THE national housing land delivery report card is out, and Sydney has again nabbed the top spot for the most expensive housing blocks out of Australia's five biggest capitals.
The Urban Development Institute of Australia (UDIA) State of the Land Report, undertaken in partnership with Charter Keck Cramer and Research4 and released earlier this month, also reveals that demand in Sydney is outstripping supply by more than 50 per cent.
UDIA NSW Stephen Albin said that when measured against other capitals, "the Sydney housing situation is clearly in crisis".
"Sydney is struggling under the weight of a rapidly growing population combined with what was essentially a trickle of new housing for more than a decade," Mr Albin said.
"While housing start figures are improving, that chronic undersupply still exists."
Mr Albin said in response to the demand for housing, the development industry has had to innovate – evidenced by lot sizes also shrinking at record levels.
"The situation in Sydney is so pressing that we have seen a 12 per cent drop in housing block sizes over the past year in new residential areas," he said.
"And over the past year, the price for a block per square metre has jumped a whopping 18.7 per cent or $119."
Mr Albin said the industry has responded to demand with the assistance of the State Government's Housing Diversity package in growth centres, allowing the development of homes on smaller blocks – an initiative that should be extended.
The report shows over the past year:
- The greatest change in median block size over 2014 occurred in Sydney, which fell by 59 square metres from 509 square metres to 450 square metres, an 11.6 per cent drop;
- The largest change in land price was in Sydney, where the price of land increased by $119 per square metre, from $636 to $755 per square metre, an increase of 18.7 per cent over the year;
- Sydney experienced a 29 per cent hike in blocks released, South East Queensland had a 55 per cent hike;
- Block prices in Sydney rose by 5 per cent in 2014, and have risen by 15 per cent since 2012;
- The median lot price for Sydney hit a record high in 2014 of $339,750, with 97 per cent of stock sold valued above $251,000; and
- NSW remains the most expensive State or Territory in Australia to do business with taxes and levies making up to 30 per cent of the cost of a new home.
Mr Albin said the NSW Government needs to take a number of immediate measures to support more housing supply in Sydney, on top of releasing more land.
As a priority, the State Government needs to introduce planning reforms that remove unnecessary duplications in approvals processes and limit costly delays," he said.
He also said there needs to be a greater State Government focus on local infrastructure delivery to better connect new housing areas, and the land tax system needs to be reviewed.