Price surge outpaces previous years as infrastructure delays stall new housing supply
Australia’s median residential land price rose to a new high of $369,530 in the December 2024 quarter, climbing 2.6% nationally, according to the latest HIA-Cotality Residential Land Report. The annual increase reached 8%, up sharply from the more modest gains seen in 2022 and 2023.
The report, which tracks land sales across 52 housing markets including all six state capitals, also revealed a worrying trend for supply. Just 42,590 lots were sold last year — the lowest annual figure since 2000 and a 5.7% drop from 2023.
Housing Industry Association (HIA) senior economist Tom Devitt (pictured above left) said the contrast between falling sales and surging prices points to persistent land shortages.
“The fact that these record low sales volumes occurred at the same time that land prices re-accelerated from record highs, is indicative of shortages of shovel ready land, driven by the rising cost of providing infrastructure and delays in the planning system,” he said.
The rising cost of residential land has become a key driver of Australia’s worsening housing affordability crisis. With fewer lots available and growing demand from buyers, land price pressures are feeding directly into higher dwelling costs.
“Elevated population growth, low unemployment rates and recovering real incomes have been bringing more aspiring homeowners back to the market in a number of states, and recent interest rate cuts will get more of them over the line,” Devitt said.
However, without a stronger pipeline of land ready for development, affordability issues are expected to persist.
The federal government has signalled support for “enabling infrastructure” to help speed up land supply. Devitt welcomed the commitment but warned that targeting infrastructure funding too narrowly could backfire.
“One of the key barriers to increased 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,” he said. “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.”
Cotality economist Kaytlin Ezzy (pictured above right) echoed concerns about land availability, describing it as a major constraint on new housing delivery.
“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 buyers instead shifting demand to the established market,” she said.
Ezzy pointed to recent Reserve Bank data showing slight declines in new dwelling purchase prices in late 2024 and early 2025, despite ongoing cost pressures. Builders and developers have responded with more promotions and incentives, signalling some easing of earlier supply chain issues.
“This suggests that some of the previous hurdlers in delivering new detached housing, including material and labour shortages, have abated, while land availability and affordability remain a significant blocker,” she said.
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