Top 5 headlines from this week’s Australian real estate news

1. Land prices keep rising: Median land prices have surged 7.6% nationally, with Brisbane and Perth seeing the biggest increases, making regional areas a more attractive option.
2. Home construction falls short: Despite 45,000 new homes completed last quarter, construction is not keeping pace with demand, intensifying pressure on affordability.
3. New property selling rules: From January 1, all property sellers must obtain an ATO clearance certificate to avoid a 15% withholding tax, with the ATO also cracking down on undeclared rental income.
4. Auction market gains momentum: After the usual holiday slowdown, auction activity is picking up, with Adelaide and Melbourne leading in clearance rates.
5. WA leads economic rankings: Western Australia tops the nation’s economic rankings, driven by strong retail spending, low unemployment, and high housing finance activity.

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Land prices keep rising

National median land prices have surged 7.6% over the past year, hitting a record high of $366,510 in the September 2024 quarter.

HIA Economist, Maurice Tapang, attributes the increase to rising home-building activity and infrastructure costs.

The price of land in capital city markets drove the increase, up by 9.2% in the past 12 months to $408,160.

“Prices have increased the fastest in areas where either home building activity is beginning to pick up or where the cost of providing the infrastructure for new lots is high,” Tapang says.

“Brisbane and Perth recorded the strongest growth in their median land prices, up in the past 12 months by 21.2% and 38.6%, respectively.”

The analysis says that Sydney land prices are up by 7.2%.

With rising prices, buyers are turning to more affordable regional areas or opting for smaller lots.

“Australia’s regions continue to provide better land purchasing opportunities compared to the capital cities, with the median price growing in the year by a slower 2% cent to $281,910,” Tapang says.

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Home construction falls short

As demand for land grows, new data from the Australian Bureau of Statistics shows 45,000 homes were completed in Q3 2024.

Victoria led the way with over 15,000 completions, followed by New South Wales (11,220), Queensland (8,177), Western Australia (5,924), South Australia (3,104), ACT (943), Tasmania (704), and the Northern Territory (122).

Despite this, the number of new homes remains below the level needed to meet the federal target of 1.2 million homes in five years.

“We need to ramp up construction as quickly as possible,” says Matthew Kandelaars from the Property Council of Australia.

The data also shows that work started on an additional 43,000 properties that were not yet completed at the end of the quarter, which is 13.9% higher than the same time in 2023.

While most homes built were detached houses, Master Builders Australia CEO, Denita Wawn, says the majority of properties constructed during the quarter are detached houses. She says it’s important that the construction of apartment projects also lifts.

“If we are going to solve the housing crisis, we need to build more apartments and make them more attractive for people to invest in—only then will we see a lowering of rental inflation and more homes for Aussies,” she says.

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New property selling rules

New property selling rules are now in effect and ignoring them could be costly.

From January 1 2025, all property sellers in Australia must obtain an ATO clearance certificate—or risk having 15% of the sale price withheld.

Previously, this only applied to overseas-based sellers. Now, all Australian residents must provide buyers with a clearance certificate confirming their tax residency at or before settlement.

This rule does not apply to sellers who signed contracts before the start of the year but have not yet settled.

Previously, the withholding rule only applied to properties valued above $750,000. That threshold has now been removed.

Meanwhile, the ATO is cracking down on landlords failing to declare rental income or are under-estimating their earnings. It will compare bond data with tax returns to identify underreported earnings.

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Auction market gains momentum

The auction market is set to regain momentum after the Australia Day long weekend.

Traditionally, auction activity slows between Christmas and late January, before ramping up in early February.

Last weekend, CoreLogic and Domain tracked around 400–500 auction results. Both ranked Adelaide and Melbourne as the top two markets for clearance rates.

CoreLogic reported Adelaide’s clearance rate at 76.1%, while Domain placed it at 61%. Melbourne saw clearance rates of 61% and 63%, respectively.

Auction volumes are expected to rise, with CoreLogic tracking around 1,300 scheduled auctions for this weekend.

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WA leads economic rankings

Western Australia has once again topped Australia’s economic rankings, narrowly edging out Queensland and South Australia.

The January 2025 CommSec State of the States report highlights WA’s resilience, leading in retail spending, unemployment, population growth, housing finance, and dwelling starts.

However, its economic growth is showing signs of slowing, ranking second-last ahead of the Northern Territory.

Queensland and South Australia tied for second place, followed by Victoria, Tasmania, New South Wales, and the Northern Territory.

South Australia leads in economic growth, with an 8.4% increase in activity above its long-term average.

Victoria saw the highest level of construction work, about 16% above its decade average. Meanwhile, WA, where properties were selling rapidly in late 2024, recorded the highest housing finance commitments and dwelling starts.

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Catching up on Australian real estate news?

Read our last Australian real estate news article covering:

1. Investors confident in 2025: Investor interest is at its highest since 2022, with 65% of buyers planning property investments this year. Queensland tops the list of preferred locations, followed by Victoria.
2. Fixed rates start dropping: Macquarie Bank is leading the charge in cutting fixed rates, signalling potential competition among lenders as the Reserve Bank’s next meeting approaches.
3. House prices still rising: Australia’s housing market has seen two years of consecutive growth, with Brisbane’s median house price surpassing $1 million for the first time.
4. Rental vacancies inch up: Vacancy rates have slightly risen to 1.9%, but all major cities remain below the 3% balanced market threshold, keeping pressure on rental prices.
5. Property listings increasing nationally: Listings have jumped by 7.9% nationally, the strongest increase since 2021, driven by sellers leveraging recent price gains.

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