New home buyers paying more for less: UDIA

Zoe FieldingMarch 23, 20150 min read

New home buyers are paying more for less with lot sizes falling and median prices rising around the country, a report from the Urban Development Institute of Australia (UDIA) has revealed.

The median size for a new lot nationally fell by 3.6% over 2014 while the average price for a new lot in Australia’s five largest capitals rose by 4.2%, according to the latest UDIA State of the Land Report.

The seventh annual edition of the report noted an ongoing trend of falling lot sizes over recent years. It put the declines down to limited land supply, the high cost of land and affordability constraints felt by new home buyers.

At 474 square metres, the median size of a new lot is now 11.4% smaller than in 2009.

Prices for land in the five biggest cities are up by 22.5% since 2009 with the median price for a new lot now at $246,300.

Nationally, new home buyers paid an average of $527 per square metre in 2014, up 9.5% from the previous year, and up 40% since 2009.

The research, conducted in partnership with Charter Keck Cramer and Research4 using data from the National Land Survey Program, also showed a marked increase in the number of new lots released in 2014 compared with the previous year.

Melbourne saw a 60% increase in lot releases, the largest rise of the capital cities, with 4791 more new lots offered in 2014 than in 2013.

The number of new lots released in South East Queensland rose by 55% compared with 2013.

The strong lift in supply in both Melbourne and South East Queensland constrained price rises in the areas, despite strong buyer demand, the report showed.

In Sydney, prices continued to rise despite a 29% increase in the number of new lots released. The UDIA noted that new supply had consistently been unable to keep up with in demand in the city.

As demand outstripped supply, lot prices in Sydney rose by 5% in 2014. Prices have risen by 15% since 2012.

Lot sizes in Sydney have also shrunk the most. The average lot in Sydney was 450 square metres in 2014, down by 11.6% compared with the year before when the average lot was 509 square metres.

In line with rising prices and falling lot sizes, land prices per square metre in Sydney increased by the largest margin of the capital cities. Price per square metre rose by 18.7% from $636 to $755.

New lot prices in Perth rose by 9.4% spurred by demand. The report noted population growth in Perth continued to be the strongest of the states despite having slowed as mining investment recedes.

Prices were flat in Adelaide where the market remains depressed. 

Zoe Fielding

I am a freelance journalist and editor with more than 15 years experience specialising in personal finance, property, financial services and financial technology. A skilled writer and researcher, I have extensive experience producing high quality content for corporate and media clients. I am used to working to tight deadlines and tailoring the pieces I produce to suit a variety of audiences and formats.
First Home Buyers
House And Land
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