Land prices across Australia continue to increase, with Adelaide now recording the most affordable capital city land.

According to the latest State of the Land Report by the Urban Development Institute of Australia (UDIA), the median land lot price in Adelaide is $307,000, making it a key market for first-home buyers and investors seeking affordability.

In comparison, land prices in Perth are $329,000, Melbourne $403,000, South-East Queensland $417,000, the ACT $651,750, and Sydney remains the most expensive at $666,667.

Despite some signs of improved land supply, the apartment and multi-unit sector continues to experience record-low construction levels, which is placing further strain on overall housing availability.

UDIA National President Col Dutton warns that housing supply shortages are likely to persist due to rising material costs, ongoing labour shortages, high inflation, and cost-of-living pressures, all of which are influencing borrowing capacity and lending conditions.

Over the past two decades, Australia has significantly under-delivered on new housing supply, exacerbating affordability challenges and increasing financial pressure on homebuyers.

As land prices continue to rise, prospective buyers may face higher borrowing requirements and stricter lending conditions, particularly in high-cost markets.

Mortgage lenders and financial institutions will need to adapt to these market conditions by offering flexible loan products, competitive financing options, and tailored lending solutions that align with affordability constraints and borrower needs.