Perth is no longer the most affordable capital city in Australia with the average land price increasing 34 per cent in 2024, a recent industry report shows.
Perth is no longer the most affordable capital city in Australia with the average land price increasing 34 per cent in 2024, a recent industry report shows.
The Urban Development Institute of Australia today released its State of the Land report, finding Adelaide has surpassed Perth as the most affordable capital, with a median lot price of $307,000 compared to $329,000 in the west coast.
In the report, UDIA said the median lot size in the Greater Perth area remained at 375 square metres, representing a lift in the land price to $877/sqm.
UDIA WA chief executive Tanya Steinbeck said the increase in Perth’s land prices could be attributed to the housing supply shortage that continues to impact the residential market in Western Australia.
“This is simple demand vs supply theory in practice,” she said.
“We have seen demand for housing in WA continue to escalate as our population increases, economic conditions remain strong and unemployment is low.
“Rental vacancy rates also remain extremely tight and rental costs continue to remain at record highs.
“In response to the ongoing strength in demand for new housing, greenfield developers have put their foot on the accelerator, ramping up supply where possible.”
Parcel Property general manager Jeremy Cordina said Perth’s land market remained constrained despite strong demand, as delivery timelines struggled to keep pace.
“While there is plenty of land supply in the pipeline, approvals and construction capacity remain key bottlenecks, causing land releases to be snapped up within minutes,” he said in the report.
“Infrastructure investment is proving a game-changer. The new Yanchep and Ellenbrook train lines have significantly bolstered buyer demand in those corridors, and Byford is poised to benefit once its station opens.
“However, WA lags behind the east coast in capitalising on transit-oriented development.
“Looking ahead, Hilbert and Mundijong will be two of the main volume land markets over the next decade, which has its concerns given Perth’s 50,000+ annual migration intake, and the number of lots available in these areas.”
The report found sales activity in Perth’s multi-unit sector plunged to near record lows in 2024, with 1,795 sales.
In Greater Perth, the median sale price of new units increased to an all-time high of $575,000, a 29 per cent increase on 2023.
Despite Adelaide overtaking Perth as the most affordable city in land prices, the Western Australian capital was top of the list for most affordable new apartment stock.
The UDIA report found Perth’s median price point for new apartments 16 per cent cheaper than the combined capital cities and 9 per cent under Adelaide’s median pricing.
But Ms Steinbeck said WA continued to fall short of the federal government’s National Housing Accord targets despite developers ramping up activity in the past couple of years.
“The UDIA State of the Land 2025 forecast dwelling production for Greater Perth indicates very significant year-on-year shortfalls against the National Housing Accord target over the coming five years,” she said.
“It is critical that private industry is supported in getting on with the important job of delivering more land to the market, where it is needed.
“While the new land market has been able to ramp up in the last couple of years, it is becoming more complex to bring large swathes of developable land to the market across the Perth metro region.”
