This month we turn to vacant land and the house and land market, a sector telling a very consistent story nationally: demand is holding up, supply is not.
In South Australia, demand remains strong but the supply problem persists, and it is not the one most assume. The delays sit with basic infrastructure, with water, sewer and services holding up new greenfield sites rather than the planning system. On approvals, South Australia is now the fastest jurisdiction in the country. Consistent demand met with inconsistent supply continues to underpin the prices being paid for land, which are still increasing.
The proposed restriction of negative gearing away from established housing is likely to reinforce that, directing investors toward new stock and lifting demand for house-and-land packages. The unintended consequence may fall on the group the policy was designed to assist, with first homebuyers now competing with investors for the same product. Several new stage releases within existing estates are due next quarter and will be the first genuine test of the new rules, possibly coinciding with a further rate rise.
As affordability tightens, we are already seeing a preference for smaller, cheaper lots as buyers work to keep the total package within reach.
That affordability theme repeats around the country. In south-east Queensland the land market has noticeably cooled since May, driven less by the federal budget than by simple affordability. With three rate rises behind us and more threatened, median land prices across the region now exceed $500,000 and average build costs sit above that again, pushing new house and land beyond $1 million and out of reach of many first homebuyers relying on grants. The market has nonetheless been resilient, supported by severe supply bottlenecks, strong population growth and Olympic Games infrastructure spending.
Sydney’s new land supply remains confined to the north-west and south-west growth corridors, where developers have staged releases to keep supply in step with demand. Price growth has been good, although rising build costs and softening prices for completed housing are now flowing through to land values.
Melbourne is more varied. The outer north is stable with slight gains over the year and a healthy pipeline titling in early to mid 2027, though rebates have climbed to as much as 20 per cent, roughly double the usual level. The west continues to attract first homebuyers and investors, with the 1,005-hectare Melton East community set to deliver close to 12,000 homes. The south-east has slowed, with estates partnering with volume builders on spec homes, buyers shifting toward townhouses and smaller lots, and some builders handing land back as margins compress.
Western Australia is a mixed bag. Perth faces chronic undersupply and strong demand for any lot in a sought-after established location, with buyers holding equity and keen to build. Regionally, Broome and Albany are strong while Esperance and Geraldton are flat, and higher yields in centres such as Broome are driving a noticeable shift in investor behaviour.