023.
“Lot prices have rapidly re-accelerated, finishing 2024, 8 per cent higher than a year earlier, compared to more modest increases of 4.4 per cent and 3.3 per cent in 2022 and 2023, respectively,” Devitt said.
However, the report also showed that only 42,590 lots were sold during 2024, which was down 5.7 per cent on the previous year’s 45,150, marking the weakest calendar for residential lot sales since 2000.
Devitt said that the simultaneous occurrence of record low sales volumes and sudden re-acceleration of land prices was an indication that shovel-ready land had grown scarce due to rising construction costs and planning system delays.
“This suggests that dwelling price pressures will also persist, especially as demand for housing increases across the country,” he said.
With increasingly favourable conditions prompting more Australians to enter the property market, Devitt warned that the sudden influx could worsen housing affordability if demand is unmet.
“Elevated population growth, low unemployment rates, and recovering real incomes have been bringing aspiring home owners back to the market in a number of states, and recent interest rate cuts will get more of them over the line,” Devitt said.
“This increased demand will require a strong pipeline of shovel-ready land to mitigate the pressures on affordability going forward,” he added.
Cotality economist, Kaytlin Ezzy, said that nationwide shortages of affordable shovel-ready land have posed a significant barrier to new housing construction efforts.
“The lack of affordable shovel-ready land continues to be a significant barrier preventing the delivery of new housing stock to the market, with many prospective barriers instead shifting demand to the established market,” she said.
While Ezzy acknowledged that construction costs have also hindered the delivery of new housing, she said that data from the Reserve Bank of Australia (RBA) showed that land availability has had a proportionally greater impact on new housing shortfalls.
“The RBA reported a decline in new dwelling purchase inflation in both the December 2024 (-0.2 ppt) and March 2025 (-0.4 ppt) quarters, despite a continued, albeit more moderate, rise in construction costs,” Ezzy said.
“This suggests that some of the previous hurdles in delivering new detached housing, including material and labour shortages, have abated, while land availability and affordability remains a significant blocker,” she explained.
Devitt said that the NSW government’s recent $304 million investment into the development of “critical infrastructure” could help to free up more residential land.
“One of the key barriers to increasing housing supply is essential infrastructure such as utilities and transport which is often the very last thing standing in the way of commencing construction on an actual home,” Devitt said.
While fast-tracking critical infrastructures could help to improve residential land supply, Devitt said that the effects would still depend on the NSW government’s execution of the initiative.
“Fast-tracking this infrastructure is fantastic value-for-money for the government, but care must be taken not to limit the funding of this infrastructure to only specific buyer groups or housing types,” Devitt said.
“Conditions on infrastructure funding, like a form of inclusionary zoning, can be well-intentioned but ultimately counterproductive,” he concluded.
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