Pete Wargent blogspot

Co-founder & CEO of AllenWargent property advisory & buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place) - clients include hedge funds, resi funds, & private investors.

4 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he is one of the better property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

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Sunday, 30 October 2016

Australia's land is now worth more than $5 trillion

Land values surpass $5 trillion

The total value of Australia's land increased by 5.3 per cent or some $258 billion over the last financial year.

Total land values now in Australia sit at their highest ever level at more than $5.1 trillion - that's about three times the size of GDP, which in historic terms is very high.

By the way, you can click on these charts to make them bigger.

As you can see in the graphic above, some 82 per cent of the total land value is accounted for by our homes - residential property - at nearly $4.2 trillion.

The total value of residential land has seen more than a tenfold increase since 1989.

Of course, as the population expands we should expect to see residential land values increase in aggregate as more land is rezoned for residential use, while inflation tends to push current prices up over time too.

However, even population growth and inflation combined cannot account for residential land values more than doubling over the 11 financial years since June 2005.

In fact, the size of the Australian population has expanded by only 18 per cent over the past decade. 

Perhaps not too surprisingly, most of the upwards pressure on land values in recent years has been evident in Sydney and Melbourne, with the two most populous states together now accounting for more than 66 per cent of the total value of residential land. 

Over the past five years alone residential land values have increased by 54 per cent in New South Wales to $1.7 trillion, and by 48 per cent in Victoria to $1.1 trillion. 

Despite the solid increases over time, Australians would be wise to note that even where the population is growing residential land values can still decline.

Indeed, both Western Australia and the Northern Territory saw their total residential land values fall in aggregate over the last financial year by 4 per cent and 2 per cent respectively, even if vacant greenfield lot prices are as high as they have ever been.


Of course, you'll be able to read more on this as these findings are replicated elsewhere, but by subscribing to my free blog you read them here first. Feel free to share :-)