Perth has surpassed Adelaide as the most affordable capital city in Australia for land prices for the first time in a decade, according to a development institute’s annual report.
Perth has surpassed Adelaide as the most affordable capital city in Australia for land prices for the first time in a decade, according to a development institute’s annual report.
The Urban Development Institute of Australia launched its State of the Land Report at its national congress in Perth today.
According to the report, the median lot price in Perth increased by 6 per cent to $228,000 in 2022.
“This reflected the lowest annual median lot price growth across the capital cities to help underpin Perth surpassing Adelaide for the first time to become the most affordable greenfield land market in the country,” the report said.
Adelaide recorded the biggest yearly price growth in a decade with its average median lot price growing by 25 per cent to $235,000, but the city was still the second most affordable in the country, UDIA said.
In comparison, the median land price in Sydney has skyrocketed to $716,381, a 31 per cent increase from 2022, according to UDIA's report.
UDIA Western Australian chief executive Tanya Steinbeck said new land sales in Perth had slowed to more sustainable levels and there was a strong pipeline of demand.
“We will, however, need to keep our eye on longer term supply issues and ensure there is a pipeline of housing to meet that ongoing demand,” she said.
“WA is certainly not on its own when it comes to housing supply constraints, that is why UDIA is working at a state and national level to address the challenges with delivering adequate housing to the market.”
Perth also has the smallest median lot size in the country at 375 square metres, a figure UDIA said had remained the same for seven years.
However, UDIA found annual completions of multi-unit dwellings in Perth were down 20 per cent in 2022, with completions expected to continue declining over the next three years.
Perth registered the lowest level of multi-unit completions in a decade at 2,033 units, according to UDIA.
The report said the need for diverse and affordable housing supply would only increase with migration starting to bounce back and Perth and Peel's population heading towards 3.5 million people by 2050.
"While WA was somewhat sheltered from the worst of the pandemic, some impacts have lingered, not least the critical skills shortages and land supply bottlenecks," the report said.
"Following the dramatic spike in housing demand caused by the state and federal home building stimulus packages introduced in mid-2020, and lot sales continuing to strengthen throughout 2021, sales equalised to pre-COVID levels during 2022.
"This has flowed through to a significant reduction in detached house commencements, and even more alarming reductions in infill dwelling commencements (particularly apartments). The rapid escalation of housing demand in WA, which followed five years of market decline, placed considerable strain on the entire industry and government regulators and we have been experiencing the flow on effects of this."
