- Median new land price in Perth is more than a third the price of Sydney
- Long term supply remains a prime concern of industry
- More needs to be done to address infill, and medium and high density
A new report has officially declared Perth as the most affordable capital city in Australia.
The Urban Development Institute of Australia’s (UDIA) State of the Land Report was launched at the UDIA National Congress in Perth on Wednesday, finding that the median new land price in Perth was chump change at $228,000, with median land price growing a modest 6% in 2022.
Perth usurps Adelaide for best value
The latest figures mean Perth now has the most affordable residential blocks in Australia.
Meanwhile, on the east coast, Melburnians are forking out $382,125 for new land, with Sydney-siders exsanguinated $716,381.
UDIA WA CEO Tanya Steinbeck said: “New land sales in Perth have slowed to more sustainable levels and there is a strong pipeline of demand moving forward,” Steinbeck said.
“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.”
Catch 2022 as apartments needed but tough to build and invest in
Housing supply remains a prime concern for the property industry, with multiple challenges lying ahead.
The report reiterated that supply must keep up with demand. It was noted that: “… new dwelling growth fundamentally is not keeping up with population growth.” Rental availability has also been in the spotlight, similarly seeing supply challenges and record-low vacancy rates.
The report also highlighted challenges across the medium and high density sectors.
While the land market was fairly stable during Covid, multi-residential developments, particularly apartment projects, have taken a hit: annual completions of multi-unit dwellings were down 20% across Perth over the year to December 2022 and completions are expected to continue to decline over the next three years given construction is down 54%.
Steinbeck said “The lack of action in the multi-unit sector is concerning. In the context of the drive for more infill development and the delivery of greater housing choice, we need to ensure we keep all options on the table to support the delivery of multi-unit projects in both the medium and high-density categories.”
Apartments are an important part of the solution to addressing housing needs, but they cannot come fast enough.
“These are the types of projects that take the longest to deliver, so when the well runs dry in terms of sufficient supply of apartments in the pipeline – the pain from lack of housing choice will be felt for an extended period,” said Steinbeck.
“UDIA WA has recommended that the McGowan Government make the Off-the-Plan Duty Rebate Scheme permanent and extend it to apartment projects under construction,” Steinbeck said. “We also want to see the Foreign Buyers Surcharge removed.”
“For apartment projects in particular, developers rely heavily on presales in order to make a project viable,” Steinbeck said. “These measures will assist in building much needed consumer confidence and attracting investors in this sector of the market.”
“In addition our recommendations in relation to the built form sector, UDIA WA supports the leadership role of planning in bringing relevant government agencies together to deliver on the strategic vision behind the Perth and Peel @3.5m planning documents that aim to accommodate sustainable population growth and shape Perth’s future as a more vibrant and connected city,” Ms Steinbeck said.
