Land Prices Surging
Demand for vacant land is driving prices even higher, with Southeast Queensland values surpassing Melbourne for the first time.
The latest Oliver Hume quarterly report shows that Southeast Queensland median land prices surged in the first three months of the year, to above $1,000 per m² for the first time.
The report analyses thousands of land sales across key markets in Melbourne, Southeast Queensland and Adelaide.
It shows that Southeast Queensland’s lot price rose by 11% to $437,900 in the March 2025 quarter – which equates to $1,043/m².
Logan was the top region in Queensland for vacant land sales. Ipswich lot prices are up by 11%, Moreton Bay, 10% and Redlands 5%.
The gross median lot price in Melbourne rose to $408,000 in the quarter, which equates to $1,118 per m² and is just $3,000 higher than the December quarter.
In Adelaide sales volumes fell “heavily” for the second consecutive quarter, but values still rose to a new high of $319,995, which equates to $667 per m².
Property Dominates National Wealth
The value of Australia’s residential housing hit $11.3 trillion at the end of April to be now worth almost three times as much as Australian Superannuation and four times as much of Australia’s listed stocks.
According to CoreLogic more than half (55.3%) of Australia’s household wealth is tied up in housing.
There were 525,313 home sales in the 12 months to May 2025, which is 2.7% higher year on year. About $508.6 billion worth of property changed hands in the past 12 months.
CoreLogic data shows it takes on average four days longer to sell than it took a year ago, but property values still increased by 3.2% over the same period. Regional markets are still outperforming capital city markets, up by 5.3% and 2.6% respectively.
And rents are also rising, up 3.6% nationally since last year.
The highest growth in dwelling values in the past 12 months according to CoreLogic is Regional Western Australia which is up by 13.2% followed closely by Regional South Australia which is up by 12.9%.
Approvals Up, Completions Down
Building approvals may be up but the number of homes actually making it through to completion is at decade low, according to the Housing Industry Association.
The HIA says the past two years have been Australia’s weakest in the past decade in terms of homes being actually built.
HIA Chief Economist, Tim Reardon, says skills shortages are persisting on the back of labour demands from other construction sectors and the wider economy.
“The shortage of skilled trades across Australia persists in every capital city and region,” he says. “Commencements will remain well below those necessary to achieve 1.2 million homes over five years.”
Building approvals rose by 20.8% in the first quarter of 2025 compared with 12 months earlier, with 48,620 new homes approved for construction.
Multi-unit approvals surged by 52.6% in the past year, from what Reardon describes as very low levels.
South Australia had the highest growth in building approvals of 49.4%, Western Australia, New South Wales and Victoria all increased by more than 20% while Queensland was up only 0.8% and Tasmania dropped by 12.9%.
Bank of Mum and Dad Open
The bank of mum and dad remains one of the key sources for young people buying property.
The latest Mortgage Choice Home Loan Report shows 22% of Gen Z buyers funded their deposit with a cash gift from their parents.
Mortgage Choice CEO Anthony Waldron says as property prices reach new highs, getting into the market has become harder.
“We found that more than a fifth of Gen Z respondents were funding their home loan deposit with a cash gift from family - making the bank of mum and dad one of the largest lenders in the country,” he says.
“Our brokers tell us that many first home buyers can’t afford to buy in Sydney without a cash gift, and those gifts range in value.”
About a quarter of respondents to the survey are using the government’s First Home Guarantee Scheme and nearly a third are using the First Home Super Saver scheme.
About two-thirds of respondents are buying in conjunction with someone else, whether that is family, partner or a friend.
