Perth Trumps Sydney With The Most Expensive Square Metre Of Land In Australia

Now must be about the right time to buy your first home or get back into bricks. Finance is the cheapest in 60 years and the housing market looks like it is moving up, according to a raft of indicators.

However, much depends on where you buy.

Perth, primed with the proceeds of a mining boom, has just pushed aside Sydney, Australia’s biggest city, as the most expensive place to buy.

This is judged not by the headline price per house or land sale but by the cost of a square metre of land, a good measure when lot sizes keep shrinking and prices still expand.

The cost of a square metre is Perth is $563 compared to $549 in Sydney.

You would think that a place like Australia with a lot of land and comparatively few people would have enough land to meet any demand.

“Pressures around residential land supply being released in a timely fashion are the main force underlying the escalation of Perth prices,” says the latest Housing Industry Association-RP Data Residential Land Report.

Perth’s per metre prices rose by 7.7 per cent during the June quarter while Sydney inched up by just 0.5 per cent.

“The fact that Perth prices are over three times their levels of a decade ago reinforces this point,” the report says.

“In Sydney, land prices have risen by a relatively modest 27.4 per cent over the same period against the backdrop of a weak market through much of this time.

“The sharp rise in per square metre prices in Perth was driven by both higher median prices and a substantial fall in the median size of land.”

Hobart is still the cheapest capital city on a per square metre basis. Prices in Tasmania’s capital were $180 per square metre during the June 2013 quarter, down by 12.5 per cent over 12 months.

Brisbane is the second least expensive market for residential land, with median lot prices per metre at $417 during the June 2013 quarter, a 0.5 per cent rise over a year.

Nationally residential land sales posted strong growth of 18.2 per cent in the June 2013 quarter to reach a level of 17,170. This is the highest quarterly volume achieved since the March quarter of 2010. Over the first half of 2013 land sales increased by 26.4 per cent to be 16.9 per cent higher than the volume recorded for the six months to June 2012.

The sales are impressive but from a low base.

“Sales are therefore now back to a level equivalent to the GFC trough but no higher,” the report says. “The level is still 19 per cent below the long term average. Obviously it will be important to see further strong momentum in land sales for some time to come. For that to occur there needs to be a keener policy focus on ensuring adequate shovel-ready land is available.”

Follow Business Insider Australia on Facebook and Twitter

NOW WATCH: Money & Markets videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.