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The latest report from Housing Industry Association (HIA) and CoreLogic revealed that land prices have significantly increased over the three years from March 2020 to March 2023, compared to the previous period.

Over the three years to the first quarter of 2023, land prices went up 23%, higher than the 5% increase in the preceding period.

CoreLogic economist Kaytlin Ezzy said while the rate hikes over the past year have resulted in some capital cities recording mild declines in recent months, overall land prices remained resilient due to the limited supply.

“While sales numbers have eased significantly from the peak volumes seen during the HomeBuilder scheme, it will take some time before we see a more notable recovery in supply levels,” she said.

“Until then, we can expect land prices will remain elevated, dwelling approvals will continue to track below average, and house commencements will continue easing.”

HIA senior economist Tom Devitt said the surge in prices came despite the 37% fall in the volume of residential land transactions over the 12 months to March 2023.

“This land shortage continues to drive up prices despite the sharpest increase in interest rates in over 30 years and will weigh on home building activity in the coming years,” he said.

“As the market begins to normalise from the shocks in recent years, it is expected that both sales and prices will return to their historical trend — this depends on the government’s ability to adequately plan its land release pipeline, which in turn depends on the availability of data across all stages of land release.”

Currently, it takes ten years, on average, to move land through the seven stages of land release.

Mr Devitt said any decision on land release can be expected to affect housing supply ten years from now.

“The time it takes to progress from a vacant block of land to a block that is shovel-ready with titles could be a major roadblock to the government’s plan to build a million homes over the next five years,” he said.

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
$2,408
Principal & Interest
Variable
$0
$530
70%
Featured Online ExclusiveUp to $4k cashback
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  • $2000 for loans up to $700,000
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5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of .

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Photo by AndreyPopov on Canva.