The value of residential land has surged across Sydney in the past year but the strongest gains have been concentrated in the city’s west.
Figures released by the NSW Valuer-General on Thursday show the total value of land across the state climbed to $1.34 trillion last year.
Land values increased by well over 10 per cent in almost all Sydney council areas, though the fastest increase was in Blacktown, where the median value of a residential plot climbed 47 per cent.
“We’ve got attractive things, but affordability would still have to be the main factor,” said Terry Comino, principal of Ray White Blacktown, when asked to explain the increase in land values in the area.
“It’s the go-to place if you haven’t got enough money to go to the other places,” he said.
The figures released annually by the NSW valuer general do not include the value of homes or buildings on land, but can contribute to the calculation of land taxes and council rates.
NSW Valuer-General Simon Gilkes attributed the increase in land values to improvements in infrastructure and historically low interest rates.
“The market has also been supported by increased land supply through major new land releases and increases to permitted residential densities in many areas,” Mr Gilkes said.
Land values also surged in Parramatta (up 36 per cent) and nearby Holroyd (38 per cent). Values increased by more than 30 per cent in Fairfield, Auburn, Canada Bay, the Hills Shire and Randwick.
The most valuable land in the state, however, continues to be concentrated in the inner north and east. The median residential land value in Mosman – not including the value of the house – has reached almost $1.6 million. Woollahra ($1.57 million), Waverley ($1.41 million), and Hunters Hill ($1.36 million) have the next highest average median land values.
The western Sydney director of the Sydney Business Chamber, David Borger, said the central suburbs in the region were rapidly changing and becoming less affordable.
“Take North Parramatta – 10 years ago there were no supermarkets and no bottle-shops in North Parramatta, now there are lots,” Mr Borger said.
“I think that reflects the fact that there’s density in those places now, there are more people with wallets, looking to spend.”
In the City of Sydney local government area, Mr Gilkes said the value of some commercial land in entertainment areas had reduced due to late-night trading laws.
And demand had been strongest for residential land in areas near good public transport facilities, he said. For instance, in Willoughby, the strongest increase in land values occurred around Chatswood.
Mr Gilkes said that while land values can be used to determine rates paid by landholders, councils also consider other factors in setting rates.
“Increases or decreases in land values do not necessarily lead to similar increases or decreases in rates,” he said.
Ray White’s Mr Comino said he doubted that property prices had increased by 47 per cent in Blacktown in a year, but a rising market made it difficult for government agencies to catch up to trends.
He said there had been significant interest from first-home buyers around Blacktown, and also some buying of off-the-plan apartments.